Last week saw me speaking at the 7th Annual Marketing Directors Conference in Athens. The topic for the day was marketing accountability. Creating my presentation caused me more frustration than it usually does, probably because accountability is so difficult to define.
Even so, it seems that everyone has an opinion on the topic. At the beginning of the day, our host Vasilis Theoharakis, Associate Professor of Marketing & Entrepreneurship at ALBA (a graduate business school in Greece), suggested that the word accountability was difficult to translate into Greek and offered his own interpretation. Unfortunately I never found out what his suggestion was, because the translator was too busy telling me that she disagreed with his proposal.
That marketing accountability is ill-defined was further highlighted by the diversity of opinions offered in the day’s presentations. The range is probably best illustrated by two quotes used during the day: “You cannot manage what you cannot measure” and “not everything that can be counted counts, and not everything that counts can be counted.”
Professor Tim Ambler, a senior research fellow at London Business School, was in the latter camp, proposing a return to marketing fundamentalism—that is, a belief in the value of the brand/customer relationship that can only be created by empathetic and energetic marketing. He dismissed the claims made on Accenture’s Web site, that they are able to measure the return on marketing investment, as “a whole heap of rubbish.” He proposed that instead of relying on processes, models, and magic numbers like the Net Promoter Score, we should convince accountants of the value of marketing (instead of trying to turn marketers into second-rate accountants).
This proposal echoes a question posed by my colleague Gordon Wyner a couple of years ago. He asked, “In their zeal to learn and speak the language of finance, have marketers trapped themselves in a game that, as currently defined, can’t be won? Trying to tie each dollar of marketing spend to immediate sales lift is often doomed before it is measured.”
In saying this, Gordon hits on the essential problem of marketing accountability. Brands are built over years, not weeks. Only a minority of the investment in marketing translates directly and immediately into sales. While marketing helps to justify the beliefs people have about brands (and it is those beliefs that give brands their value), the results may not be immediately apparent. Unless we take account of the mediating effect of what is already in people’s heads, we will never get a complete understanding of the return on marketing investment, and even then, we may not be able to tie back the overall influence of marketing to specific marketing and sales channels.
To my mind, the growing demand for transparency and accountability in marketing is completely at odds with the increasing fragmentation and complexity of the marketing world. This said, marketing must be productive and must offer credible measures of that productivity. But instead of trying to define productivity using existing metrics drawn from the balance sheet, we need to define productivity using metrics that actually relate to the ways in which brands are built.
Had I been in the audience in Athens last week looking for definitive advice, I might well have been disappointed by the variety of opinions and lack of any clear recommendations on how to justify my marketing spend. But I think David Haigh, the founder and CEO of Brand Finance plc., defined the essential problem when he outlined the need to develop brand-specific scorecards. Each brand, category and country is different. You must define how your marketing activities build your brand and what outcomes you expect as a result. You can then identify the metrics that best measure the impact of your marketing activities in achieving that objective, and then link them through to financial outcomes.
So what are your thoughts on this matter? What is your definition of marketing accountability? What do we need to measure and why? Please share your ideas
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November 16th, 2009 at 1:52 am
I think one need to start with the question: “Does Marketing WANT accountability versus do they NEED accountability?”.
Seems to me that when brands do well marketers want accountability, but since brands are mostly stable they often do not really want accountability.
If marketing needed accountability then it would have been there.
The point was made that marketers should not become the finance department - by Tim.
Maybe this raises the issue of reversing the question: Should the accountants not be asked to be accountable? Included in their accountability score should not be only how much cost they trimmed out of the brand, but how much they grew the brand by wise investmjents in marketing?
November 16th, 2009 at 7:54 am
I believe the subtext to the issue is that marketers feel in some way “inferior” to other functions within the organization. Accountability is/was the way to demonstrate that marketers added as much to the health of the organization as anyone else. Our path to accountability was through accounting type ROI measures. It gave marketers a sense of comfort to be able to point to metrics indicating short term gains (and in some rare cases long term gains as well).
