Warning - The road ahead could be long and bumpy (and I'm not referencing our current economic situation).  According to a new study summarized in Ad Age, we still haven't made a lot of progress in bridging the expanse between Marketing and Finance. 

The ANA and Financial Executives International have just published and presented a new study at the ANA 2008 Marketing Accountability Conference on a topic near and dear to my heart.

So, which do you want first?  The good news?  Or the bad news?

Personally, I like to get bad news out of the way first, so I can look forward optimistically to good news.  So, we'll start with that. 

The bad news: 

• 60% of financial execs don't think that their companies' marketing department understands financial controls  

• 70% of them don't use the inputs and forecasts provided by marketing in any financial guidance  

• 90% of them don't use any type of ROI metrics for budgeting exercises concerning marketing.

• Only 1/3 of marketing execs say that their marketing goals are aligned with the overall corporate goals

• Another 1/3 say there are no written goals for their marketing department

Wow - there's alot of opportunity for improvement there!

And, now, on to the good news: 

• 60% of marketers are trying to measure their impact on sales

• 33% of marketing execs report that, in their company, marketing and finance are jointly working on establishing metrics and methodologies for evaluating marketing ROI.  (This is up from only 22% last year, so we're going in the right direction!  And hopefully, these projects will start to change the numbers above in the 'bad news' section.)

• Another 50% are at least experiencing some cooperation between marketing and finance

• More than half of marketers use their analyses as evidence to maintain or increase their budgets

Personally, I'm really glad to see that the tide is changing, and collaboration is increasing!  The collaboration is advantageous for many reasons:

Continue reading "Construction Ahead - I hope!" »

Posted by Trina Arnett at 11:19 AM | Permalink | Comments (0) | TrackBacks (0)

I was reading an interesting article the other day in the MIT Sloan Management Review (Winter 2008 issue), titled The Six Key Dimensions of Understanding Media.  In this article, the authors discusses the use of The Genre Model to describe and evaluate the transition from one type of communication to another.  The general illustrations are historical (e.g. business letter --> memo --> email), but one can quickly see how this model can be used to evaluate new and emerging types of communication or media (e.g. email --> blogging --> micro-blogging). 

Given the host of new technologies and media options available with Web 2.0, I highly recommend this article for an analytical method of evaluating and or considering the adoption of new technologies or new media in your corporate culture.  It includes some great examples (IBM Blog Central and MNI Partners’ adoption of Skype) about how real companies are utilizing these new technologies and truly reaping the benefits.  But, in addition, I’d also like to borrow The Genre Model and suggest that we could apply it to the measurement realm.  

In today’s business, there is a multitude of metrics for every aspect of our existence, and more metrics are developed each day!  How are we supposed to know which ones are important?  Which ones will help us grow or improve our business?  How do we select on which metrics to concentrate?  I propose that we use The Genre Model to help evaluate how a new metric may fit in, complement, or supplement our existing metrics. 

Let’s face it, not all metrics are universal.  Every company has a bevy of metrics to guide the business and help explain performance.  Many of these metrics are relevant to different parts of the business.  In other words, not all metrics are of the same value to everyone in the company, because they may not be applicable, or actionable.  In fact, not all metrics in a company are even appropriate for general consumption.  So, how do we decide to create and adopt new metrics?

Let’s take a look at how the six dimensions of The Genre Model could be employed in the area of metrics. When considering the adoption of a new metric, one should probably ask the following questions:

• Why? Why would we use this new metric?  What purpose does it serve?  What expectations do we have from the use of this metric?  Does it show us something different than our current metrics do?  Does it provide more or different information than we already have?

• What?  What is its definition?  What will this metric communicate? 

• Who?  Who will be involved in this metric?  And what are their roles?  Who will define it?  Who will create the actual measurement system?  Who will publish it?  Who will interpret it?  Who will use it?  Who will have access to it? With any metric, it is important to consider the intended audience.  It is also important to be aware of the unintended audience.  In other words, when creating a metric and considering its audience, you may want to try to ensure that people "can't hurt themselves" with it.

• Where?  Where will this metric be published?  Will it be an internal metric?  Or an external metric?  Is it company-wide?  Or is it only pertinent on a regional or divisional basis? Will it be published in paper reports or electronic reports?  Will it be available on a dashboard? 
  One key consideration might be security and portability.  Are you trying to keep this metric confidential and internal?  By publishing it in an email report, is it at risk for external exposure?  Would it be better off on a secure internal dashboard or intranet?

• When?  When is the metric published?  I think one of the key issues here is frequency.  These days, a lot of processes can be measured and reported on daily, hourly, or even real-time basis.  But, is it needed that frequently?  Can the information be processed and acted on that quickly?  If not, we may just be wasting resources.  A weekly reading may be sufficient and more appropriate.  In fact, more frequent reporting may inaccurately imply that the frequency of reaction or response is much higher than it realistically can be.

