Why measurement, analytics and optimized resource allocation are driving market strategy?

Many companies have yet to make the link between increased spend on data and analytics and the delivery of increased revenue and profit through the resulting improved strategy and tactics. They would all like to make the link without spending any money, but those of us that work in this field everyday, realize that will never happen. It takes time, money and management commitment to be able to factually connect marketing investments to increased revenue. My experience, based on the thousands of marketers that I've trained around the world, is that still about 50% of all companies (both big and small brands, both B2B and Consumer marketers) still spend significantly less than 1% of their marketing budget on marketing data and analytics. - Which really means they aren't spending anything. No wonder they're like ships lost at sea with a broken mast.

With the increasing competitive pressures they all face, marketers around the world are learning that marketing analytics can be a strategic weapon. They're finding that a key component of success in analytics and then the derivative success in marketing requires that little four letter word, 'data'. With the right data and analytics in place marketers can be more confident in the success of their tactics and can begin to make bolder and bolder moves to stay ahead of the competition and improve their marketing strategies.

This is not only true of traditional media but is also now becoming true of social media. With the overwhelming success of Facebook, marketers are now looking to determine the success of their exploding Facebook investments and our analytic results show that these have been very beneficial to the bottom line. With the right data and analytics in place - across the entire marketing mix - marketers are able to improve their allocations and with social media in the mix can start to shift investment out of other non-performing traditional media into these hot new social media channels (check out our new website at www.ROIofSocialMedia.com).

With the right understanding of the drivers of success marketers can build better strategies and execute better tactics to stay ahead of the competition. As a consultant in this area, we've seen increases in revenue due to analytics of up to 10%, increases in profit of up to 25% and increases in share of 2 to 4 percent. I would love to hear about your experiences in this area. Just let me know what you have also been able to achieve.

Guy Powell is the author of "Return on Marketing Investment" and founder of DemandROMI, a Marketing ROI consulting firm. Hear more from Guy at this year's Measure Up event, June 6-8, 2011 in Boston, MA