The State of Marketing Accountability
This year, the Association of National Advertisers (ANA) and Forrester Research conducted their second marketing accountability study to gauge marketers' current status in navigating the challenge of measuring marketing, applying technology to it, and making it accountable to the C-suite. Companies large and small participated — 28% of companies surveyed have revenues of $10 billion or more, and 30% pull in less than $500 million annually — to help the ANA understand real corporations' definition of marketing ROI, identify barriers to marketing accountability, and gain insight on marketers' plans to improve the evidence of their value.
Not surprisingly, more sophisticated marketers exercise a greater focus on improving their measurement models than companies focused on sales. Many small companies haven't even begun struggling to define themselves because they have sales on their minds all of the time, leaving hardly any energy for branding. The study found that accountability success depends on a balance between sales and brand concentrations.
|
But give the kids a break — top-line results of the study showed that measurement is the hardest part of marketing. And the No. 1 understanding of marketing ROI the ANA picked up was that it represents the first barrier to accomplishing accountability.
|
The ANA obviously isn't alone in its confusion over the definition of marketing ROI.
|
Good measurement creates new challenges, requiring rapid response and change to established practices. Marketers can't just overlay measures on their old efforts. And maybe that's a big surprise. In an attempt to measure what they do, responsible marketers often find they can't continue along the same path. Measurement not only quantifies marketing's value to the CEO and board but points out weaknesses in marketing process, calling the crew to improve its initiatives.
|
Market mix modeling will gain rapid adherents. Measurement will move to external, third-party organizations. Brand, direct marketing, sales — 51% of respondents track at least one metric in each category. 77% track brand and sales metrics.
|
|
The ANA and Forrester have more work ahead of them. The conclusions arising from the 2004 research revealed that improving marketing performance is hampered by three key challenges:
- What should be measured?
- How do you get quality data?
- How do you implement the changes that improved measurement demands?
Sophisticated modeling techniques show promise for breaking through these barriers.
