ANA Total Accountability

8/14/2019 ANA Total Accountability

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Published in cooperation with

2006 ANA Marketing Accountability

Task Force Findings

Total Accountability: Before

and Beyond the Dashboard


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2007 All Intellectual Property Rights Reserved


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Table o Contents

Total Accountability: Beore and Beyond the Dashboard 2Introduction 22006 Marketing Accountability Purpose and Approach 3Key Findings 4

Denition and Components o a Process 7What is a process? 7

The First Step: Understanding the Target Customer 8The Voice o the Customer Using The VOC To Find The Emotional Link Between Brand And Customer 2

The Second Step: Having an Explicit Plan to Build Brand Equity 3Example o an Equity Building Imperative 5

The Third Step: Setting and Prioritizing Objectives 7The Fourth Step: Developing an Integrated Marketing Strategy 20Beyond the Dashboard 23An Analytical Framework o Who, What and How - The Key to Accountability 26Appendix 33Appendix I: 2005 ANA Marketing Accountability Task Force Catalog o Metrics 34

Innovation 35Dierentiation 37Customer Centricity 38Marketing Eciency 40Trial Generation 42Lead Generation 43

Awareness 44Advertising Copy 45Margin Enhancement 47Brand Equity 48Purchase Behavior 50Marketing Human Resources 5Public Relations 53

Appendix II - 2005 Marketing Accountability Process 55Appendix III - Integration-IMC Model 56Appendix IV - 2006 ANA/MMA Marketing Accountability Survey Results 58


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Total Accountability: Beore and Beyond the Dashboard

Everyone wants marketing to be accountable

Responding to that desire in 2005, the ANA

commissioned a task orce o 20 leading

companies rom diverse industries These

twenty companies were asked to share the

best current practices that had helped them

become more accountable and to identiy

their challenges in becoming truly accountable

marketing organizations

The 2005 ANA Marketing Accountability

Task Force report, written or the ANA by

our consultants on the project, the EMM

Group, asked some basic questions about

accountability The Task Force members

concluded that marketers need to think

about being accountable or more than a

short term revenue objective or even or

a higher marketing return on investment

Rather, marketers should be accountable orbuilding long term brand equity, the single

most valuable asset o most companies

Additionally, we discussed the need or

marketers to learn more about the target

consumer whose needs are the wellspring o

all protability

The 2005 report provided many practical

tools to acilitate accountability Specically, it

created the marketing maturity model to help

marketers understand where they stood versus

their peers in our critical areas: data, analytics

and metrics, corporate culture and process

(See page 24 o this report) Respondents to the

report helped develop a process map to guide

marketers step by step towards accountability

within even the most siloed o companies

The 2005 ANA Marketing Accountability Task

Force members identied emerging new tools,data and analytical protocols that were helping

them bring accountability to marketing Lastly,

rom the task orce participants, we assembled

a catalog o metrics to help marketers select

those that were applicable to a diverse universe

o industries (See Appendix I)

But everyone who participated in last years

task orce believed this work was but the start

o a journey not a destination That has

certainly proven to be the case! Everythingwe learned in 2006 shows marketers are

making progress across the board; yet, we

have seen continuing pain points, barriers and

rustrations How to overcome them will be the

ocus o this 2006 report

Introduction


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The purpose o the 2006 marketing

accountability study is to continue the journey

towards Total Accountability

We did this by changing our approach

slightly rom the 2005 Report Specically,

we broadened our universe o ANA member

contributors substantially beyond the specic

members o the original Task Force

We also broadened our scope to include

new sources o data One o the most

important was the third annual ANA

Marketing Accountability Survey, conducted

in conjunction with Marketing Management

Analytics (MMA) This survey added valuable

numerical data to our perspective acquired

through numerous personal interviews o

members The survey data conrmed much

o what we heard in individual interviewsand provided a clearer context In this

way, the Survey data enhanced our overall

understanding o accountability

In addition, the Task Force reached out

or more input at the 2006 ANA Marketing

Accountability orum as well as at a CMO

2006 Marketing Accountability Purpose and Approach

roundtable at the 2006 Masters o Marketing

Annual Conerence in Orlando Lastly, the

subject o accountability was raised at

numerous regional meetings which aorded

many members their rst opportunity to

comment on accountability directly to ANA

Marketing Accountability Task Force members

Lastly, on behal o the Task Force, the EMMGroup with the assistance o MMA interviewed

