2006 ANA Marketing Accountability Task Force Findings
Introduction
Purpose and Approach
Key Findings
Definitions and Components of Process
Understanding the Target Customer
Having an Explicit Plan to Build Brand Equity
Setting and Prioritizing Objectives
Developing an Integrated Marketing Strategy
Beyond the Dashboard
An Analytical Framework of Who, What, and How: The Key to Accountability
The full version of this white paper (including appendices) is available as a PDF.
Introduction
Everyone wants marketing to be ‘accountable.' Responding to that desire in 2005, the ANA commissioned a task force of 20 leading companies from diverse industries. These twenty companies were asked to share the best current practices that had helped them become more accountable and to identify their challenges in becoming truly accountable marketing organizations. The 2005 ANA Marketing Accountability Task Force report, written for the ANA by our consultants on the project, the EMM Group, asked some basic questions about accountability. The Task Force members concluded that marketers need to think about being accountable for more than a short term revenue objective or even for a higher marketing return on investment. Rather, marketers should be accountable for building long term brand equity, the single most valuable asset of most companies. Additionally, we discussed the need for marketers to learn more about the target consumer whose needs are the wellspring of all profitability.
The 2005 report provided many practical tools to facilitate accountability. Specifically, it created the marketing ‘maturity model' to help marketers understand where they stood versus their peers in four critical areas: data, analytics and metrics, corporate culture and process. (See page 24 of this report) Respondents to the report helped develop a process map to guide marketers step by step towards accountability within even the most siloed of companies. The 2005 ANA Marketing Accountability Task Force members identified emerging new tools, data and analytical protocols that were helping them bring accountability to marketing. Lastly, from the task force participants, we assembled a catalog of metrics to help marketers select those that were applicable to a diverse universe of industries. (See Appendix I)
But everyone who participated in last year's task force believed this work was but the start of a journey - not a destination. That has certainly proven to be the case! Everything we learned in 2006 shows marketers are making progress across the board; yet, we have seen continuing pain points, barriers and frustrations. How to overcome them will be the focus of this 2006 report.
2006 Marketing Accountability Purpose and Approach
The purpose of the 2006 marketing accountability study is to continue the journey towards ‘Total Accountability'.
We did this by changing our approach slightly from the 2005 Report. Specifically, we broadened our universe of ANA member contributors substantially beyond the specific members of the original Task Force.
We also broadened our scope to include new sources of data. One of the most important was the third annual ANA Marketing Accountability Survey, conducted in conjunction with Marketing Management Analytics (MMA). This survey added valuable numerical data to our perspective acquired through numerous personal interviews of members. The survey data confirmed much of what we heard in individual interviews and provided a clearer context. In this way, the Survey data enhanced our overall understanding of accountability.
In addition, the Task Force reached out for more input at the 2006 ANA Marketing Accountability forum as well as at a CMO 2006 Marketing Accountability Purpose and Approach roundtable at the 2006 Masters of Marketing Annual Conference in Orlando. Lastly, the subject of accountability was raised at numerous regional meetings which afforded many members their first opportunity to comment on accountability directly to ANA Marketing Accountability Task Force members.
Lastly, on behalf of the Task Force, the EMM Group with the assistance of MMA interviewed marketers throughout 2006. Both EMM Group and MMA listened to the challenges and successes ANA members experienced in their continuing efforts to be more accountable.
On behalf of the Task Force, we would like to thank all of those ANA members who took the time to share their experiences. We would also like to extend a special thanks to the EMM Group and to Gordon Wade, who once again guided the ANA Marketing Accountability Task Force with his tireless energy, wit and dedication and passion about this important topic.
Key Findings
A key challenge confirmed by the 2006 ANA/ MMA Marketing Accountability Survey is that marketing accountability is still too often an activity trapped within the silo of the marketing function itself. More than 60% of companies in the study reported no cross functional involvement whatsoever in developing marketing accountability. Where this occurs, everyone reports continuing frustration in gaining credibility from the balance of the corporate functions who are excluded (or exclude themselves) from participation in validating marketing's accountability.
Conversely, the most encouraging sign is the slow but perceptible involvement of multiple functions in a marketing accountability process within companies. Particularly notable are the involvement of the procurement and especially the finance functions in many companies. Looking behind the numbers from the 2006 ANA/MMA survey, we learned that over 35% of companies had some kind of ‘cross functional' marketing accountability team (in most cases including finance). In responding to another question, nearly 30% claimed ‘full cooperation between marketing and finance in establishing return on marketing investment metrics.'
One marketer serving on a team with a Finance member observed that the two disciplines were ‘teaching one another' their respective languages. At one of the 2006 ANA forums, a procurement participant on a company accountability team said ‘we are inventing a common language so we can educate management'. In several cases, finance and procurement participants pointed out that because they came from functions that are measurement and metrics oriented, it was easy for them to bring that functionally required approach to a discussion of marketing accountability.
At this writing, we sense that marketing and finance, two functions that have been at swords point for years, have realized that their individual success depends upon collaboration. Where this is happening, and it is happening at many, many companies, the real winners are the shareholders.
The involvement of rigorous metrics oriented functions is proving particularly valuable in business to business (B2B) companies where capturing meaningful data or having available data be accepted as meaningful by management has historically proven to be a challenge. But at B2B companies such as Intel and IBM, support functions on accountability teams have been particularly helpful - in one case, assisting marketers in gaining adoption of a brand equity measure as a valid accountability metric, and in another, developing metrics for tying marketing to specific lead generation activities and the sales resulting from those leads.
Unfortunately, all the news isn't positive. Data availability or confidence in available data continues to be a real challenge. In the 2006 ANA/MMA Marketing Accountability survey, fewer than 5% of respondents were ‘highly satisfied' with the accuracy of syndicated data, the timely availability of data or the alignment between disparate data sources. Even one of the most visible successes of the accountability initiative, the development of the Marketing dashboard, has some discouraging aspects because some seem to feel that the very existence of a dashboard makes marketing accountable. This is not the case as various research data confirm.
We need to be clear about this. The creation of dashboards with the right metrics tied to a causal model is a tremendous breakthrough. Nearly 16% of companies report having a dashboard and another 9% are in the midst of roll out. Numerous companies report having specific marketing related metrics on the corporate dashboard reviewed by top management and in some cases the Board of Directors. But in many cases, the focus on getting numbers on the screen has not materially helped address the real challenge that occurs long before and continues long after the nano-second when a new number is displayed within a color graph. The 2006 ANA/MMA Marketing Accountability survey offers some sobering data in this regard:
- Only 10% of respondents felt very satisfied that they could change established strategies and programs if ROI measures showed them to be ineffective.
- Only 4% of respondents felt very satisfied that they could act quickly in response to ROI data to improve results quickly.