• How?  How will this metric be reported?  What format?  Will it be sent out as a table of numbers in a spreadsheet?  Will it be shown in a graph of a PowerPoint report?  Will it be reported dynamically in a dashboard, as a graph, or a dial?  Will it be reported as a standalone number/level?  Will it be an index or the percentage change from the last time it was reported?  Will it be compared to a benchmark?  If so, how is the benchmark defined?  Is it an external industry-specific benchmark?  Or an internal company-specific benchmark?  Will it be compared to a particular goal?

These days it is so easy to add more and more metrics to our daily existence.  Every time a new one crosses our desks, it is tempting to latch on to it, add it to a spreadsheet, and forward it on to someone else in our group (particularly if it makes us look good!).  But, at the rate of change and growth of these new technologies and new metrics, I think we need to be more discriminating about the metrics we utilize.  If we consider the questions above, before adopting new metrics, I believe that we will adopt fewer metrics, but concentrate on the most actionable and important ones.  As a result, we will be able to control the flow of information, so that we can learn from it, without getting overwhelmed by all of the data that is available. 

Posted by Trina Arnett at 12:58 PM | Permalink | Comments (0) | TrackBacks (0)

It’s a new year!  Are you ready?  Given the results released by the CMO Council in their second annual Marketing Outlook Survey on Monday (1/14), it’s time to hit the ground running!  This fascinating survey of 825 marketing executives from around the world covers companies of all sizes, industries, and customer targets (B2B, B2C and hybrids). 

The results provide insight on the usual suspects (If you are interested in more details, you can download the Executive Summary for free.):

• Expected changes in marketing expenditures (They’re not going up a lot, but they’re also not going down, thankfully!)
• Agency turn-over reasons and rates
• Marketers’ biggest sources of aggravation
• Trusted sources of information and insight

However, in addition, the results indicate that we are seeing real traction in the area of marketing sciences (research, analytics, and measurement):

• Looking back at 2007, marketers reported that one of the top achievements was focusing heavily on using customer data and analytics to provide better targeting and effectiveness.

• Looking to 2008, more than half say their top challenge is quantifying and measuring the value of marketing programs and investments.  Marketers are keen on improving the accountability of the marketing organization and plan to implement marketing ROI and/or resource allocation capabilities, in order to achieve that goal.  In fact, 34% of these marketers are planning to introduce a formal ROI tracking system. 

But, I was shocked by the stats that drive those achievements and challenges:

• Almost 55% of these companies do not track or measure their marketing expenditures in any way or have almost no way to connect their marketing efforts to actual business results.
• Only 7% conduct the rigorous analyses needed to document the actual impact of marketing on revenue and profit.

Continue reading "What’s your marketing outlook for 2008?" »

Posted by Trina Arnett at 01:23 PM | Permalink | Comments (0) | TrackBacks (0)

Is everybody doing it?  Is it the NEXT big thing?  Or was it the LAST big thing?  I do know this... most companies that I talk to are either trying to do it, or they really want to do it.  But, there are very few that seem to leverage it successfully.

For those who aren't doing it, or who are struggling, it may seem that the reason is due to lack of appropriate data.  Well, sometimes that is the case but in most cases that I've come across, it's really not about lack of data.  It's a political thing.

Lots of people find it threatening: 

• Individuals, within a client company, who have budgets (like advertising, DM, PR, sales, other promotion, etc.) may like the idea of it, in theory.  But, when it comes down to it, they are afraid…afraid that it will mean that they lose some of their budget.

• The client's vendors (ad agency, DM agency, PR agency, media-buying agency, etc.) are also afraid of it, as it may translate into less revenue for them.

• And from the agency side, initially, most media planners/buyers, whom I have ever worked with, find it threatening too.  They feel like I am telling them how to do their job, or casting doubt on their abilities to effectively plan/buy media for our clients.

So, because of the fear, it becomes difficult to get the data.  Groups within a company, who may own the data, may put up roadblocks, which will slow down, or even prevent, data collection.  These roadblocks can get even worse when it comes to collecting data from other vendors, like the ad agency, the media agency, etc.

So, how do we get around it? 

Continue reading "Marketing/Media Mix Modeling - Bad Cop or Not?" »

Posted by Trina Arnett at 06:48 AM | Permalink | Comments (0)

Technology marketers have historically spent a lot of their budget on events – without really knowing if they’re a productive sales and marketing activity.

It needn’t be that way. By developing an event measurement strategy and plan, technology marketers can better understand event ROI and make an informed decision on which events are profitable and which are not.