marketers throughout 2006 Both EMM Group

and MMA listened to the challenges and

successes ANA members experienced in their

continuing eorts to be more accountable

On behal o the Task Force, we would like to

thank all o those ANA members who took the

time to share their experiences We would

also like to extend a special thanks to the EMM

Group and to Gordon Wade, who once againguided the ANA Marketing Accountability

Task Force with his tireless energy, wit and

dedication and passion about this important

topic


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A key challenge conrmed by the 2006 ANA/

MMA Marketing Accountability Survey is that

marketing accountability is still too oten an

activity trapped within the silo o the marketing

unction itsel More than 60% o companies

in the study reported no cross unctional

involvement whatsoever in developing

marketing accountability Where this occurs,

everyone reports continuing rustration ingaining credibility rom the balance o the

corporate unctions who are excluded (or

exclude themselves) rom participation in

validating marketings accountability

Conversely, the most encouraging sign is the

slow but perceptible involvement o multiple

unctions in a marketing accountability

process within companies Particularly notable

are the involvement o the procurement and

especially the nance unctions in manycompanies Looking behind the numbers

rom the 2006 ANA/MMA survey, we learned

that over 35% o companies had some kind

o cross unctional marketing accountability

team (in most cases including nance) In

responding to another question, nearly 30%

claimed ull cooperation between marketing

and nance in establishing return on

marketing investment metrics

One marketer serving on a team with aFinance member observed that the two

disciplines were teaching one another their

respective languages At one o the 2006

ANA orums, a procurement participant on

a company accountability team said we are

Key Findings

inventing a common language so we can

educate management In several cases,

nance and procurement participants pointed

out that because they came rom unctions

that are measurement and metrics oriented,

it was easy or them to bring that unctionally

required approach to a discussion o marketing

accountability

At this writing, we sense that marketing and

nance, two unctions that have been at

swords point or years, have realized that their

individual success depends upon collaboration

Where this is happening, and it is happening at

many, many companies, the real winners are

the shareholders

The involvement o rigorous metrics oriented

unctions is proving particularly valuable

in business to business (B2B) companieswhere capturing meaningul data or having

available data be accepted as meaningul

by management has historically proven

to be a challenge But at B2B companies

such as Intel and IBM, support unctions on

accountability teams have been particularly

helpul in one case, assisting marketers in

gaining adoption o a brand equity measure as

a valid accountability metric, and in another,

developing metrics or tying marketing to

specic lead generation activities and the salesresulting rom those leads

Unortunately, all the news isnt positive Data

availability or condence in available data

continues to be a real challenge In the 2006


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ANA/MMA Marketing Accountability survey,ewer than 5% o respondents were highly

satised with the accuracy o syndicated data,

the timely availability o data or the alignment

between disparate data sources

Even one o the most visible successes o

the accountability initiative, the development

o the Marketing dashboard, has some

discouraging aspects because some seem to

eel that the very existence o a dashboard

makes marketing accountable This is not thecase as various research data conrm

We need to be clear about this The creation

o dashboards with the right metrics tied to a

causal model is a tremendous breakthrough

Nearly 6% o companies report having a

dashboard and another 9% are in the midst

o roll out Numerous companies report

having specic marketing related metrics

on the corporate dashboard reviewed by top

management and in some cases the Boardo Directors But in many cases, the ocus

on getting numbers on the screen has not

materially helped address the real challenge

that occurs long beore and continues long

ater the nano-second when a new number

is displayed within a color graph The 2006

ANA/MMA Marketing Accountability survey

oers some sobering data in this regard:

Only 0% o respondents elt very satised

that they could change establishedstrategies and programs i ROI measures

showed them to be ineective

Only 4% o respondents elt very satised

that they could act quickly in response to

ROI data to improve results quickly

Only 3% elt very satised they couldimprove the quality o the companys

planning process

One ANA member captured the problem

elegantly At one o the Forums she said, Weve

got to use metrics and the dashboard or more

than measurement Weve got to use them or

management

The real challenge in the period beore the

dashboard gets populated is the developmento a marketing process that can repeatedly

produce excellent marketing results in the

same way a tightly managed manuacturing

process produces excellent quality products

time ater time An excellent dashboard

number this quarter is little more than a

pleasant delusion i no process exists to

produce an even better number in this quarter

next year Yet, ew i any companies have

a bullet proo marketing process All have

a marketing planning calendar, many havemandated activities, some even have required

inputs to specied ormats, but none o these

is a process For too many marketers, process

remains an unamiliar and potentially a

threatening concept

I ew companies have a process to develop a

better dashboard number next quarter, even

ewer have a process or analytical protocol or

discovering why a given dashboard number

ailed to measure up to expectations Theailure o marketers to apply some sort o

causal model to explain ailures in perormance

is a phenomenon which our interviews suggest

is pervasive Thus, in this white paper we will

provide some approaches marketers can take

to overcome this


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With these ndings clearly in mind, weconcluded that what marketing needs

is not just a pretty dashboard but Total

Accountability dened as: a process or

planning a better result and a protocol or

analyzing what went wrong when the planning

ails to deliver up to expectations

And so, rather than ocus on the dashboard

in this paper, we shall ocus on the process

needs beore the dashboard and the analytical

needs beyond the dashboard


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Many marketers believe they have a process

but it is important to understand what a real

process is A process is NOT a schedule A

process is NOT a ew required templates and

it certainly is NOT merely a series o internal

workshops

A process is a series o steps arranged in a

specied order with required inputs, outputsand metrics designed to produce a desired

repeatable result Grandmas recipe or a

chocolate cake is a process It has inputs

(ingredients) mixed together in a mandated

order (steps) with specied activities and

metrics (stir or about 3 minutes until it

thickens) to produce an intermediate output

(the batter) to which you apply the nal step

(bake or 30 minutes at 350 degrees) with

the much anticipated nal result being an

absolutely delicious cake time ater time(Please see the appendix or an example o the

marketing accountability process presented in

last years marketing accountability report)

The marketing process is somewhat more

complex and demanding than Grandmas

recipe This is partly because marketers

have competitors who are trying to thwart

a successul outcome and also because

marketers need to produce not one result but

three

Specically, marketers need to:

make this years mandated contribution to

corporate prot

build brand equity while achieving the prot

goal and

learn more about the target consumer

become more insightul

I true accountability comprises delivering

these three results, then one must ask,

What is marketings equivalent to Grandmas

recipe? What are the identiable process steps

beore the dashboard? We asked marketers

about those steps which they associated with

generating repeatable excellent results They

identied our steps which occur annually or

iteratively as marketers plan activities which

drive the dashboard numbers:

Understanding the target customer

Having an explicit plan to build brand equity

Setting and prioritizing objectives

Creating an integrated marketing strategy

These are not the only steps comprising a

marketing process, but these are the steps

where most marketers are sadly decient

These are the steps we want to address in this

paper

2

3

4

What is a process?

Denition and Components o a Process


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The First Step: Understanding the Target Customer

The marketing process begins with the

consumer/customer It is ashionable today or

executives to talk about becoming customer

ocused This raises an interesting question

Where has the company been ocused beore

i not on the customer?