- Only 3% felt very satisfied they could improve the quality of the company's planning process.
One ANA member captured the problem elegantly. At one of the Forums she said, ‘We've got to use metrics and the dashboard for more than measurement. We've got to use them for management.'
The real challenge in the period before the dashboard gets populated is the development of a marketing process that can repeatedly produce excellent marketing results in the same way a tightly managed manufacturing process produces excellent quality products time after time. An excellent dashboard number this quarter is little more than a pleasant delusion if no process exists to produce an even better number in this quarter next year. Yet, few if any companies have a bullet proof marketing process. All have a marketing planning calendar, many have mandated activities, some even have required inputs to specified formats, but none of these is a process. For too many marketers, process remains an unfamiliar and potentially a threatening concept.
If few companies have a process to develop a better dashboard number next quarter, even fewer have a process or analytical protocol for discovering why a given dashboard number failed to measure up to expectations. The failure of marketers to apply some sort of causal model to explain failures in performance is a phenomenon which our interviews suggest is pervasive. Thus, in this white paper we will provide some approaches marketers can take to overcome this.
With these findings clearly in mind, we concluded that what marketing needs is not just a pretty dashboard but Total Accountability defined as: a process for planning a better result and a protocol for analyzing what went wrong when the planning fails to deliver up to expectations.
And so, rather than focus on the dashboard in this paper, we shall focus on the process needs before the dashboard and the analytical needs beyond the dashboard.
Definitions and Components of Process: What Is a Process?
Many marketers believe they have a process but it is important to understand what a real process is. A process is NOT a schedule. A process is NOT a few required templates and it certainly is NOT merely a series of internal workshops.
A process is a series of steps arranged in a specified order with required inputs, outputs and metrics designed to produce a desired repeatable result. Grandma's recipe for a chocolate cake is a process. It has inputs (ingredients) mixed together in a mandated order (steps) with specified activities and metrics ("stir for about 3 minutes until it thickens") to produce an intermediate output (the batter) to which you apply the final step (bake for 30 minutes at 350 degrees) with the much anticipated final result being an absolutely delicious cake time after time. (Please see the appendix for an example of the marketing accountability process presented in last year's marketing accountability report.)
The marketing process is somewhat more complex and demanding than Grandma's recipe. This is partly because marketers have competitors who are trying to thwart a successful outcome and also because marketers need to produce not one result but three.
Specifically, marketers need to:
- make this year's mandated contribution to corporate profit
- build brand equity while achieving the profit goal and
- learn more about the target consumer... become more insightful
If true accountability comprises delivering these three results, then one must ask, "What is marketing's equivalent to Grandma's recipe? What are the identifiable process steps ‘before' the dashboard?" We asked marketers about those steps which they associated with generating repeatable excellent results. They identified four steps which occur annually or iteratively as marketers plan activities which drive the dashboard numbers:
- Understanding the target customer
- Having an explicit plan to build brand equity
- Setting and prioritizing objectives
- Creating an integrated marketing strategy
These are not the only steps comprising a marketing process, but these are the steps where most marketers are sadly deficient. These are the steps we want to address in this paper.
The First Step: Understanding the Target Customer
The marketing process begins with the consumer/customer. It is fashionable today for executives to talk about ‘becoming customer focused.' This raises an interesting question... "Where has the company been focused before if not on the customer?"
The late Peter Drucker, as usual, got it right. ‘The purpose of business is to make a customer.' The only way that can occur is to understand the customer and focus on meeting that customer's needs including the often elusive emotional needs.
If your company is failing to build effective plans or if those plans are failing to deliver against expectations, the first place to look is back at your understanding of the customer.
The 2006 ANA Marketing Accountability Task Force members told us that understanding the customer quite often requires understanding segmentation because segmentation enables the development of a sharper focus on customer needs.
Virtually all respondents segment their markets in one of three ways:
- Demographically- age , household income, education, family size
- Attitudinally/psycho graphically- lifestyle, beliefs, self perceptions
- Behaviorally- purchase habits, hobbies, viewing habits, shopping locale
Philip Kotler mentions five criteria for an effective segmentation:
- Measurable: One must be able to determine the values of the variables used for segmentation. This is especially important for demographic and geographic variables.
- Relevant: The size and profit potential of a market segment have to be large enough to justify separate marketing activities for this segment.
- Accessible: The segment has to be accessible for the organization in terms of distribution and communication channels.
- Distinguishable: The market segments have to be sufficiently diverse to respond differently to different marketing mixes so that the brand can draw advantage from that.
- Durable: The segments should be relatively stable over time to minimize costs of frequent changes.
Merely identifying the segment you are targeting is not sufficient to attain total accountability. You must understand the "worth of the customer" - that is the dollar value of product or services which that consumer/customer buys annually or over a lifetime of purchases. In our 2005 Marketing Accountability Task Force white paper we talked about this metric as lifetime customer value (LCV). This is not to suggest that one should always target customers of the highest annual worth or lifetime value. On the contrary, huge fortunes have been made by targeting consumers of modest or average worth (e.g. Dollar General and Wal*Mart). Regardless, you must know the worth of the customer to market responsibly.
If you do not know the worth of the customer, you cannot effectively develop an economically rational trial/ conversion marketing model (i.e. how many marketing dollars can I profitably spend to attract or convert this customer?). Trial/ conversion models vary dramatically from segment to segment, from industry to industry. One thing is certain; you can't build an accountability model if you don't know the worth of the target customer. The 2006 ANA/MMA Marketing Accountability Survey revealed a startling fact. Only 14% of companies responding indicated that understanding the value of the customer was important to the ‘senior executives' of the company. One might suggest that if the C-suite wants marketing to be more accountable they should encourage marketing to understand customer value.
For many industries, understanding the worth of the customer means understanding the lifetime value of a customer, the total value of goods and services a customer may purchase across all the need states your company may offer to meet for that customer's multiple needs. In categories such as consumer financial services, the combined value of the profit available from credit cards, home loans, insurance and the customer's investment portfolio can be a remarkably large amount. It is that tantalizing sum total which has driven the continuing consolidating acquisitions among financial services firms to create the heralded ‘financial services supermarket.'
Some of the more sophisticated marketers from the 2006 ANA Marketing Accountability Task Force told us they combine the concepts of segmentation, customer worth and market penetration to calculate matrices of ‘profit pools' which identify those market segments where the company has already attained such a high share that the remaining unrealized profit pool is small. Total accountability means understanding which segments offer the greatest unrealized profit potential.