Our measurement approach collects data and analyzes event performance across three dimensions:

• Perception Metrics - focus on the range of functional, emotional and latent connections that combine to form an opinion of your brand resulting from the event.
• Performance Metrics - help to assess how the various brand building and demand generation activities of the event have combined to drive overall business results.
• Financial Metrics - represent the economic impact on the business of the event investment.

We then develop a turnkey measurement program plan aimed at guiding continuous improvement of events. This includes:

• Content - which content were attendees most interested in and why?
• Campaigns - what communications efforts aimed at driving qualified traffic and mining that traffic worked and what didn’t?
• Commerce - how many qualified opportunities that resulted in measurable economic value resulted from the event investment?

We can measure these by individual event and in total. The following is our recommended set of metrics for optimizing the performance of your event investments:

Continue reading "The Show Must Go On. Are You Sure?" »

Posted by Ken Dec at 10:30 AM | Permalink | Comments (0) | TrackBacks (0)

This from the 4/17/07 WSJ: There is “relentless pressure on agencies and chief marketing officers to drive revenue. It’s killing our business. It destabilizes the relationship between agencies and clients,” says Matt Weiss, an executive vice president and chief growth officer at Interpublic’s McCann Worldgroup.

If advertising agencies and their CMO clients want to have a seat/influence in the boardroom they have to demonstrate revenue impact. It’s no more complicated than that. Agencies and their clients aren’t doing a good job of this and that is why the lifespan of a CMO is decreasing and why “Ad Age” recently reported that a significant percentage of the client community doesn’t believe their agencies are demonstrating their value conclusively.

There is raging debate about the relative values of traditional and online media, and little agreement about measurement standards. Measuring the size of the audience has always been the backbone of traditional media measurement. As Internet media properties were struggling to create ad models, they went in a similar direction – offering audience scale measurements of page views and impressions, etc.

Along the way, the traditional intercept/interrupt advertising practice went through a change as audiences learned how to edit out these unwelcome intrusions. “Search” put the consumer firmly in control forever. The push world of advertising was going to have to make an accommodation for the increasing “pull” dynamics.

Continue reading "Stand Up and Be Measured" »

Posted by Tom Simons at 08:50 AM | Permalink | Comments (0) | TrackBacks (0)

As more and more “traditional” brands seek greater ROI for their broadcast investments, they are turning to the DRTV format (short format and long, infomercial format) as a way to both drive demand and build their brand.

If you're considering doing so, or just appreciate a reminder of how to ensure your DRTV spots are successful, here is a top 10 list of key success factors to keep in mind when developing, producing and placing DRTV campaigns:

1. Understand your target - Use a profile of your best customers to drive your targeting and messaging strategy.
2. Strong offers (incentives to respond NOW) are crucial - Next to the accuracy of reaching your target, having a unique, relevant and compelling offer is critical.
3. Be sure to employ multiple, consistent response options - Make it easy for people to call, click or visit. Consistent placement of response types throughout the spot, from beginning to end will ensure optimized response.
4. Demonstrations work - The more people can “experience” offering benefits the better.
5. Long spots work better than short ones - Because you can provide greater demonstration of the product/service and longer spots allow for multiple calls to action.
6. Better with a brand umbrella - So you can focus on traffic building - DRTV spots that are supported by separate, brand building efforts will perform far better than trying to drive demand and build the brand in the same spot – you’ll tend to do neither as well as you might.
7. Cable and syndication stronger than network - The data here are overwhelming. You’ll generate lower CPAs due to lower CPMs and there is simply a boatload of evidence that shows that cable and syndication placements have generated better historical response rates.
8. Leverage the power of versioning - Track message and media effectiveness with unique phone numbers. Vanity URLs don’t work though (too bad)…ask people where and when they saw a spot if you drive them to the Web.
9. Make the experience seamless - From viewing the spot to responding to the offer to making a purchase…make it smooth throughout the brand experience.
10. Don’t over complicate the testing - Just because you can measure a bazillion things doesn’t mean you should.

Follow these ten tenets and you’ll be well on your way to developing high performing DRTV campaigns.

Posted by Ken Dec at 03:09 PM | Permalink | Comments (0) | TrackBacks (0)

Call me “geeky” (I’ve been called worse, today in fact) but I think a book published last year by Wharton School Publishing entitled Marketing Metrics: 50+ Metrics Every Executive Should Master by Paul W. Farris, Neil T. Bendle, Phillip E. Pfeifer, and David J. Reibstein should be required reading by anyone calling themselves a marketer.

This book does a superb job distilling all the chatter about marketing measurement into understandable and, even more importantly, “actionable” guidance for marketers from the neophyte to the analytic type.