The late Peter Drucker, as usual, got it

right The purpose o business is to makea customer The only way that can occur is

to understand the customer and ocus on

meeting that customers needs including the

oten elusive emotional needs

I your company is ailing to build eective

plans or i those plans are ailing to deliver

against expectations, the rst place to look is

back at your understanding o the customer

The 2006 ANA Marketing Accountability TaskForce members told us that understanding the

customer quite oten requires understanding

segmentation because segmentation enables

the development o a sharper ocus on

customer needs

Virtually all respondents segment their markets

in one o three ways:

Demographically- age , household income,

education, amily size

Attitudinally/psycho graphically- liestyle,

belies, sel perceptions

Behaviorally- purchase habits, hobbies,

viewing habits, shopping locale

Philip Kotler mentions ve criteria or an

eective segmentation:

Measurable: One must be able to

determine the values o the variables

used or segmentation This is especially

important or demographic and geographic

variables

Relevant: The size and prot potential o a

market segment have to be large enough to

justiy separate marketing activities or this

segment

Accessible: The segment has to be

accessible or the organization in terms o

distribution and communication channels

Distinguishable: The market segments

have to be suciently diverse to respond

dierently to dierent marketing mixes so

that the brand can draw advantage rom

that

Durable: The segments should be relatively

stable over time to minimize costs o

requent changes

Merely identiying the segment you are

targeting is not sucient to attain total

accountability You must understand the

worth o the customer - that is the dollar

value o product or services which thatconsumer/customer buys annually or over a

lietime o purchases In our 2005 Marketing

Accountability Task Force white paper we

talked about this metric as lietime customer

value (LCV) This is not to suggest that


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one should always target customers o thehighest annual worth or lietime value On

the contrary, huge ortunes have been made

by targeting consumers o modest or average

worth (eg Dollar General and Wal*Mart)

Regardless, you must know the worth o the

customer to market responsibly

I you do not know the worth o the customer,

you cannot eectively develop an economically

rational trial/ conversion marketing model (ie

how many marketing dollars can I protablyspend to attract or convert this customer?)

Trial/ conversion models vary dramatically

rom segment to segment, rom industry

to industry One thing is certain; you cant

build an accountability model i you dont

know the worth o the target customer The

2006 ANA/MMA Marketing Accountability

Survey revealed a startling act Only 4%

o companies responding indicated that

understanding the value o the customer

was important to the senior executiveso the company One might suggest that

i the C-suite wants marketing to be more

accountable they should encourage marketing

to understand customer value

For many industries, understanding the wortho the customer means understanding the

lietime value o a customer, the total value o

goods and services a customer may purchase

across all the need states your company may

oer to meet or that customers multiple

needs In categories such as consumer

nancial services, the combined value o the

prot available rom credit cards, home loans,

insurance and the customers investment

portolio can be a remarkably large amount It

is that tantalizing sum total which has driventhe continuing consolidating acquisitions

among nancial services rms to create the

heralded nancial services supermarket

Some o the more sophisticated marketers

rom the 2006 ANA Marketing Accountability

Task Force told us they combine the concepts

o segmentation, customer worth and market

penetration to calculate matrices o prot

pools which identiy those market segments

where the company has already attained sucha high share that the remaining unrealized

prot pool is small Total accountability means

understanding which segments oer the

greatest unrealized prot potential


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In the table below, the segments oer widely varying sizes, rates o consumption and total availablegross margin translating into signicantly dierent total segment margin Once the company adjusts

or its share o total segment margin, Segments #3 and #5 have the largest available prot pools or

the company

Prot Pool Schematic example

Customer segments 1 2 3 4 5 6

# customers 00 K 50K 200K 50K 200K 200K

$ consumption/capita $00 $75 $25 $200 $250 $250

Total Sales ($Millions) $0 $25 $250 $300 $500 $250

Proft Margin % 40% 30% 50% 50% 40% 30%

Segment margin ($Ms) $40 $375 $25 $50 $200 $75

Company Market share 5% 20% 20% 60% 30% 30%

Available proft pool ($Ms) $38 $30 $00 $60 $40 $225


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The Voice o the Customer

One clear indicator o how well a marketing

department understands its target customer is

the existence o a broadly shared Voice o the

Consumer/Customer The VOC concept is not

new having been brought to the US as part o

the Japanese inspired Total Quality movement

Unortunately, many marketing organizations

dont take the time to develop a robust VOC

Many companies simply summarize a ewdemographic acts and label this eort a Voice

o the Customer The accountable organization

assembles a VOC ollowing a who, what, when,

where and why taxonomy Then they seek to

understand the target customer in exceptional

depth Some even create a touch point map

to identiy where the customer touches the

companys products and services, where

company personnel touch the customer and

what the nature o the contact is

The totally accountable company shares its

VOC with all critical internal unctional groups

or the purpose o aligning them around an

understanding o the target customer The

best orum or attaining alignment is a tightly

scripted multi unctional meeting in which each

unction is asked to respond to our questions

about each o the key areas o the VOC:

Is this act/ conclusion about the customer

correct rom your unctional perspective?