In the table below, the segments offer widely varying sizes, rates of consumption and total available gross margin translating into significantly different total segment margin. Once the company adjusts for its share of total segment margin, Segments #3 and #5 have the largest available profit pools for the company.
| Customer Segments | 1 | 2 | 3 | 4 | 5 | 6 |
| # customers | 100K | 150K | 200K | 150K | 200K | 200K |
| $ consumption/capita | $100 | $75 | $125 | $200 | $250 | $250 |
| Total Sales ($Millions) | $10.0 | $12.5 | $25.0 | $30.0 | $50.0 | $25.0 |
| Profit Margin % | 40% | 30% | 50% | 50% | 40% | 30% |
| Segment margin ($M's) | $4.0 | $3.75 | $12.5 | $15.0 | $20.0 | $7.5 |
| Company Market share | 5% | 10% | 20% | 60% | 30% | 30% |
| Available profit pool ($M's) | $3.8 | $3.0 | $10.0 | $6.0 | $14.0 | $2.25 |
The Voice of the Customer
One clear indicator of how well a marketing department understands its target customer is the existence of a broadly shared ‘Voice of the Consumer/Customer.' The ‘VOC' concept is not new having been brought to the U.S. as part of the Japanese inspired Total Quality movement. Unfortunately, many marketing organizations don't take the time to develop a robust VOC. Many companies simply summarize a few demographic facts and label this effort a ‘Voice of the Customer.' The accountable organization assembles a VOC following a ‘who, what, when, where and why' taxonomy. Then they seek to understand the target customer in exceptional depth. Some even create a ‘touch point' map to identify where the customer touches the company's products and services, where company personnel touch the customer and what the nature of the contact is.
The totally accountable company shares its VOC with all critical internal functional groups for the purpose of aligning them around an understanding of the target customer. The best forum for attaining alignment is a tightly scripted multi functional meeting in which each function is asked to respond to four questions about each of the key areas of the VOC: Is this fact/ conclusion about the customer correct from your functional perspective?
Is it a significant issue that you must address? What action should be taken based on this aspect of the VOC? What does this aspect suggest that you don't know or need to know about the target customer?
A multi-functional team meeting around the VOC can lead to productive actions across the entire demand creation value stream. It is also a key contributor to the creation of a ‘learning plan' which all totally accountable companies should have.
One of the primary outputs of a VOC or a ‘touch point map' exercise is the identification of ‘the moment of truth' or that ‘aperture moment' when the product or service is most keenly experienced by the customer. The accountable marketer should be constantly searching for that nano-second when the customer grants permission to sell him something or tell him something about the company and its products. A learning of this nature can drive the development of a distinctive and effective integrated marketing plan.
Using The VOC To Find The Emotional Link Between Brand And Customer
One of the major attributes distinguishing the totally accountable company is its intense focus on understanding the emotional links between the customers and their usage experience with the company's product or service. Some companies facilitate understanding of that link by creating a Voice of the Customer taxonomy which includes concepts such as an ethnographic depiction of ‘a day in the life' of the consumer/ customer. These VOC taxonomy nodes exist to force researchers and marketers to understand the context in which the product or service is experienced. Other concepts in the VOC such as customer ‘hopes and fears' lift it above a desiccated recital of performance attributes into the domain of emotional engagement where buyer and brand bond in the inner sanctum of the customer psyche.
At the deepest level, this search for customer understanding is seeking an ‘insight,' one of those rare ‘eureka!' shouting, forehead slapping moments when marketers are handed the combination to the customer's safety deposit box and an invitation to take what you can carry out of the bank. Marketers spend lots of time talking about insights much as 19th century explorers spoke about finding the source of the Nile. Often marketers will refer to the dozens of ‘Insights' they have about their brand or product category when what they really have are not insights at all but merely a series of ‘nice to know' facts or a conclusion more useful to media planners. A true insight is ‘a profound understanding of customer behavior which can create competitive advantage.' It's when Gillette realized that women feel that body hair is unfeminine and that removing that hair can ‘reveal the (very feminine) goddess within'. An insight is Lipitor's realization that active, fit people do not comprehend they can have dangerously high cholesterol which they need to have checked and treated. It is Budweiser's intuition that beer is more about male bonding than about taste. And, Michelin's understanding that the choice of a tire is a way of honoring the terminal value of protecting the safety of one's children.
The totally accountable marketer can always explain how each piece of communication with the target customer is connected to the critical (and often emotional) insight about the customer. The insight becomes the silver thread knitting together all consumer / customer interaction.
The Second Step: Having an Explicit Plan to Build Brand Equity
Marketers in the totally accountable company have three responsibilities:
- Delivering the volume and profit numbers in the annual budget
- Learning more about the target customer
- Building brand equity
The latter responsibility is important for two reasons. Brand equity is money in the bank. A review of the total market place value (capitalization) of any publicly held company will reveal that most of the value of the company is traceable to ‘brand equity' or the belief that the company's hold on the minds, hearts and pocketbooks of its customers will continue into the future.
A host of studies have been conducted demonstrating the correlation between brand equity and the marketplace value of the company. These studies document how brand value contributes to various financial factors such as the ability to sustain higher margins, lower the cost of introducing new products, make cash flows more predictable etc. One study, by the economic consultants Stern Stewart, is particularly noteworthy. They correlated market performance, as measured by their Economic Value Added (EVA) concept, with brand equity fundamentals, as measured by Y&R's Brand Asset Valuator (BAV) brand equity measurement tool. This study which covered numerous companies and industry types demonstrated that companies with strong Brand Equity measures in the areas of ‘differentiation' and ‘relevance' dramatically outperformed those with weaker measures in these areas, as measured by changes in EVA.
The second reason totally accountable marketers should focus on building brand equity is this: our work with the 2006 ANA Marketing Accountability Task Force demonstrated that in most companies no one else explicitly owns brand equity. Unless the marketing leadership steps forward to claim this extraordinarily important asset of the company, one of the critical enablers of corporate growth will languish or worse still be dissipated by a series of harmful short term actions.
Despite the critical importance of building brand equity, data suggests that it is being neglected by numerous companies. The 2006 ANA/MMA marketing accountability survey helps explain why. It revealed that 40 % of respondent companies don't track changes in the financial value of brand equity and only 5% were ‘very satisfied' in their understanding of how marketing effects the marketplace value of brand equity. Furthermore, interviews conducted with ANA members indicate that few companies have any explicit process or plan for building brand equity. This is unacceptable. Few would tolerate any other major corporate function's not having a process or plan for delivering repeated 14 excellence in the area for which it is primarily responsible. Imagine a food manufacturer or a restaurant without a process to guarantee food safety across the product delivery stream. Yet, we see few marketers who have a documented repeatable process for building brand equity.
