Part 1: Benchmarking Marketing Contribution: How Maturity Impacts Marketing’s Value to the Business
Marketing Attribution vs Contribution
Proving the value of marketing efforts is often a challenge in B2B marketing. Traditional metrics like attribution have long been the go-to standard for tracking marketing performance. However, as marketing organizations evolve and mature, a more powerful and insightful metric is gaining prominence: marketing contribution.
In this blog, we’ll explore what marketing contribution is, how it differs from attribution, and why it should be expected to increase as your marketing organization matures across systems, people, and processes.
What is Marketing Contribution?
Marketing contribution is a straightforward metric that measures the direct impact of marketing activities on a company’s revenue pipeline. Unlike traditional attribution models that credit marketing efforts based on a series of touchpoints, marketing contribution focuses on the percentage of revenue generated or influenced by marketing. It’s a more comprehensive, holistic measure that looks at the bottom-line impact, answering the question: “How much revenue would we have lost if marketing hadn’t been involved?”
For example, if a company’s marketing efforts contributed to 40% of the leads that ultimately closed into deals, that 40% represents the marketing contribution to the revenue pipeline. This metric isn’t just about tracking activity; it’s about demonstrating marketing’s direct influence on business outcomes, which is exactly what business leaders care about.
Attribution: A Deep Dive into Its Limitations
Attribution is a method for assigning credit to various touchpoints in the customer journey. It attempts to understand which marketing channels or interactions led to a conversion and determine which activities drive the most value. While attribution is useful for measuring the effectiveness of individual tactics like paid ads, email campaigns, or social media posts, it has significant limitations when used to communicate marketing’s overall impact.
Attribution models, particularly multi-touch attribution, can get complicated and convoluted. They involve assigning fractional credit to each touchpoint but often fail to consider the broader context. Moreover, attribution models tend to be internally focused, primarily used within marketing teams to adjust tactics, rather than something that communicates marketing’s value to other departments like sales or the C-suite.
The problem with attribution is that it doesn’t answer the ultimate question business leaders want to know: “How is marketing impacting revenue?” This makes it difficult for marketing teams to prove their worth in a way that resonates outside their department.
Why Marketing Contribution is the Better Metric
Marketing contribution, as an external marketing metric, on the other hand, is an easy-to-understand metric, particularly for senior leadership and stakeholders. It gives a clear, quantifiable view of how much marketing directly influences revenue generation, making it more actionable for decision-makers. Marketing contribution aligns more closely with the company’s broader goals by focusing on revenue outcomes rather than specific touchpoints.
It also answers the question that every CMO, CEO, and CFO wants answered: Is our marketing investment delivering a measurable return?
Setting Expectations: Growth Over Time
Just as attribution models evolve, marketing contribution should be viewed as a journey that improves as your marketing organization matures. Early-stage marketing organizations will likely see lower marketing contribution as they build the necessary systems, processes, and people to align marketing with revenue generation.
However, as your marketing organization matures, you should expect marketing contribution to rise steadily. Best-in-class organizations should aim for around two-thirds of their sales pipeline to be influenced or generated by marketing efforts. This number may be much lower in the early stages, as marketing teams focus on building the necessary infrastructure and aligning it with sales.
The key is to set realistic expectations and to use marketing contribution as a long-term growth metric. By benchmarking your progress over time, you can measure how much marketing drives the revenue pipeline and how your organization’s maturity directly correlates to increased marketing impact.
Conclusion
Marketing contribution is quickly becoming the gold standard for measuring marketing success in the B2B space. Unlike attribution, which can often be difficult to explain and lack relevance to senior leadership, marketing contribution provides a simple and actionable metric that ties marketing efforts directly to revenue.
As your marketing organization matures through improvements in systems, people, and processes, you should expect marketing’s contribution to grow, increasing the business’s value. The more you invest in refining these areas, the more marketing will prove its worth regarding direct revenue impact. So, measure your progress, benchmark your success, and watch your marketing contribution climb as your organization evolves.