{"id":14400,"date":"2024-12-13T20:02:29","date_gmt":"2024-12-13T20:02:29","guid":{"rendered":"https:\/\/dmsretail.com\/RetailNews\/ai-powered-marketing-measurement-the-answer-to-retails-efficiency-mandate\/"},"modified":"2024-12-13T20:02:29","modified_gmt":"2024-12-13T20:02:29","slug":"ai-powered-marketing-measurement-the-answer-to-retails-efficiency-mandate","status":"publish","type":"post","link":"https:\/\/dmsretail.com\/RetailNews\/ai-powered-marketing-measurement-the-answer-to-retails-efficiency-mandate\/","title":{"rendered":"AI-Powered Marketing Measurement: The Answer to Retail\u2019s Efficiency Mandate"},"content":{"rendered":"

\"Retail<\/a><\/p>\r\n

Customer and investor-driven demands for growth, efficiency, convenience, digital transformation, and hyper-personalization are juxtaposed by what many retail managers feel is an ongoing need for more resources. Whether the ongoing labor crisis or supply chain limitations, doing more with less<\/em> has become the de facto<\/em> motto for an industry that continues to be challenged by tight consumer pocketbooks and labor challenges, including job cuts as retailers seek to manage costs.\u00a0<\/p>

Efficiency<\/em> in the face of these challenges has, more than any other factor, driven retail\u2019s digital transformation initiatives, the clarion call to leveraging retailers\u2019 existing resources to generate first-party data for next-generation insights.\u00a0<\/strong><\/p>

Continually driven by the need to overcome unique marketing challenges, marketing teams today are leveraging AI-powered tools and strategies such as Unified Marketing Measurement<\/strong>\u2014a marketing analytics approach that creates a holistic view of marketing performance by combining a multitude of measurement modalities\u2014to provide advanced ways to manage and monitor campaigns no matter how vast.\u00a0<\/p>

The Struggle to Communicate Impact in Modern Marketing<\/strong><\/p>

These innovations form a critical step up for marketing teams when average shares for marketing budgets and spending have declined. Marketers have had to grow intimate with the do more with less <\/em>mantra over the last several years.<\/p>

According to a 2024 survey of Chief Marketing Officers, 7.7%<\/strong> of their company\u2019s revenues are currently devoted toward marketing budgets; while this figure is not a historic low, it is the lowest average share for the survey since 2018. While digital marketing spending increased 11.1%<\/strong>, that\u2019s 9.1%<\/strong> less than record high investment levels of 20.2%<\/strong> in early 2022. Meanwhile, traditional advertising only rose 0.8%<\/strong> in the last year, the first growth since 2022 after years of cuts, particularly a -2.6%<\/strong> cut in early 2023.<\/p>

These cuts are in part a response to tightening margins across departments, yes, but also CMOs struggling to communicate the effectiveness<\/em> of their campaigns. In fact, a Gartner survey from September 2024 found that nearly half of 378 surveyed CMOs felt marketing was viewed as an expense<\/em>, not a strategic investment<\/em>. Survey respondents felt that CFOs, CEOs, and even Sales Heads were among the most skeptical of marketing\u2019s contributions.<\/p>

Acknowledging the belt-tightening across the retail space, Marta Frattini, Retail Industry Strategy and Marketing Lead with Adobe, argues that marketers have it particularly rough: \u201cMarketing departments face reduced budgets but also wall gardens, a lack of precision, and a lack of signal. They\u2019re navigating uncharted territories in which the cost of doing business is skyrocketing.\u201d<\/p>

She continues to explain that even some \u2018proven\u2019 marketing approaches are seeing a gradual, declining shift because results are so difficult to track, noting that the inability to communicate the full impacts of marketing spend is a core barrier<\/strong> to optimizing marketing budgets and, ultimately, drive ROI.<\/p>