Those few who do have processes and plans create what some call a ‘Long range equity action plan (LEAP).' These are documents which extend across a longer time horizon (three to five years) and contain specific strategic objectives (some times called ‘imperatives') the purpose of which is to drive specific customer attitudinal or behavioral metrics behind which all the functions of the company are aligned. Some of these ‘imperatives' may be under the direct control of the marketing function such as advertising positioning or targeting a particular group of consumers who may have weak attitudes towards the brand.
In many cases, however, the imperative identified for improvement may NOT be under the direct control of the marketing function. These imperatives may involve a product or service improvement internally owned by manufacturing, by store operations, by R&D, by packaging, by sales or even by finance. In these instances, marketing's power lies in its understanding of the customer and its ability to link the specified non-marketing improvement with an improvement in customer attitudes that drives one of the critical contributors to brand equity enhancement.
The point is this: until companies recognize that they need a long term plan to improve brand equity in the same way that companies have long term plans for facilities expansion or product cost improvement, the company cannot be and will not be totally accountable.
Example of an Equity Building ‘Imperative'
Detailed below is a fictitious example of an equity building imperative from pharmaceuticals, specifically from the rheumatoid arthritis disease state. In this example, the marketer uses a ‘contribution to preference' factor analysis protocol to measure its equity. We do not advocate any specific research protocol for becoming totally accountable only that marketers measure equity with a protocol utilizing analytics which facilitate understanding brand equity based on emotional and functional attributes.
In this approach, customers (physicians) are asked why they prefer Brand A to brand B. Their responses are grouped into related factors and mathematical analysis is performed to ascertain which factors drive preference and by how much. This type of protocol is used in dozens of diverse verticals. Its utility is definitely not limited to pharmaceuticals.
In the following example, ‘Brand A' the pioneer in this treatment category is preferred over a new drug ‘Brand B' which has only been available for about 6 months. Despite the recent introduction of Brand B, the overall preference for Brand A is relatively small (65 vs. 58) and brand B has certain advantages primarily driven by its ease of administration.
The key to identifying the imperative that could build Brand A's equity lay in the dynamics behind the equity scores in two important respects. The first was the different delivery mode of the two drugs. Brand A is delivered by infusion which requires a visit to a hospital or physician's office every 6 to 8 weeks and a two hour stay while the drug is administered. Brand B, the newer medicine, is self injected at home by the patient every 2 weeks and takes less than five minutes to administer.
Brand A's marketing personnel had done extensive mining of the brand equity data and knew that among those doctors who valued brand A for its high patient compliance and for safety in use, brand A's share of prescriptions was significantly higher. In fact they could predict with mathematical accuracy the increase in market share and sales volume associated with an increase in their ownership of these two factors in the mind of doctors.
The answer to changing attitudes and altering behavior lay in understanding the Moment of Truth when the prescription decision was made and in understanding the rational and emotional motivations of the patients and physicians. The patients were generally older often with multiple co-morbidities ranging from osteoporosis to serious digestive maladies. They were generally ignorant of their treatment alternatives and were eager to receive and willing to accept advice from their physicians. For their parts, physicians would in most cases present treatment options to the patient and guide that patient towards a decision based on their own experience and evaluation of the patient.
The marketers had learned two other critical pieces of data hinted at in the Brand equity data. Physicians and patients were convinced the Brand A was ‘safer' because it was administered in a medical setting by professionals. Second, the doctors were convinced that compliance (adherence to a rigorous schedule of dosage) would be better with Brand A because patients would not inject themselves regularly, and in some cases not at all. This non compliance would ultimately cause the patient to suffer and elicit frustration for the physician as the patient's health deteriorated.
Mathematical analysis of Brand Equity attitudes indicated that emphasizing the safety of the medically administered Brand A would drive an overall favorable attitude (equity) among physicians, especially rheumatologists who were the physician segment with the highest annual prescribing value. As a result, the marketers would emphasize that physicians should re-assure patients (e.g. "I have never had a serious emergency from this drug") at the moment when the patient was choosing between Brand A (administered in a medically supervised setting) and Brand B (self injected at home by an already fragile patient).
Understanding the structure of the brand equity Contribution to Preference model gave the marketers confidence that increasing the score on these two factors would increase overall preference.
Accountable marketers can use their knowledge of the target customer to identify attitudes that drive enhancements in brand equity. They can build these attitudinal targets into brand equity improvement plans and use them to create value propositions for advertising development. In this way, a long term equity action plan gets linked to this year's marketing plan and today's advertising execution.
The Third Step: Setting and Prioritizing Objectives
The annual marketing plan is best understood as a series of objectives which when added together comprise the annual goal. Accountability implies two things: measurement and an objective. The totally accountable marketer should try to associate every expenditure with a specific objective, and measure whether or not the expenditure attained the objective.
Interviews with ANA members indicate that some marketers are striving to do this. The characteristics of those marketers are as follows: Aggressive collaboration between the finance and marketing functions Using ‘net present value' as a metric to prioritize various marketing initiatives Planning ‘vertically' by initiative rather than horizontally by channel or type of expenditure
Let's expand upon these characteristics. First, the aggressive collaboration between finance and marketing is critical. Of all the developments caused by the demand for marketing accountability, none has been more necessary and more surprisingly successful than the growing, productive collaboration between the marketing and finance functions. The two functions have always ‘worked together,' but their working relationship has, in some circumstances, tended to be more that of wayward driver and traffic cop or failing student and demanding teacher. Some marketers may have viewed their finance colleagues as adversaries bent on driving down costs and expenditures by constantly looking for opportunities to reduce marketing budgets. For their part, finance may have seen marketing as the one function with no discipline, no accountability, and scant proof that the expenditure was productive or even necessary.
The twin and sometimes competing objectives of sales growth and efficient expenditure of funds has pushed marketers and finance together. Marketing is a logical driver of sales growth and finance is a logical arbiter of expenditure efficiency. In many companies, the two functions have come to appreciate that their fortunes are interdependent. Each has recognized that one might be able to help the other achieve common objectives and so the function of ‘Marketing Finance' has become less of a punitive score keeping function focused on cost control and more of a resource that could help marketers understand the implications of certain expenditure choices.
In many companies, the finance function is helping marketing develop financial models from which marketers can begin understanding the implications of expenditures before they commit dollars. These simple models often start with concepts such as reach and frequency of a marketing initiative. They can be applied to expenditure options as diverse as redesigning sales force call patterns to internet campaigns. They ask basic questions such as: ‘How many customers will it reach? How many times? What is a reasonable assumption regarding trial and conversion per 1000 customers reached?' Etc.