Is it a signicant issue that you must

address?

What action should be taken based on this

aspect o the VOC?

What does this aspect suggest that you

dont know or need to know about the

target customer?

A multi-unctional team meeting around the

VOC can lead to productive actions across the

entire demand creation value stream It is also

a key contributor to the creation o a learning

plan which all totally accountable companies

should have

One o the primary outputs o a VOC or a touch

point map exercise is the identication o the

moment o truth or that aperture moment

when the product or service is most keenlyexperienced by the customer The accountable

marketer should be constantly searching or

that nano-second when the customer grants

permission to sell him something or tell

him something about the company and its

products A learning o this nature can drive

the development o a distinctive and eective

integrated marketing plan


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Using The VOC To Find The Emotional Link Between Brand And Customer

One o the major attributes distinguishing the

totally accountable company is its intense ocus

on understanding the emotional links between

the customers and their usage experience

with the companys product or service Some

companies acilitate understanding o that link by

creating a Voice o the Customer taxonomy which

includes concepts such as an ethnographic

depiction o a day in the lie o the consumer/customer These VOC taxonomy nodes exist to

orce researchers and marketers to understand

the context in which the product or service is

experienced Other concepts in the VOC such

as customer hopes and ears lit it above a

desiccated recital o perormance attributes into

the domain o emotional engagement where

buyer and brand bond in the inner sanctum o

the customer psyche

At the deepest level, this search or customerunderstanding is seeking an insight, one o

those rare eureka! shouting, orehead slapping

moments when marketers are handed the

combination to the customers saety deposit box

and an invitation to take what you can carry out

o the bank Marketers spend lots o time talking

about insights much as 9th century explorers

spoke about nding the source o the Nile Oten

marketers will reer to the dozens o Insights

they have about their brand or product category

when what they really have are not insights at all

but merely a series o nice to know acts or a

conclusion more useul to media planners

A true insight is a proound understanding o

customer behavior which can create competitive

advantage Its when Gillette realized thatwomen eel that body hair is uneminine and that

removing that hair can reveal the (very eminine)

goddess within An insight is Lipitors realization

that active, t people do not comprehend they

can have dangerously high cholesterol which

they need to have checked and treated It is

Budweisers intuition that beer is more about

male bonding than about taste And, Michelins

understanding that the choice o a tire is a way

o honoring the terminal value o protecting the

saety o ones children

The totally accountable marketer can always

explain how each piece o communication with

the target customer is connected to the critical

(and oten emotional) insight about the customer

The insight becomes the silver thread knitting

together all consumer / customer interaction


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The Second Step: Having an Explicit Plan to Build Brand Equity

Marketers in the totally accountable company

have three responsibilities:

Delivering the volume and prot numbers

in the annual budget

Learning more about the target customer

Building brand equity

The latter responsibility is important or two

reasons Brand equity is money in the bank

A review o the total market place value

(capitalization) o any publicly held company

will reveal that most o the value o the

company is traceable to brand equity or the

belie that the companys hold on the minds,

hearts and pocketbooks o its customers will

continue into the uture

A host o studies have been conducteddemonstrating the correlation between

brand equity and the marketplace value o

the company These studies document how

brand value contributes to various nancial

actors such as the ability to sustain higher

margins, lower the cost o introducing new

products, make cash fows more predictable

etc One study, by the economic consultants

Stern Stewart, is particularly noteworthy They

correlated market perormance, as measured

by their Economic Value Added (EVA) concept,with brand equity undamentals, as measured

