SPSS - News Room

News Release

August 2009

ROI is bottom of the pile for marketers

~ SPSS research reveals critical failure to measure the return on investment of marketing campaigns ~

Marketers are paying scant regard to return on investment (ROI) in a frenzied bid for new customer acquisition, with larger companies being the most wasteful.

Half the marketing professionals surveyed by research firm Vanson Bourne, on behalf of SPSS, said their key business objective when developing a new campaign is customer acquisition and retention. Only five per cent cited value for money, suggesting marketers are overlooking important information when making critical campaign decisions in a harsh economic climate.

SPSS, the leading provider of Predictive Analytics software and solutions, conducted the study to uncover the priorities driving marketing decisions. Colin Shearer, senior vice-president of strategic analytics at SPSS, said: “Marketers seem to have lost sight of the budgetary and financial implications of marketing campaigns. We are no longer in the boom times - all expenditure needs to be justified within the business to ensure value for money.”

Marketers are being urged to take a more strategic approach when devising marketing campaigns. Saga, the holidays and financial services provider, implemented Predictive Analytics software that enabled the company to achieve significant cost savings and a revenue increase of £1 million after the first year. Specifically, Saga Holidays’ marketing department was able to significantly reduce mail costs by predicting the best customers for specific campaigns. In addition, the company has also generated additional revenue by marketing to new and prospective customers that were not targeted before.

SPSS’ study of 100 marketing professionals also revealed that smaller companies are much more switched on to the need to measure ROI. Sixteen per cent of marketers from a department of fewer than five people voted it their priority, compared with just seven per cent of those from a department of 50 or more.

Further to this, the research found that some marketers are making decisions based on instinct alone. Seven per cent of respondents said they rely solely on gut feel to judge whether marketing activities meet their actual goals, rather than reviewing historical successes or assessing actual results.

“It is no longer enough to rely on instinct alone. To prove their worth and value to an organisation, marketers, like those at Saga, must be able to demonstrate the success of campaigns and prove the return on investment,” Shearer added.