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Despite the fact that data about the performance and effectiveness of marketing activities is more easily available than ever, a survey by the American Marketing Association, Deloitte, and Duke University’s Fuqua School of Business, found that over 60% of US Fortune 1000 Chief Marketing Officers were unable to quantify the short- and long-term impacts of their companies’ marketing activities. With marketing typically accounting for around 10-15% of a company’s overall budget, this means that a lot of companies are not asking enough questions about how such a large investment is actually paying off.

Here we look at what marketing performance management encompasses and why your company can’t afford not to implement robust performance management.

Although there is no one agreed definition of marketing performance management, we can think about it as the practice of measuring the performance and effectiveness of marketing strategies and tactics, learning from the insights gained, and using this knowledge to continually improve those strategies and tactics over time. All with the ultimate goal of improving ROI.

So in fact, marketing performance is about:

  • one the one hand, measurement of performance, i.e. identifying and monitoring performance indicators and communicating the overall performance results; and
  • on the other hand, management of the process through which those results feed back into marketing planning and execution, with the goal of improving performance.

Key advantages of marketing performance management

A strong marketing performance management model brings many advantages to companies of all sizes, whatever the sector.

Here are a few of the ways in which your company can benefit:

  • Justifying spending: Few companies have the luxury of not having to question costs, and marketing typically accounts for a considerable portion of most companies’ overall budget. Therefore, it’s important to know how that budget is being allocated and whether or not it is being used effectively.While marketing is in many senses an art, data analytics can offer the undeniable proof of how your marketing activities are performing. If the data shows a good ROI for a particular activity or campaign, then continued spending can be justified. A poor ROI on the other hand can be the red flag you need to reassess and change tactics.
  • Deciding how to allocate budget: A good overview of marketing ROI at programme or campaign level can help you identify those with the highest return. This way, decisions on whether or not to allocate budget can be data-driven, rather than based on instinct.For example, if you know that 80% of your revenue comes from customers who find you through organic search, and that, despite high levels of traffic from social media those customers only bring you 10% of revenue, you can make an informed decision about where to allocate budget.
  • Timely delivery: With strong performance management it’s easier to see the evolution of your marketing efforts towards time-limited goals. For example, if your quarterly objective is to increase LinkedIn followers by 10%, weekly or monthly tracking of your progress will help you assess whether or not your efforts are sufficient, or whether you need to devote more resources.
  • Fostering accountability: Without identified and agreed goals and performance measurement, it can be easy to lose momentum and underestimate the overall impact of sub-optimal performance of different elements of your marketing strategy and tactics.Performance management increases transparency, and with this, comes accountability, as your whole team will be much more aware of how each and every component interacts to deliver success.
  • Happier customers: By measuring the right KPIs, you will understand not only how your marketing efforts are bringing bottom line results, but also how efficient your spending is. We know that it can cost five times more to acquire a new client than to retain an existing one, so if your data analysis shows high customer acquisition costs, you will know that you need to devote additional efforts to delighting your customers and increasing their loyalty and value.


While it can be tempting to place a lot of emphasis on gathering and interpreting data, performance measurement is simply one element of a robust marketing performance management approach.

Once you have established what and how you will measure, executed the marketing activities and gathered and analysed the results, it’s how this knowledge is turned into intelligence and data-driven decisions that will set you apart from your competitors.

For more about marketing performance management, take a look at our marketing performance management guide.

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