by Y&Rs Brand Asset Valuator (BAV) brand

equity measurement tool This study which

covered numerous companies and industry

types demonstrated that companies with

strong Brand Equity measures in the areas o

dierentiation and relevance dramatically

outperormed those with weaker measures in

these areas, as measured by changes in EVA

The second reason totally accountable

marketers should ocus on building brand

equity is this: our work with the 2006ANA Marketing Accountability Task Force

demonstrated that in most companies no

one else explicitly owns brand equity Unless

the marketing leadership steps orward to

claim this extraordinarily important asset o

the company, one o the critical enablers o

corporate growth will languish or worse still be

dissipated by a series o harmul short term

actions

Despite the critical importance o buildingbrand equity, data suggests that it is being

neglected by numerous companies The 2006

ANA/MMA marketing accountability survey

helps explain why It revealed that 40 % o

respondent companies dont track changes

in the nancial value o brand equity and only

5% were very satised in their understanding

o how marketing eects the marketplace

value o brand equity Furthermore, interviews

conducted with ANA members indicate that

ew companies have any explicit process orplan or building brand equity

This is unacceptable Few would tolerate any

other major corporate unctions not having

a process or plan or delivering repeated


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excellence in the area or which it is primarilyresponsible Imagine a ood manuacturer or a

restaurant without a process to guarantee ood

saety across the product delivery stream Yet,

we see ew marketers who have a documented

repeatable process or building brand equity

Those ew who do have processes and plans

create what some call a Long range equity

action plan (LEAP) These are documents

which extend across a longer time horizon

(three to ve years) and contain specicstrategic objectives (some times called

imperatives) the purpose o which is to drive

specic customer attitudinal or behavioral

metrics behind which all the unctions o

the company are aligned Some o these

imperatives may be under the direct control

o the marketing unction such as advertising

positioning or targeting a particular group

o consumers who may have weak attitudes

towards the brand

In many cases, however, the imperativeidentied or improvement may NOT be under

the direct control o the marketing unction

These imperatives may involve a product

or service improvement internally owned by

manuacturing, by store operations, by R&D,

by packaging, by sales or even by nance In

these instances, marketings power lies in its

understanding o the customer and its ability to

link the specied non-marketing improvement

with an improvement in customer attitudes that

drives one o the critical contributors to brandequity enhancement

The point is this: until companies recognize

that they need a long term plan to improve

brand equity in the same way that companies

have long term plans or acilities expansion

or product cost improvement, the company

cannot be and will not be totally accountable


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Detailed below is a ctitious example

o an equity building imperative rom

pharmaceuticals, specically rom the

rheumatoid arthritis disease state In this

example, the marketer uses a contribution

to preerence actor analysis protocol to

measure its equity We do not advocate any

specic research protocol or becoming totally

accountable only that marketers measureequity with a protocol utilizing analytics which

acilitate understanding brand equity based on

emotional and unctional attributes

In this approach, customers (physicians)

are asked why they preer Brand A to

brand B Their responses are grouped into

related actors and mathematical analysis

is perormed to ascertain which actors

drive preerence and by how much This

type o protocol is used in dozens o diverseverticals Its utility is denitely not limited to

pharmaceuticals

In the ollowing example, Brand A the pioneer

in this treatment category is preerred over

a new drug Brand B which has only been

available or about 6 months Despite the

recent introduction o Brand B, the overall

preerence or Brand A is relatively small (65

vs 58) and brand B has certain advantages

primarily driven by its ease o administration

The key to identiying the imperative that could

build Brand As equity lay in the dynamics

behind the equity scores in two important

respects The rst was the dierent delivery

mode o the two drugs Brand A is delivered by

inusion which requires a visit to a hospital or

physicians oce every 6 to 8 weeks and a two

hour stay while the drug is administered Brand

B, the newer medicine, is sel injected at home

by the patient every 2 weeks and takes less

than ve minutes to administer

Example o an Equity Building Imperative

Rheumatoid Arthritis Brand Equity Score Card

Country: United States

Source: US RA Brand Equity Surveys: (Q06)

Brand Positioning or Brand A:

For RA suerers, only Brand A oersunsurpassed pain reduction while addressingpatient concerns over saety o administration.

