Digital Marketing

Turning Clicks into Cash Flow

April 18, 2017
Digital Surgeons

Turning Digital Investment into Top and Bottom Line Dollars

Despite overwhelming evidence that digitally enabled customers are moving to social, digital, and mobile channels for most of the purchase journey, most of the legacy organizations we work with are not adapting their marketing investment strategies fast enough to remain competitive or effective.

A primary reason for this is most business leaders do not fully understand how mobile, social, and digital investments contribute to cash flow.  As a consequence, they fail to leverage digital channels to accelerate growth and optimize the performance of their marketing investments.

Another fundamental problem is few organizations are looking at the big picture or the bottom line when it comes to digital.  Most of the agencies, media partners, and solutions providers in the marketing services supply chain lack the mandate, incentives, or contractual arrangement to drive dollars with digital. Many are left to “grade their own homework” and measure their own performance. As a consequence, marketers will waste money because they confuse digital media performance with digital growth strategy. In the worst case scenario, CMOs expose themselves to fraud and self-dealing, as evidenced by the $16 Billion in advertising fraud exposure marketers will face this year due lack of transparency and self-reported performance.

There are several underlying factors contributing to the problem.

  1. Most CEOs and boards built their careers on traditional marketing and sales approaches. So, it’s difficult for them to abandon those “proven” channels for new digital approaches they do not fully understand or trust. In particular, leadership is too slow to shift resources discount the growing imperative to shift resources to owned and earned digital channels and the growing importance of well-organized content in reaching and acquiring customers.
  2. Marketers lack credible ROI metrics to translate digital investment to financial outcomes for the CFO. A major reason legacy organizations are too slow to shift resources to digital marketing investments is the CEO and CFO are uncomfortable with how digital investment will directly contribute to dollars in terms of bottom line profits, top line growth, and enterprise value. As a result, a study by Columbia university found the majority of CMOs still make big trade off and allocation decisions on gut feel and historical investment instead of facts and financial ROI analysis.
  3. Marketing is reluctant to support sales organizations or sales measures of success. It’s well documented that customers rely heavily on digital marketing channels and touch points at every stage of the purchase journey. As a result, CMOs are being forced to take on a broader role to more directly impact sales and the customer experience. Almost half (49%) of senior marketing leaders are individually accountable for supporting sales channels and driving more measurable sales outcomes deeper into the sales funnel.  And according to Gartner most CMOs have e-commerce under their purview.  Still many marketers are reluctant to support sales enablement as part of their mission or move beyond vanity metrics as their measurement scorecard.  Many CMOs still use brand awareness as their sole measure of evaluating marketing performance.  Over a third don’t include any mention of financial outcomes when asked to define marketing ROI.
  4. Media specific and channel specific budgeting, planning and measurement. The average marketer now manages over 20 material investment budgets. Options range from traditional media to social influencer channels.   Most organizations sub-optimize their investments in digital media and channels because they plan, budget and measure these investments in silo’s or isolated “swim lanes”. The specialization of agencies by media type by procurement only serves to amplify the problem. Such high degrees of agency and channel specialization creates incentives to optimize media performance over marketing and sales effectiveness.

Digital Surgeons is a digital demand generation company focused on using digital investment to drive dollars to the top and bottom line. We understand there’s a big difference between spending more money on digital media and strategically reallocating resources to digital growth investments that drive profits, margin and growth.  To help marketers accelerate their growth and maximize their digital marketing investment, we do two things:

Turn clicks into cash flow.

Before we begin an engagement or execute a digital strategy, we work with all of our clients to develop a Clicks to Cash Flow Model for their unique business.  This model ensures the entire leadership team – including sales, finance, product, and IT- fully understands and buys into the investments in digital insights, assets and engagement that will be required to drive the sales outcomes and ROI.  Our scorecard starts with the key drivers of enterprise value – brand equity, cost of acquisition, margins, net new sales and customer lifetime value. By anchoring our digital strategies metrics that accelerate growth and shareholder value, we ensure your investment in time, dollars and tactical execution drives financial outcomes, not vanity metrics.

We’re happy to share our model with you, and discuss how your organizations can accelerate your growth with a marketing strategy design to turn your investment in clicks into cash flow.

Help CMOs quantify the value of digital to their CEO, board and peers.

Digital Surgeons has partnered with the Forbes CMO Practice to build a CMO council to establish benchmarks, methods and standards to change this dynamic to better connect marketing investment to business outcomes. Our team is leading the Performance Marketing Research Initiative to develop common sense solutions to the top measurement challenges facing CMOs, including:

  • The growing pressure to show returns on rising investments in marketing assets, new media, data, analytics and technology needed to compete for digitally enabled customers;
  • The need to make big trade-off, reallocation, and risk-reward decisions to generate results in a rapidly changing marketplace;
  • The mandate to manage and measure a broader investment portfolio, deeper in the sales funnel, with more touch points and higher degrees of business unit integration;
  • Closing the communications and credibility gap with boards, CFOs, and CEOs about the need to transform marketing to adapt to a rapidly changing customer, technology and competitive landscape.

We invite you to join our network of leading CMOs and collaborate with your peers to establish a common-sense framework for measuring, communicating, and maximizing the contribution of marketing investment to shareholder value and growth.  Our goal is to help the CMO community define objective performance marketing benchmarks, best practices and scorecards that quantify the value of marketing investment and create a simple standard for measuring marketing ROI across the company.

If you want to participate, please contact us and we can include your views in our research. Any marketer who participates will get a free copy of 100-page best practices research and benchmarking report entitled: Performance Marketing: A CMO Blueprint Quantifying the Value of Marketing Investment to Enterprise Value and Growth Strategy” – with actionable recommendations and benchmarks and research from over 400 CMOs and Board Members from Global 5000 organizations.

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