From simple models such as these, which almost every company can develop without exotic math, the finance function can develop calculations of the ‘net present value' of a marketing initiative. This approach allows marketing management to look across the panorama of multiple marketing initiatives on one brand or a portfolio of brands and prioritize expenditures based on the net present value of N initiatives. Net present value or NPV has certain advantages versus ROI in that it is an effectiveness measure with efficiency components built in whereas ROI is strictly an efficiency measure. Companies such as Procter & Gamble which are focused on growth rather than raw efficiency tend to favor the use of NPV over ROI.
Some cynics often point out that the best way to increase marketing ROI is to spend no money and simply milk the franchise, withdrawing priceless reputation from the brand's equity bank until there's nothing left. Proponents of using NPV point out that it focuses on growth and on cash while having the added value of forcing marketers to focus valuable human capital (marketer's time) on projects which generate the most cash long term.
The use of NPV in the planning phase of the marketing demand creation process has the added advantage of creating a target and a baseline for evaluating the effort. This in turn encourages (some would say demands) after action analysis and thereby starts a virtuous circle of plan, do, analyze, improve, and then plan again.
This brings us to the last characteristic of the objectives setting area and that is planning ‘vertically' by initiative as opposed to horizontally by channel or expenditure line item (television, direct mail, internet, etc). This is an extremely important concept for many reasons, but one of the most important is that it aligns target customer, and brand equity enhancement with the expenditure of marketing funds. Planning vertically also means planning by initiative first then planning by channel (network television, direct mail, creating a web site, developing a new product sales drive, etc). Planning vertically requires the marketer to ask a simple question: "What specifically am I trying to accomplish with this effort and what is the best way to accomplish it". In other words, it starts with an objective tied to an initiative or project instead of starting with the commitment of dollars to a marketing channel with no equity building or sales building metrics.
The schematic table below suggests how planning vertically, using NPV can help make marketing more accountable. Each initiative is clearly identified. Each has a specific target audience, specific effort assigned to it and specific NPV estimated by the marketing/finance team.
| Initiative (Target customer) | Initiative #1 (Customer Group A) | Initiative #2 (Customer Group B) | Initiative #3 (New Customers | Initiative#4 (Retail Buyers) | Initiative #5 (In-Store Personnel) |
| Expenditure Type ($ Mil) | |||||
| Spot TV | 1,200 | ||||
| Direct Mail | 250 | ||||
| POS material | 180 | ||||
| Web site | 100 | ||||
| Trade show | 250 | ||||
| Direct Mailed price reduction offer | 750 | ||||
| Training program and sales incentive | 300 | ||||
| Production cost | 150 | 50 | 50 | 30 | 30 |
| Total cost | 1350 | 480 | 900 | 280 | 330 |
| Equity factor target (effect) | Factor A (+++) | Factor B (++) | Factor C (+) | N/A | N/A |
| NPV | 424 | 300 | 250 | 88 | 50 |
In the chart above, the term ‘Equity factor target' refers to the desired or estimated effect that the dollars expended behind the initiative will have on a specified component of the brand's attitude among the target audience. i.e. this effort will have asignificant (+++) positive impact on ‘factor A'.
The NPV (net present value) estimate is a financial estimate of the current value of the anticipated profit stream generated by the expenditure among the target audience for the initiative. The NPV concept calculates cash generated over time giving more value to that cash generated quickly and less to that generated two and three years out. Conversely, the net present value approach subtracts the cost of the effort from the profit stream and does so placing a higher value on dollars expended soon than those spent later. All future cash whether incoming or outgoing is discounted by a common factor agreed to by the company's finance department. NPV is primarily an effectiveness measure with an efficiency component ‘built in' For example, two initiatives could have an identical ROI but vastly different NPV's because one project effects millions of consumers and generates lots of cash while the second initiative is small and effects only a few thousand customers, perhaps in a limited geographic area. Both are equally efficient (have the same ROI) but the larger initiative is much more effective (has a higher NPV).
The Fourth Step: Developing an Integrated Marketing Strategy
Dramatic changes in the way customers seek and process information have undermined the traditional methods of communicating with customers and persuading them. Marketing practitioners in all verticals agree that ‘the old marketing model is dead.'
Developing a new marketing model is a daunting challenge and that has been complicated by the explosion in marketing choices spawned by digital technology. As if the sheer number of choices were not enough, recent studies strongly suggest that the same customer varies her choice of information channels depending upon the product or service category. For example, a customer who depends primarily upon websites for detailed information about automobiles and pharmaceuticals may depend heavily upon magazine advertising for fashion and cosmetic information. Therefore, in a rapidly changing technological and cultural environment, every vertical and every initiative requires fresh thinking. It is marketing as digital kaleidoscope, ever shifting, ever changing 24/7.
The marketing industry has begun rallying around the concept of integrated marketing strategies (the simultaneous use of multiple mutually re-enforcing channels and activities behind one marketing initiative) as the answer to the decline of the old media, the rise of new media and the hectic time starved decision cycles of today's customer. However, our interviews indicate that only a few in the marketing community have devised a rational dependable process to help them develop more sophisticated multiple component integrated marketing plans.
One thing is certain, in a marketing situation where choice and change are the rule not the exception; marketers must have a process to bring order from chaos.
The totally accountable marketer starts developing an integrated strategy by asking two fundamental questions:
- Who is my target?
- What is my objective?
The answers to these two questions focus thinking and most importantly narrow the choices for the integrated campaign.
For example, if the target is non users and the objective is new trial, the appropriate choices for the integrated campaign are quite different from those wherein the target is a loyal user for whom the objective is increasing product usage or repeat purchase.
The next questions driving integrated campaign development are:
- What are current behaviors of the target customer?
- What are the current attitudes of the target customer?
All marketing is about changing or reinforcing attitudes, and then changing or reinforcing behaviors. Until one understands the current attitudes and behaviors of the target customer, it is difficult to select a campaign component which can change these behaviors.
These questions drive the marketer back to the Voice of the Customer which should capture current attitudes and behaviors. Some of the ‘unconventional' nodes in the VOC (i.e. questions such as ‘What are the customers' hopes and fears?' and ‘What is the day in the life of the Customer?' can be surprisingly helpful in understanding attitudes and behaviors).
Gaining internal alignment across multiple functions about current attitudes and behaviors can sometimes be a daunting task because different functions (R&D, market research, sales, store operations, the help desk, etc.) often have dramatically different notions about these fundamental issues. That's why drawing upon a multifunctional group to validate the VOC is imperative. That's why gaining multi-functional input on integrated marketing campaign development is highly desirable.
Once the totally accountable marketer understands current attitudes and behaviors, he can ask ‘What are the desired attitudes and behaviors? What is it I want the customer to think or feel? What is it I want the customer/ buyer/ store personnel, order clerk to do?' Moving through this cadence of questions regarding current and desired attitudes, current and desired behaviors may seem mechanical and obvious but the accountable marketer realizes it is part of sorting though a complex maze of marketing choices. The answers to the questions help to narrow the range of choices. In fact, some refer to the process as ‘short listing' media or promotional alternatives.
