41% of B2B Marketers Report Feeling More Pressure to Prove ROI: Why Not 100%?
In the ever-evolving world of B2B marketing, proving Return on Investment (ROI) has always been a challenge. A recent survey reveals that 41% of B2B marketers report feeling pressure to prove ROI. That has me wondering about the remaining 59%: are they operating without the necessary accountability?
Marketing isn’t a charitable act – the goal is to sell more products or services. Some channels or tactics are easier to measure than others: spending money on Google Ads will drive leads today while investing in PR brings brand awareness for the future. Regardless of the time horizon, you need to have an economic model built on proven evidence that your actions will eventually lead to ROI.
Failing to prove ROI means doing the wrong thing. You run the risk of doubling down on something that’s not working, or accidentally abandoning something that is. There’s an opportunity cost to investing in one campaign over another, and if the results don’t come, you have less money available for next year’s budget. Teams that have no pressure to prove ROI lose the discipline to drive results, and performance quickly deteriorates.
Strategies for Managing Pressure and Maximizing ROI
As the co-founder of Ladder, a 50-person growth marketing agency, I worked with at least 80 B2B clients in 6 years, and I can tell you that every single one demanded we prove ROI. Every year or quarter, our ROI goals would get increasingly ambitious, and we put significant effort into marketing attribution to prove our contribution.
Navigating the pressures of ROI demands strategic foresight. One approach is to estimate the diminishing returns for each marketing channel, for example, as part of a marketing mix model. There’s a tradeoff between ROI and volume: as you increase volume, your audience gets saturated, and efficiency declines. Once you’ve built a model and chosen where on that curve you want to be, you can mutually agree on a realistic target with management.
The other important thing to remember is that you’re not destined to forever live at your current efficiency level. Through better optimization and creative testing you can shift the curve upwards, so you get higher volume at the same efficiency. If you’re not testing new creative, you can’t keep up as your goals increase year over year, and you may even decline due to ad fatigue or competitive pressure.
The Role of Automation and Data in Marketing Strategy
In the era of data-driven decision-making, automation plays a vital role. During my tenure at the agency, we invested heavily in automation, with four developers and two data scientists dedicated to building internal tools for reporting, monitoring, and optimization. While we were data-driven, our primary focus was on creative testing rather than buying data for targeting. I'm a firm believer that good creative does the targeting for you.
With B2B specifically, it’s important to be able to model not just your marketing attribution, but what happens further down the sales funnel. Most useful is building a lead scoring model, so you can predict the quality of a lead at the point of capture, rather than waiting weeks or months to optimize your campaign. You can get a good start with a simple pipeline analysis, to see what attributes of a lead correlate with downstream lead quality.
The largest productivity gain your team can get right now is adopting generative AI tools like ChatGPT and Midjourney to help with marketing creative production. AI ads are passing the ‘turing test’ of being indistinguishable from human-made creative, and the quality is increasing exponentially. The good news is that you don’t need millions of dollars to train your own model – you can learn prompt engineering to work better with existing models, and Google and Meta are incorporating AI into their platforms.
Evaluating the Incrementality of ROI
High-intent channels like Google Search or Retargeting often appear attractive due to their promise of better targeting and higher conversion rates. However, my experience has shown that the higher the reported ROI, the lower the incrementality of the campaign. Incrementality is measuring what share of the reported leads would still happen without marketing.
- Branded search ads on Google register high ROI, but if you switched off the campaign, many of those people would click on the organic search result instead.
- Retargeting website visitors with display advertising will have some value, but if they were browsing your website, they were already aware of you and likely to reach out.
- Email or CRM campaigns help nudge people towards becoming warmer leads, but some percentage of those leads would have decided to purchase anyway.
High ROI channels tend to capture demand and take credit for sales in your analytics or CRM but aren’t necessarily generating that demand. If you switched off these channels, it’s likely a high percentage of those leads would continue to come through. Getting incrementality wrong means overinvesting in capturing demand in lower funnel channels, and not investing enough to fill up demand at the top of your funnel.
We shouldn’t be complaining about the pressure to prove ROI; we should be welcoming it. We need to continually optimize our campaigns and keep getting smarter about how we drive ROI. The key is understanding ROI nuances, such as diminishing returns and incrementality, as well as being able to affect change through optimization and automation. By embracing the pressure to prove ROI, marketers can facilitate smarter decision-making and promote sustained growth in their organizations.
To lean into incrementally and see how it could help your brand, schedule a demo today.