Contribution to

Preerence

All: Q1 2006

Desired Brand Equity AttributesBrand

ObjectiveBrand A Brand B

Overall >5% 65 58

Pain Reduction/Efcacy > 5% 34 28

works or everyone 20 23

gives long-lasting relie

works rapidly ater treatment 3 -

relieves pain in all joints - 4

Ease o Use Parity 24 43

provided as outpatient 8 -

sel administered - 40

encourages compliance 2 3

requires training/preparation 4 -

Saety in Use >10% 25 12

side eects 3 2

blood pressure/ainting concerns

20 0

bleeding 2 -

Availability/Payment Issues Parity 6 10

Eect on Physician/

Patient Relationship>5 10 7


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Brand As marketing personnel had doneextensive mining o the brand equity data and

knew that among those doctors who valued

brand A or its high patient compliance and or

saety in use, brand As share o prescriptions

was signicantly higher In act they could

predict with mathematical accuracy the

increase in market share and sales volume

associated with an increase in their ownership

o these two actors in the mind o doctors

The answer to changing attitudes and alteringbehavior lay in understanding the

Moment o Truth when the prescription

decision was made and in understanding

the rational and emotional motivations o

the patients and physicians The patients

were generally older oten with multiple

co-morbidities ranging rom osteoporosis

to serious digestive maladies They were

generally ignorant o their treatment

alternatives and were eager to receive and

willing to accept advice rom their physiciansFor their parts, physicians would in most cases

present treatment options to the patient and

guide that patient towards a decision based

on their own experience and evaluation o the

patient

The marketers had learned two other

critical pieces o data hinted at in the Brand

equity data Physicians and patients were

convinced the Brand A was saer because

it was administered in a medical setting byproessionals Second, the doctors were

convinced that compliance (adherence to a

rigorous schedule o dosage) would be better

with Brand A because patients would not

inject themselves regularly, and in some casesnot at all This non compliance would ultimately

cause the patient to suer and elicit rustration

or the physician as the patients health

deteriorated

Mathematical analysis o Brand Equity attitudes

indicated that emphasizing the saety o the

medically administered Brand A would drive

an overall avorable attitude (equity) among

physicians, especially rheumatologists who

were the physician segment with the highestannual prescribing value As a result, the

marketers would emphasize that physicians

should re-assure patients (eg I have never

had a serious emergency rom this drug) at

the moment when the patient was choosing

between Brand A (administered in a medically

supervised setting) and Brand B (sel injected

at home by an already ragile patient)

Understanding the structure o the brand

equity Contribution to Preerence model gavethe marketers condence that increasing the

score on these two actors would increase

overall preerence

Accountable marketers can use their

knowledge o the target customer to identiy

attitudes that drive enhancements in brand

equity They can build these attitudinal targets

into brand equity improvement plans and

use them to create value propositions or

advertising development In this way, a longterm equity action plan gets linked to this

years marketing plan and todays advertising

execution


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The Third Step: Setting and Prioritizing Objectives

The annual marketing plan is best

understood as a series o objectives which

when added together comprise the annual

goal Accountability implies two things:

measurement and an objective The totally

accountable marketer should try to associate

every expenditure with a specic objective,

and measure whether or not the expenditure

attained the objective

Interviews with ANA members indicate that

some marketers are striving to do this The

characteristics o those marketers are as

ollows:

Aggressive collaboration between the

nance and marketing unctions

Using net present value as a metric to

prioritize various marketing initiativesPlanning vertically by initiative rather

than horizontally by channel or type o

expenditure

Lets expand upon these characteristics

First, the aggressive collaboration between

nance and marketing is critical O all the

developments caused by the demand or

marketing accountability, none has been more

necessary and more surprisingly successul

than the growing, productive collaborationbetween the marketing and nance unctions