Before proceeding to choose the desired combination of marketing alternatives, however, a few other questions should be asked: ‘What are the barriers to achieving the desired behavior? Are these barriers emotional, nonrational barriers? Are they rational barriers? (E.g. the biggest barrier to trial is that my product isn't in distribution where the target consumer shops). The answer to these questions can play a critical role in further narrowing the appropriate choices for an integrated campaign.
A useful guide in that narrowing process is yet another question: ‘What is the specific marketing task I am asking this campaign to perform?' Is it to get the customer to include my brand among a consideration set for a vacation choice? Is it to drive a patient to a doctor for a specific medical procedure? Or if I am a marketing a chemical to an manufacturer in a B2B environment, is it persuading an internal product developer at the customer to specify my molecule for a new product formulation?
At this point the marketer is ready to return to the VOC where the company should have captured historical responses to the ‘how' question (i.e. ‘How do customers respond to marketing expenditures?'). In this sector of the VOC, various quantitative and qualitative data regarding the efficiency and effectiveness of various channel alternatives are captured. Over the past decade and especially over the past five years, enormous progress has been made in understanding how various marketing alternatives ‘engage' with customers to convey a message or sell product.
In some verticals such as consumer packaged goods in which time series purchase data is available, market mix modeling has yielded sophisticated response curves mapping sales response to the marginal expenditure of marketing dollars in a dazzling array of combinations. At its highest stage of development, this approach enables marketers to de-compose expenditures by channel and then create optimization scenarios combining expenditure options in an almost infinite number of channel/dollar combinations. Despite the promise of this extraordinary capability, only 7 % of respondents in the 2006 ANA/MMA Marketing Accountability survey claimed to be very satisfied with their ability to understand the sales impact of every element of the marketing mix. Only 6% were very satisfied with their ability to estimate the effect of alternate marketing plans.
Everyone familiar with this capability recognizes its primary weakness. It is generated by analyzing historical data and therefore cannot accurately predict precisely how the same combination of expenditures will perform under a future scenario where the competitive situation will often differ from the situation under which the response curves were developed. That having been said, the capability to assemble multiple scenarios with the help of experienced marketing oversight is one of the two or three greatest advances in the SCIENCE of marketing in the past 50 years. Any vertical which has the time series data to develop these multichannel integrated marketing optimization scenarios and is not spending the money to understand their power is almost assuredly not behaving in an accountable manner.
Unfortunately, many verticals lack reliable time series data to develop these scenarios but over the last several years yet another new analytical weapon has been developed to enhance the creation of integrated campaigns. This weapon is often called ‘engagement' measurement. This new measurement alternative like all measurement alternatives has its pluses and minuses. This approach has two advantages of remarkable value in building an integrated marketing campaign. First, is its capability to address virtually all marketing contact points (channel options) in virtually all verticals in virtually all countries at a relatively modest cost.
Second, is its capability to rank order these channels by their ability to engage defined customers and influence them to buy. This enables marketers to assemble multi contact point integrated campaigns with unprecedented levels of confidence. We recommend that marketers test and experiment with one or more of these new engagement research methodologies.
Beyond the Dashboard
Over the past several years thanks to work in academia, at research suppliers, in marketing departments at companies, in the consulting community and in organizations such as The Marketing Science Institute, the Advertising Research Foundation and the ANA, marketing measurement and marketing accountability has dramatically improved. The clearest testimony is the growth of various marketing measures that now appear on corporate dashboards in literally hundreds of companies.
The metrics maturity model developed in the 2005 ANA Marketing Accountability Task Force report gave companies a useful guide to assessing where they stood on the maturity curve (See below and Appendix II). Its identification of the four critical components of marketing accountability (data, metrics and analytics, process and culture) helped companies identify a path towards improvement.
Metrics Maturity Model
| Aware | Practicing | Established | Leading | |
| Data |
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| Analytics & Metrics |
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| Culture |
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| Process Embedment |
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Source: Model adapted from DoD Metrics Review, May ‘04
Most organizations are between "Aware" & "Practicing
From interviews with ANA marketing practitioners, it became clear that improvements have been made in the areas of data, especially the availability of the new engagement data developed by various vendors, and organizational collaboration of the marketing and finance functions.
Where marketers are still falling short however is using the dashboard as a catalyst to understanding necessary steps for improvement. It is still a measurement tool, not a management tool.
Several factors appear to contribute to the paralysis setting in after the dashboard light changes.
Factor #1 - Neither marketers nor management are spending enough money on accountability and analytics. The 2006 ANA/MMA Marketing Accountability Survey reported that over 50% of companies responding had no separate budget for accountability or were funding those efforts out of working marketing dollars. The study further showed that nearly two thirds of companies who provided an estimate were spending less than 2% of the total marketing budget for accountability and analytics.
Factor #2 - The metric chosen isn't actionable; it is an input metric or an intermediate metric with a vague provenance leading to nowhere. Far too many metrics are lagging indicators presenting a perfect rear view mirror image of the crash behind you but no forward looking line of site to what is about to occur.
Factor #3 - The metric chosen isn't connected to the strategic responsibility assigned to marketing within the company. Even though the metric says something is wrong, no one accepts that marketing has the power to improve the measure especially the marketers.
Factor #4 - No one demands an understanding of why a number turned south. Everyone is working at such a frantic pace that neither management nor marketers feel they have the time to slog into the swamp of data to understand what went wrong and develop a plan to fix it.
Factor #5 - Marketers have no causal model, no generally agreed or, better still, proven correlation linking a specific metric to a sales result. This goes back to choosing metrics that are leading versus lagging indicators, but it goes deeper. Marketers cannot produce a causal model and identify leading indicators unless they have an analytical model and actually employ the model until it yields results.
Simply stated, no dashboard will produce accountability unless it is fed by a program which is adequately funded, intelligently designed and committed to analytics. Based on our discussions, four behaviors are required if marketers are going to become totally accountable.
Accountable Behavior #1- Demand analysis at the level of the individual initiative, especially when a recommendation is made for a major initiative such as a new product introduction or the penetration of a new target customer group.
Accountable Behavior #2 - Express that initiative‘s objective so that it can be measured. Identify the major assumptions that lead you to conclude the effort is worth doing and make them explicit (e.g. ‘I'm going to reach this many customers with this many messages and those customers are going to change their behaviors as follows').
Accountable Behavior #3 - Create a measurement plan. Make explicit how you are going to measure the success of the initiative. These should be linked to the objectives and assumptions mentioned above.
Accountable Behavior #4 - Develop a causal model that identifies over the longer term, which metrics are most reliably predictive of marketplace success.
