The report outlines a marketing performance measurement model and guidelines for process improvement.
Posted Oct 12, 2004
The CMO Council, a private organization comprising high-level marketing executives from dozens of technology firms, has released its Measures + Metrics: Assessing Marketing Value + Impact report, a 227-page tome underwritten by five marketing services companies that establishes a model for marketing performance management (MPM). While aimed primarily at the Council's core audience of tech companies, the model is designed to be flexible enough to employ in a variety of corporate settings.
"Marketing had an interesting five years, having passed through the bubble, the bust, and into a brave new world of accountability," says Bill Glazier, editor-in-chief of the report and a partner at Redwood Ventures.
The model and the report's recommendations are based on surveys of more than 1,000 executives in marketing and business leadership positions, most of which consistently decried their ability to generate reliable, actionable marketing insight. While roughly half have some sort of regular measurement system in place, only one in seven companies surveyed have an end-to-end model for tracking marketing performance from execution to chief executive acceptance.
"It's not because they don't want to. In our research we uncovered that 90 percent of CMOs we talked to felt that marketing performance management, a framework for the [measurement of] quantitative value of marketing in the organization, was a priority, but only twenty percent of companies got it right," he says. "Only 15 percent had taken the next step of building a model so they could express, in some common language, the contribution marketing activities had for the company. "
According to the report, successful MPM models center around clear definition and measurement of corporate success factors, measurement of marketing-driven outcomes, and measurement of "early warning signs" and other customer predictive indicators.
The report includes tables of dozens of potential metrics to include in an MPM analysis, but urges starting with fewer than 20, to prevent information overload and frustration among both marketing professionals and the cross-functional executives who will evaluate the results. The MPM scorecard should weight marketing's impact on demand, corporate vision, corporate identity, and product recognition. The report suggests a pragmatic baseline weighting of 50 percent for the demand component as important to secure buy-in from other divisions, but the model is flexible.
Glazier emphasizes that incorporating a full MPM model into a marketing organization is not an overnight process and should be deployed in stages. "Don't try to create an econometric model that models all of the moving parts in the organization. Begin with something simple. It's really vital that you think about where you want to be in eighteen to twenty-four months, because that's how long the process is going to take."
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