New Study by Chief Marketing Officer Council Finds Few Companies Have Formal Systems for Measuring Marketing Performance and ROI CMO Council to Release Highlights from Global Measures+Metrics Audit At Top Tech Executive Conference June 9 in New York

Just as corporate marketing budgets start to loosen after a long belt-tightening, a new study finds that technology marketers are coming up short on measuring marketing performance and its return on investment.

According to a new study commissioned by the Chief Marketing Officer (CMO) Council, more than 80 percent of the respondents do not have formal marketing performance measurement (MPM) systems in place, despite spending as much as 25 percent of their revenue on marketing. In addition, almost 80 percent of the senior marketing executives polled were dissatisfied with their ability to demonstrate their marketing programs’ business impact and value.

These are among the key findings of the CMO Council’s "Measures+Metrics Audit – Assessing Marketing Value and Impact," an online survey of more than 315 senior marketing executives at global technology companies. The CMO Council is an influential marketing organization of top marketing decision makers representing nearly 1,000 technology companies with combined annual revenues of $450 billion. These individuals control more than $40 billion in annual marketing expenditures. Companies represented include Adobe, AT&T, Apple, Cisco, Computer Associates, Dell, Documentum, eBay, EMC, Epson, Freemarkets, Fujitsu, Gateway, HP, IBM, Intel, Iomega, Juniper Networks, Logitech, Lucent, Microsoft, Monster, National Semiconductor, Novell, Oracle, Quantum, SAP, SAS, Sharp, Salesforce.com, Siebel, Seagate, Sony Electronics, Symantec, Transmeta, Veritas, Sun, Wyse, Xerox and Yahoo!

The study was conducted in the first quarter of 2004 with the vast majority of respondents (90 percent) being executive officers with a VP title or above. They were predominantly drawn from North American companies. Those surveyed included top technology marketing decision-makers who work across a wide range of technology industry sectors, including computer systems, software, networking, peripherals, components, integration services, communications and the Internet. The study found that nearly 90 percent of respondents believe measuring marketing performance is a key priority for today’s technology companies—the larger the company, the higher the priority. Growing boardroom pressures on marketing departments to justify and account for their spending, as well as more critical and demanding corporate performance environments, heightens this priority. Also contributing to the lack of marketing performance measurements is a limited awareness of MPM models, best practices and solutions, and a lack of infrastructure in global marketing groups for creating a credible MPM system.
Other key findings from the CMO Council’s "Measures+Metrics Audit – Assessing Marketing Value+Impact" study include:

• Companies that have formal performance measurement systems consistently achieved a higher level of CEO confidence in the marketing function.
  
• Companies using MPM systems tended to outperform the market in terms of sales growth, market share and profitability.
  
• Some 70 percent of respondents report they spend less than two percent of their marketing budget on MPM, but almost 60 percent intend to increase spending in this area within the next two years.
  
• Measurements most frequently reported to management include qualified leads generated, revenue impact, feedback from sales and channel groups, as well as web site traffic and content viewing.
  
• The measures rated least frequently as performance indicators were stock price, Wall Street perceptions, share-of-mind and brand equity.
  
• Hardest-to-measure activities were results from advertising, sales and marketing collateral, and branding.
  
• Easiest-to-measure activities were results from direct mail and e-mail campaigns, web site and Internet search engine presence and telemarketing and contact management programs.
  
• Topping the list of weaknesses in MPM analytics were performance tracking for individual countries, automated report generation across all functions, information "drill-downs" on individual programs, competitive benchmarking, and executive dashboards of key performance indicators.
  
• More than 72 percent of respondents reported spending more than four percent of revenue on marketing and nearly 20 percent allocated over 11 percent of revenue to marketing programs.

"This study confirms that MPM is indeed an imperative for technology marketers," said Jan Soderstrom, CMO Council’s Chairman of the Board and most recently senior VP of global marketing and brand management for 3Com Corporation, and earlier, executive VP of marketing for Visa International (1996-1999). "MPM needs to be a top-level priority in organizations in order to truly enhance global marketing campaigns."To help technology marketers better understand and develop a system to measure marketing performance, the CMO Council is presenting the Marketing Performance Measurement (MPM) Forum in New York City on June 9th, 2004. The MPM Forum will feature a review of benchmarking best practices by top technology brands (moderated by IDC) and highlights from the comprehensive CMO Council study of global technology marketers. In addition, BusinessWeek will its present findings from a new survey on how C-level executives in finance, operations, sales, technology and product development view the value of marketing.

Donovan Neale-May, executive director of the CMO Council, anticipates spirited interaction between CMO Council members on these issues. "We’re taking a hard look at our study’s findings, and we look forward to hearing more from our attendees on best practices to move marketing performance measurement forward in the eyes of CEOs and CFOs."

In addition, attendees will create peer-based CMO scorecarding systems during roundtable luncheon discussions with fellow members of the CMO Council. Serving as table facilitators will be MPM Committee members, who are senior marketing executives from Alcatel, Documentum, Orcas Network Ltd., EDS, Juniper Networks, Monster.com, National Semiconductor, Oracle, Pitney Bowes, Qualcomm, SAP, Siebel, Tektronix, Unica, Wipro Technologies, and Xerox.

MPM Forum key underwriters include Biz360 (Active Market Intelligence,) Cognos (Corporate Performance Management,) Google and Unica (Enterprise Marketing Management Software.) Headline sponsors include GlobalFluency, the administrative arm of the CMO Council, and Neale-May & Partners. Publishing sponsors include BusinessWeek, Chief Executive Magazine, eChannelLine, IDG and Sales & Marketing Management. Technology underwriters include Accela Communications, Bitpipe, Inc., D S SimonProductions, ExactTarget, Marketwire, Raindance and ViewCentral.

About the CMO Council
The CMO Council is a private, non-profit organization dedicated to high-level knowledge exchange, thought leadership and personal relationship building among senior marketing and brand decision-makers in the global technology industry. Based in Silicon Valley, The Council works to further the stature, credibility, influence, and understanding of the strategic marketing function among business executives, opinion leaders and critical stakeholders in the technology sector.

Nearly 1,000 technology companies are currently represented on the CMO Council, accounting for well over $500 billion in aggregated annual revenues. These include top decision-makers controlling more than $40 billion in global marketing expenditures for many of the world’s foremost computer systems, software, networking, communications, consumer electronics, component, distribution, and consulting brands. For more information, please visit our web site at http://www.cmocouncil.org

The CMO Council is represented through regional membership chapters, which convene in technology centers worldwide under the auspices and administration of GlobalFluency, the Independent Network of Influence. Spearheaded by Silicon Valley-based Neale-May & Partners‚ GlobalFluency consists of 38 offices employing over 250 professionals in 44 countries. Together‚ these organizations represent more than $45 million in billings from scores of clients across the information technology‚ communications‚ systems integration and Internet service sectors. More information is available at http://www.globalfluency.com.