Accountable behavior #5 - Recognize that you must spend money to make money. Most aggressive accountability programs backed by contemporary analytics will produce dramatic returns exceeding 10 to 1, even greater returns during the introductory phases.
These accountable behaviors can all be enabled by developing an analytical framework. Totally accountable companies have such a framework and use it to provide structure and direction to their accountability efforts.
An Analytical Framework of Who, What and How --The Key to Accountability
Analysis isn't easy. Often analytics, whether from third parties (vendors) or from a corporate group, focus on the result of the expenditure (the ROI). They rarely if ever offer insight as to why the ROI wasn't quite what had been expected. Truly valuable analysis is focused at the latter issue (why was the ROI, the NPV or sales number what it was?). That's why one needs an analytical framework. If one is unable to develop a homegrown version there are frameworks offered by many vendors including EMM Group (the author of this report for the ANA), Integration-IMC and others. EMM Group and Integration-IMC espouse that marketing organizations build marketing metrics programs around a simple, yet effective "Who, What and How" framework in order to become more accountable.
The framework itself is easy to articulate but it involves disassembling and then reassembling the component parts of marketing. The framework asks for the answer to one all encompassing question: ‘Am I focusing on the correct target group with the right message delivered by the right channel to achieve my objective.' To arrive at the answer to that question, however, requires the marketer to slog through a number of permutations and combinations of who, what and how. Fortunately, with multiple repetitions, the questions get fewer and the answers get clearer.
Outlined below are examples about how to establish and use the framework.
WHO
When a metric fails to meet expectations or when you want to improve an already excellent metric, you start by focusing on the customer. Any given customer set can be segmented in a myriad of ways but virtually all fall along one of three basic axes, demographics, behaviors and attitudes.
Demographics
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Customer geographic location
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Age / income / education / race / sex Job title / function
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Socio-economic class
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With/without a characteristic (type of dwelling, disease, etc)
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Size or type of customer (SIC code)
Behavior
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Volume of purchases (heavy / medium / light )
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Frequency / recency
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Type of purchase (order size, number of items, categories purchased)
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Loyalty (share of requirements)
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Usage occasion
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Purchase switching Increase in annual consumption / purchase
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Trade up to higher margin products or services
Attitudes
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Net promoter score (high / medium / low)
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Prefer X/Y/Z characteristic / function
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Need state / attitude factor
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Reason for purchase
For example, if the brand were in the oral care category, the ‘who' might be:
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Total buyers
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Large families (demographics)
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Household head < 30 (demographics)
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Loyal buyers (behavior)
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Consumer segment offering greatest profit potential (behavior)
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Purchase most often in mass channel (behavior)
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Whiteness concerned (attitudes)
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Gum concerned (attitudes)
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Cavity concerned (attitudes)
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Germ concerned (attitudes)
The metrics across these multiple ‘Who's' might be:
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Intent to purchase
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Purchased last
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Purchase exclusively
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Will consider
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Brand I have recommended
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Most innovative brand
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Best value
If the vertical were a service such as package delivery, the segments might be:
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Total customers
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International shippers
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Frequent shippers
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Primarily ground / air
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Contract shippers
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Non-contract shippers
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Shipment size < 5lbs,5-20 lbs, 20 to 100 lbs, > 100 lbs
The metrics could be:
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% increasing volume / % decreasing volume
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Ease of use
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Pick up reliability
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Delivery reliability % profit margin per mile
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Consideration set inclusion
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Company I recommend to others
The intent is to find the combination of customer segment and metric which provides a predictive insight into future performance and thereby facilitates the development of action to prevent the problem and improve results going forward.
WHAT
If a metric fails to improve or even declines, then, after investigating the target audience issues, the analysis should focus on what the marketer is offering. By ‘What' we mean the value proposition or benefit you are offering to customers.
We recognize that ‘what' could logically include issues outside the functional responsibility of marketing. For example, in consumer packaged goods the performance attributes of your product versus a competitive product as experienced by the consumer. In retail, the ‘what' could be the in store environment or the service quality in your outlet versus a competitive outlet. In a business to business vertical, the ‘what' could be the price of the product or a logistical capability issue versus a key competitor. These disparate characteristics (product performance, in store service, price or logistics) are important components of the ‘what' experienced by the customer and need to be understood in detail. However, as a general rule, the marketing function has limited short term control over many of them. Therefore, they need to be reported separately and not as measures of the marketing function's responsibility.
Marketing is primarily responsible for conveying the value proposition / benefit to the customer so marketing needs to measure the appeal of its message.
This paper does not presume to tell marketers which measurement protocol to use. Most marketers have competent professionals who are familiar with various vendor's approaches to measuring the appeal of a benefit. Our purpose is to lay out some broad principles and concepts which leading marketers find helpful in understanding the appeal of the ‘what.' First and most important, make sure to ask the right target respondent. This obvious caution is actually somewhat difficult to achieve in many B2B industries where the decision makers and decision influencers may be buried in the customer organization or not readily accessible to who ever is trying to generate a response. The success of customized internet panels that facilitate responses from normally inaccessible executives is a tremendous boon to marketers in various industries where marketers have long depended on second hand or apocryphal data regarding benefit appeal.
Second, look beyond a top line preference number measuring the overall preference for Brand A versus Brand B. The whole purpose is to isolate a specific benefit or the one you are basing your marketing appeal upon. Marketers should utilize a protocol with rich diagnostics offering explanations or at least hypotheses for why a specific number is what it is. Some ANA members employ the popular Net Promoter Score (NPS) approach as the primary metric for measuring a brand's equity. They tell us that they also utilize supporting diagnostics to help explain why the NPS number ( 8.6, 7.5, etc.) is what it is and what needs to be done to improve it.
Marketers should use protocols that help them understand the relative appeals of various benefits especially among various target audiences. An example is the Contribution to Preference approach cited earlier in this discussion. By grouping responses (reasons for preference) under various similar factors, the marketer gains valuable insight into why Benefit A is not moving overall preference quite as powerfully as is Benefit B.
Third, use a protocol that provides a competitive context. Knowing how you measure in the absolute is certainly helpful but most marketers compete in a multi brand environment where your company may be excellent at Benefit X but a competitor may be conveying that benefit in a superlative fashion. One of the problems with the monomaniacal focus on Marketing ROI is that it provides zero competitive context. You may have a satisfactory number but it may be much poorer than a direct competitor's return in the same channel. The same logic argues for a competitive context in measuring the ‘what.'
Look for ways to express your benefit in terms of a difference between you and your competitors. Try to establish a metric for ‘ownership' of a benefit in this competitive context. Ownership may mean a much higher rating than a competitor on a 5 point scale or it may mean being allocated more chips in an 11 chip allocation exercise. Strive for a significant and growing variance between you and competition.
