|The Bottom Line on Marketing Accountability
by Peter DeLegge
Marketing accountability continues to be
a hot topic. The reality is that there is a lot of talk, but not an
equivalent degree of action.
Consider a recent study by the CMO
Council that found less than 20% of top technology marketers surveyed had
developed “meaningful, comprehensive measures and metrics for their
marketing organizations.” The last major study on marketing ROI found that
68% of marketers were unable to determine the ROI of their initiatives.
While marketing accountability is a
priority, these studies send a clear message: We’re not there yet.
With all of the recent buzz over
marketing ROI, the truth is, it is not necessarily the most appropriate
metric for every marketing initiative. While determining marketing ROI is
ideal for large initiatives and initiatives where it can be easily
determined, such as direct mail or online marketing, it can be complex and
cost prohibitive process to accurately determine marketing ROI on small
offline branding campaigns. Don’t get me wrong, marketing ROI is the
ideal measure, but it can be costly to properly implement. The majority of
CFOs will agree and want to set thresholds for when marketing ROI is used as
a measure of effectiveness.
The real bottom line is that CMOs need
to sit down with CFOs to determine the appropriate marketing measures and
who is best suited to monitor these measures.
In 2002, I provided the keynote
presentation for IQPC’s “Measuring and Ensuring Return on Your Marketing
Investment” and recommended that CMOs work in cooperation with CFOs to
determine the appropriate marketing measures. Further, I suggested exploring
whether it may be most effective to have a member of the Finance department
take responsibility for managing and monitoring these metrics. A number of
consumer goods companies have successfully implemented such an approach. At
minimum, CMOs should explore this option.
A Marketing - Finance partnership is
beneficial on two levels. First, it helps create important CFO buy-in of
marketing measurements. Second, it can put responsibility for metrics in the
hands of the most qualified staff to handle metrics. Additionally, having
these measures monitored by a member of the Finance department can eliminate
the need to promote marketing successes to the finance department. It also
means an immediate awareness of failures, which is probably the part that
scares most marketers.
There is another reason. The divide
between Marketing and Finance is often the greatest between any two business
departments. I believe that the CMO must make forging a strong relationship
with the CFO a priority. Finance must be a partner in determining marketing
metrics. This buy-in is essential to marketing gaining the organizational
credibility it needs to reach its potential.
Peter DeLegge is the publisher of
Marketing Today. He has nearly twenty years experience in marketing and
advertising and has held marketing management positions at Fortune 200 and
medium size firms. To contact Mr. DeLegge regarding consulting, speaking
engagements or media interviews, please email <firstname.lastname@example.org>.
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