In other words, when CFOs ask CMOs what their work is doing for the business, it has arguably always been a struggle to define specific outcomes. However, in an era of tightening budgets, the importance of effectively answering this question has grown to become an existential need<\/em> for CMOs and their departments.<\/p>

Tackling Today\u2019s Marketing Campaigns with Innovative Solutions<\/strong><\/p>

Modern marketing campaigns must account for the myriad ways in which potential customers encounter their brands and messaging across channels while continually justifying their existence to senior staff. That\u2019s precisely why approaches that help better track those interconnected efforts are gaining significant traction, leveraging AI to boost comparative cross-channel analyses and revolutionize forecasting.<\/strong><\/p>

Reflects Frattini, \u201cBrands and retailers need to have that holistic view of marketing impact. They need to have the data in one place.\u201d<\/p>

Specifically, new approaches in Unified Marketing Measurement that combine Marketing Mix Modeling <\/strong>(or MMM, a statistical method to evaluate marketing impact on ROI) with Multitouch Attribution<\/strong> (a better way for marketers to assign credit to varying touchpoints along a customer\u2019s journey) allow retailers to better analyze marketing impacts across channels both paid and non-paid. The ultimate aim is to provide a clearer view of how each touchpoint gets teams to their campaign goals, helping CMOs meet their ROI targets and <\/em>communicate their work more effectively.<\/p>

Moreover, new AI-powered<\/strong> scenario planning<\/strong> allows marketers to budget their campaigns to achieve the best strategic investments for the resources they have at hand, leveraging real-time data to produce unprecedented insights, generate comparative analyses, and generally help CMOs understand where each dollar will do what<\/em>.<\/p>

This allows for customized marketing plans with more clearly defined timelines and spending limits, as well as powerful comparative tools to compare campaign strategies easily and accurately. AI-powered campaign management also offers flexibility, allowing for real-time adjustments<\/strong> to key performance drivers, helping meet rapidly changing market conditions, shifting department goals, or simply boost performance on existing strategies.\u00a0<\/p>

It\u2019s another example of why AI has become such a sought-after tool within the industry, meeting the growing mandate to more efficiently use existing resources<\/strong> in an industry environment defined by tightening margins and pocketbooks.\u00a0\u00a0<\/p>

Of course, managing and effectively deploying advanced strategies can be a major lift all its own, especially for budget-strapped marketing teams. That\u2019s why providers such as Adobe have been working to provide solutions that thread all of marketing\u2019s disparate elements together to form a coherent story.<\/p>

\u201cAdobe Mix Modeler is a solution that unifies those bidirectional learnings from Marketing Mix Modeling and Multi-Touch Attribution to generate consistent results. By mixing the approaches, you get an approach that is holistic, with quicker, better visibility into marketing efforts and results,\u201d notes Frattini. Adobe Mix Modeler, a self-service AI-as-a-Service solution, allows retailers to measure marketing campaigns against their business goals while offering holistic optimization across paid, earned, and owned channels.<\/p>

In short, by leveraging the latest solutions to track customers\u2019 nonlinear, fluid, and complex journeys over entire marketing campaigns and calendar years, CMOs provide themselves the tools they need to not only make smarter decisions, refine existing campaigns, and innovate moving forward, but engender confidence in senior staff expecting clear results. Real-time insights help to make up-to-the-minute consumer behavior analyses that further strengthen the case, while AI-powered forecasting optimizes each ROI dollar.<\/p>

In the war against tightening budgets, where departments find themselves competing for each penny, it\u2019s an essential tool to not only do better but receive the credit CMOs and their teams deserve.<\/strong>\u00a0<\/p>

Listen in to RETHINK Retail\u2019s interview with Marta Frattini<\/strong> to dive deeper into the latest marketing strategies and solutions. We delve into the specific challenges today\u2019s CMOs face, some of the key communication barriers, and the new opportunities offered by Adobe\u2019s AI-powered Mix Modeler solution to help marketing teams quickly and confidently determine where to invest marketing resources to drive business growth and incremental value.<\/em><\/p>

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