Fourth, measure benefit performance and customer comprehension with a consistent protocol over time. In many verticals, customer reaction to benefit positioning changes very slowly. Expecting a change in a few months just isn't realistic in most verticals under normal circumstances especially when its actual deliverance may depend primarily on other corporate functions (product development, in store service, logistics, pricing, etc).
That's why some marketers understandably want their performance measured by factors over which they have primary control (e.g. ad copy scores, especially the persuasion element). Some marketers argue that this is the fairest way to measure their contribution because it removes all the factors (i.e. product or service delivery, media weight, pricing and distribution) which can and do affect customer rankings in the marketplace yet are beyond the direct control of the marketing function.
With these as principles or guidelines, here are the kinds of metrics which you might consider developing:
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Relative importance of chosen benefit versus all other benefits in the vertical in the target audience (Benefit A = 28%, Benefit B 22%, etc.)
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Change in the importance of that benefit (Benefit A was + 5% now +9%)
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Ownership of that benefit as measured by metrics such as:
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Relative ranking difference on a 5 point scale on Benefit #1
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Brand A ranked at 4.5, Brand B at 3.9 , ∆ 0.6
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Relative ranking versus average on 100 point scale on Benefit #2
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Brand A + 10 points, Brand B -5 pts, ∆ 15 points
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Share of mentions in category on Benefit #3
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Brand A gets 28% of mentions; Brand B gets 22, ∆ 6% points
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Ratio of mentions versus share of market on Benefit #4
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Share of mentions = 33 while market share= 22; ratio = 33/22 = 150
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Absolute score on Benefit A in copy test versus previous copy
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Copy persuasion score
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Copy point registration on:
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Different
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New
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Likeability
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Informative, new information, ‘learned something new'
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HOW
Over the past decade, while conventional marketing weapons have become progressively less effective and less efficient, the number of communications options available to marketers has exploded. Not only have the number of options in conventional communications vehicles such as television dramatically increased with the ubiquitous availability of multichannel cable and satellite operations, but completely new options such as search engine driven internet marketing have become extremely important.
As conventional options have become less and less efficient, marketers have turned more frequently to options such as events, trade shows and even targeted special print publications. In many cases, of course, marketers are assembling ‘integrated marketing campaigns' which combine the unique capabilities of various media to produce an effective synergistic campaign. These integrated campaigns often involve three or four separate marketing vehicles in concert with a targeted sales campaign and selling message.
The proliferation of marketing options and especially integrated multi-vehicle campaigns has driven management to ask marketers, ‘Do we need to spend dollar X on vehicle Y when we are already investing in three or four other vehicles at the same time? Why can't you just focus on the one or two channels that are the most effective? Why don't you know how to spend the shareholder's money more efficiently?'
Larger advertisers with larger budgets have been able to address the relative contribution of individual components of these multicomponent integrated campaigns using market mix modeling and various multivariate analytical techniques. But most marketers cannot continuously employ these sophisticated analytical techniques because they are perceived to be too expensive. Additionally, many marketers feel these techniques unfairly penalize the marketing function because they include the effect of many aspects of the user experience over which marketing has little or no control (price, product or service performance, logistics, etc.). Recently several suppliers have developed new approaches to measuring the effectiveness of the ‘how' component of the marketing equation (Who should I target with what message and how should I deliver it?). These approaches differ in various ways. Rather than discuss the merits of one or the other, we shall use one of the newer research approaches developed by Integration - IMC to discuss the general subject. We recommend marketers review all research protocols to choose the one that best meets their unique need.
The Integration - IMC approach focuses on helping marketers choose the most effective marketing ‘contacts' to engage a customer. In their parlance, a contact could be any one of dozens of different marketing vehicles such as television, print, a test drive of an automobile, a closed circuit telecast in a physician's office, a neon sign at a sporting event, a trade show, a website or in store POS material, etc.). Their principal measure is ‘brand engagement points' and brand engagement share. In effect, they provide a one number reading of how various contacts engage with customers on a category by category and brand by brand basis. They DO NOT measure the effect of a marketing option on brand sales only the ability of a marketing option to engage the customer. This approach has the disadvantage of not measuring ROI but it has the advantage of avoiding most of the influences for which the marketer is not responsible (Pricing, product performance, etc.). This approach focuses on decisions for which the marketer can be legitimately held accountable: the choice of marketing vehicles (or channels in their parlance) and the relative monies spent on one contact type versus another.
The research protocol of Integration - IMC and similar approaches has been widely discussed in the marketing research and academic community and most have been subjected to intense reviews and validation by ARF or similar responsible sources. Again, please be aware that other vendors offer similar approaches with varying advantages and disadvantages in cost, comprehensiveness, geographic and industry applicability, etc. For a quick summary of the Integration - IMC approach see Appendix III.
New research techniques provide marketers with new information with which to develop integrated campaigns. These techniques also enable marketers to measure the relative cost of experience points for each of the contact types they employ. Such metrics provide marketers with a new yardstick for evaluating the efficiency and effectiveness of new media options which have proven hard to evaluate using previously available methodologies.
Total Accountability = Total Credibility
The work by the ANA Marketing Accountability Task Force over the past few years clearly indicates that marketers are striving to increase marketing's credibility. Progress has been made but much work remains to be done.
Admittedly, marketing IS harder to measure than other corporate functions. Building robust accountability processes and programs by starting with the best practices outlined in this report, can serve to overcome the skepticism of CEOs -many of whom lack a marketing background - about marketing's efficiency and effectiveness.
To the marketers we say simply, earn a seat at the table by building a robust accountability program. The tools and processes are at your finger tips.
To the CEO's frustrated with Marketing's accountability we say, mandate that funds are set aside to make marketing accountable. You don't need to be a marketing expert to enforce the 10 commandments of accountability shown to the right.
If you follow these ten commandments, you will be well on your way to total accountability.
The ten commandments of total accountability
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Create a multi-functional internal accountability team
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Agree on the expectations that the management team has for marketing
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Choose metrics that align with expectations
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Select predominantly leading indicator metrics capable of driving a causal model
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Create a robust VOC so you understand the target customer
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Demand an explicit plan to build brand equity
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Develop measurable objectives for 90% of marketing expenditures
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Use a rigorous process to build integrated marketing plans
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Analyze 90 % of marketing expenditures using a who, what, how framework
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Create an accountability budget sufficient to measure 90% of marketing expenditures
Appendix
Appendices are available as part of the PDF version of this document.
Source
2006 ANA Marketing Accountability Task Force Findings. Total Accountability: Before and Beyond the Dashboard. ANA; EMM Group. January 2007.