It strikes an excellent balance between what I’d call “finance light” – its heavier accounting and finance than many marketers have dealt are – but its past time we got better at this, with marketing decision-making guidance based on the results of those financial measurements.

Its textbook in nature (what would you expect, its from Wharton!) so its not a cover-to-cover read but something you can refer to again and again.

Here’s how I’d approach using it. I’d start by reading these chapters:

Measuring share: hearts, minds, and markets
Probing the hidden dynamics behind “market share”

Understanding profitability better than ever before
Accurately quantifying the profitability of products, customers, channels, and more

Advertising and promotion metrics, in detail
From promotional lift and price waterfalls to the latest Web metrics

Linking marketing to enterprise financial metrics
Understanding your true return on marketing investment–and enhancing it

Then take what you’ve learned and apply it! You can refer to other sections as you might need them.

There is much rhetoric out there about measurement…this book is a great guide that can help move beyond the rhetoric to real application of actionable measurement of your marketing programs.

Posted by Ken Dec at 12:57 PM | Permalink | Comments (0) | TrackBacks (0)

Fascinating article in the March 2nd edition of The New York Times that featured an interview with John Fleming, Chief Merchandising Officer and Stephen Quinn, the new Chief Marketing Officer at Wal-Mart that detailed the retailer’s new strategy to segment its 200 million customers into three segments that would drive its strategy:

• Brand Aspirationals – People with low incomes who are obsessed with brand names

• Price-sensitive Affluents – Wealthier shoppers who love deals

• Value-price Shoppers – People who like low prices and can’t afford much more

If Wal-Mart has finally seen the segmentation light, recognizing that growth is driven by focus, what are you waiting for?

A proven approach to segmentation is SegmentBrandingTM , an approach we use to combine behavioral segmentation with attitudinal segmentation along with predictive modeling that helps clients develop actionable segments that allow them to predict, with high levels of confidence, which segments should be invested in and at what levels to drive measurable, targeted ROI.

Here’s a simplified version of how Segment BrandingTM works:

Behavioral Segmentation – Perform a deep dive on your customer transaction data to segment customers on what they’ve actually done…what purchases they’ve made with you. Organize customers into segments of current value.

Predictive Modeling – Develop models that help predict what future value (revenue and profits) you can realize from each segment.

Attitudinal – Qualitatively understand the “why of buy” – to learn why your customers do business with you, and why do they do business with your competitors. Use your brand tracking study and other qualitative techniques (ethnography, cultural assessments, etc.) to segment customers into attitudinal groups.

By combining these behavioral, attitudinal and predictive analysis, you can exercise “differential investment” strategies – investing the right resources against the right segments in the right way at the right time and voila! ROI!

A word to the wise here. Segments must be actionable – so keep the number of segments small, five or fewer is advisable. Remember, even Wal-Mart, with 200 million customers is focused on three.

If the world’s largest “mass merchant” chooses segmentation strategy to drive its growth strategy, so can you.

So what are you waiting for?

Posted by Ken Dec at 03:54 PM | Permalink | Comments (0) | TrackBacks (0)

Over the past two days, a group of us attended Edward Tufte's workshop on "Presenting Data and Information." For those of you who are not acquainted, Tufte (Professor Emeritus at Yale University) is the brightest light in the art (design) and science (cognitive study) of presenting all forms of data. He has authored a handful of remarkable books, each of which would be of interest to anyone working in this information-intense environment.

A bunch of our art directors/designers went to the workshop, as well as Steve Lynch and Trina Arnett our newly minted Director of Research and Measurement. And we all left with new perspectives, refreshing arguments on presentation integrity, and a boatload of insights that we will be incorporating into our work product.

Tufte runs numerous workshops all over the country. I can't recommend them highly enough. Hit one. Here's more information: http://www.edwardtufte.com/tufte/courses

Posted by Tom Simons at 11:00 AM | Permalink | Comments (0) | TrackBacks (0)

Gotcha! You swore I was going to say begin at the beginning didn’t you? But when it comes to implementingactionable measurement strategies you want to begin at the end.

You want to quantify, as best as possible, what the desired, targeted outcomes, of any marketing campaign or program are and then build your strategy, plan and infrastructure to enable measuring those outcomes.

What are some examples of measurable outcomes? Depends on the specific marketing application. But we recommend placing measurable outcomes into one of three categories of marketing strategy: Demand generation, Loyalty and Understanding. Every marketing expenditure, and therefore every measurement, should focus on measuring how effectively you are achieving these three objectives.

Continue reading "Beginning at the End" »

Posted by Ken Dec at 12:20 PM | Permalink | Comments (0) | TrackBacks (0)