But are we about to throw the baby out with the bathwater? Are we turning on “accountants” with savagery (Enron, AIG, Lehman – need we say more?) and reverting to the “softer” measures that determined our contributions over the last half of the twentieth century?
Pardon me while I climb up on the fence here: I think that we need both. ROI metrics for a sense of accomplishment, and softer measures to truly understand the nature of brand equity and consumer relationships with brands.
November 16th, 2009 at 11:27 am
I think claiming the long term value of branding is the equivalent of setting up a scenario where some accountability is replaced with the prospect of never being accountable. When you look at the overall influencing factors in anyone’s decision to purchase a product isn’t advertising one the weakest influencers? Personal experience, word of mouth, prior use, those features are key to engendering loyalty and trial. So if that holds true wouldn’t you imagine that short term sales is a good thing to shoot for? The more hands my ad campaign puts my product into the more I grow the pool of influencers that can drive a significant portion of future purchases. Doesn’t that make short term sales the tipping point for driving long term brand equity? And by that measure doesn’t evaluating the financial return in the short term provide an inidcator of future brand success?
November 16th, 2009 at 11:30 am
I have conducted some grounded theory research in this area in the context of “professionalization theory,” a very interesting area in the sociology of occupations. The fundamental proposition of professionalization theory is that there is an inherent “drive” among occupations to elevate their status (however lowly they may be at start). Tthe most important tool they use for this is the development of a “theoretical knowledge base.” This drive is fueled by clients’ need for certainty for the quality/reliability/validity of services they receive (i.e., so that they appear to “know what they are talking about”). Status and power emanates from this base, which is traditionally developed by university researchers and transmitted/applied/operationalized by consultants, applied researchers and journalists.
Marketing/advertising has launched a professionalization project very early on, to build this accountability, by setting up university programs in the US in the early 1900s, later through the use of market research/account planning and the adoption of ever more sophisticated statistical techniques starting in the 1960s. Unfortunately, there are some very strong reasons (philosophical, scientific, practical) why this accountability can only be partial and the professionalization desired only semi-achieved (if at all). At the same time, clients, let them be internal or external ones, demand certainty as much (if not more and more) as ever. This is the inevitable “professional paradox” of the marketing occupation, for which there are only local, ad-hoc, makeshift solutions (which I called ‘pseudoprofessionalization tactics’), not overarching, structural, global ones.
For more on these studies please see:
Nyilasy, Gergely, Peggy J. Kreshel and Leonard N. Reid (in press), “Agency Practitioners, Pseudo-Professionalization Tactics, and Advertising Professionalism,” Journal of Current Issues and Research in Advertising.
Nyilasy, Gergely, and Leonard N. Reid (2009), “Agency Practitioners’ Meta-theories of Advertising,” International Journal of Advertising, 28 (4), 639-668.
Nyilasy, Gergely, and Leonard N. Reid (2009), “Agency Practitioners’ Theories of How Advertising Works,” Journal of Advertising, 38 (Fall), 81-96.
Nyilasy, Gergely, and Leonard N. Reid (2007), “The Academician-Practitioner Gap in Advertising,” International Journal of Advertising, 26 (4), 425-445.
November 16th, 2009 at 12:37 pm
OK, now this is interesting. Thanks for the comments everyone.
Marc, of course short-term sales are worth shooting for but not every sale is an incremental sale due to some marketing action. Yes, product experience and WOM have a very strong role to play but part of advertising’s job is to shape those interactions. Like gravity, advertising may be a weak force but it does not mean that it has little influence.
I have bought 7 Audis in a row. I am sure I have been influenced by Audi’s offline and online communications as well as their product and dealer service plus WOM but how on earth are you going to assign a value to each contact when my behavior is so consistent? Next time around I may well buy a Subaru. The initial impetus toward that change was a print ad I saw five years ago but only now are the circumstances right for me to act on the information the ad conveyed. Marketing is about creating the potential for growth. To create the predisposition to try or to remain loyal.
Greg, interesting thesis and I would agree that the fundamental problem is that there are so many different views of marketing: fundamental growth driver vs inefficient sales tool, investment vs cost, behavioral vs attitudinal, etc.