The two unctions have always worked

together, but their working relationship

has, in some circumstances, tended to be

more that o wayward driver and trac cop or

ailing student and demanding teacher Some

marketers may have viewed their nance

colleagues as adversaries bent on driving

down costs and expenditures by constantly

looking or opportunities to reduce marketing

budgets For their part, nance may have

seen marketing as the one unction with no

discipline, no accountability, and scant proothat the expenditure was productive or even

necessary

The twin and sometimes competing objectives

o sales growth and ecient expenditure o

unds has pushed marketers and nance

together Marketing is a logical driver o sales

growth and nance is a logical arbiter o

expenditure eciency In many companies,

the two unctions have come to appreciate that

their ortunes are interdependent Each hasrecognized that one might be able to help the

other achieve common objectives and so the

unction o Marketing Finance has become

less o a punitive score keeping unction

ocused on cost control and more o a resource

that could help marketers understand the

implications o certain expenditure choices

In many companies, the nance unction is

helping marketing develop nancial models

rom which marketers can begin understandingthe implications o expenditures beore

they commit dollars These simple models

oten start with concepts such as reach and

requency o a marketing initiative They can be


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applied to expenditure options as diverse asredesigning sales orce call patterns to internet

campaigns They ask basic questions such

as: How many customers will it reach? How

many times? What is a reasonable assumption

regarding trial and conversion per 000

customers reached? Etc

From simple models such as these, which

almost every company can develop without

exotic math, the nance unction can develop

calculations o the net present value o amarketing initiative This approach allows

marketing management to look across the

panorama o multiple marketing initiatives

on one brand or a portolio o brands and

prioritize expenditures based on the net

present value o N initiatives Net present

value or NPV has certain advantages versus

ROI in that it is an eectiveness measure with

eciency components built in whereas ROI

is strictly an eciency measure Companies

such as Procter & Gamble which are ocusedon growth rather than raw eciency tend to

avor the use o NPV over ROI

Some cynics oten point out that the best

way to increase marketing ROI is to spend

no money and simply milk the ranchise,

withdrawing priceless reputation rom the

brands equity bank until theres nothing let

Proponents o using NPV point out that it

ocuses on growth and on cash while having

the added value o orcing marketers to ocusvaluable human capital (marketers time) on

projects which generate the most cash longterm

The use o NPV in the planning phase o the

marketing demand creation process has the

added advantage o creating a target and a

baseline or evaluating the eort This in turn

encourages (some would say demands) ater

action analysis and thereby starts a virtuous

circle o plan, do, analyze, improve, and then

plan again

This brings us to the last characteristic

o the objectives setting area and that is

planning vertically by initiative as opposed

to horizontally by channel or expenditure line

item (television, direct mail, internet, etc)

This is an extremely important concept or

many reasons, but one o the most important

is that it aligns target customer, and brand

equity enhancement with the expenditure

o marketing unds Planning vertically also

means planning by initiative rst then planningby channel (network television, direct mail,

creating a web site, developing a new product

sales drive, etc) Planning vertically requires

the marketer to ask a simple question: What

specically am I trying to accomplish with this

eort and what is the best way to accomplish

it In other words, it starts with an objective

tied to an initiative or project instead o starting

with the commitment o dollars to a marketing

channel with no equity building or sales

building metrics


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The schematic table below suggests how planning vertically, using NPV can help make marketingmore accountable Each initiative is clearly identied Each has a specic target audience, specic

eort assigned to it and specic NPV estimated by the marketing/nance team

In the chart above,the term Equity actor

target reers to the desired or estimated eect

that the dollars expended behind the initiative

will have on a specied component o the

brands attitude among the target audience ie

this eort will have asignicant (+++) positive

impact on actor A

The NPV (net present value) estimate is a

nancial estimate o the current value o theanticipated prot stream generated by the

expenditure among the target audience or

the initiative The NPV concept calculates

cash generated over time giving more value to

that cash generated quickly and less to that

generated two and three years out Conversely,

the net present value approach subtracts

the cost o the eort rom the prot stream

and does so placing a higher value on dollars

expended soon than those spent later All

uture cash whether incoming or outgoing is

discounted by a common actor agreed to

by the companys nance department NPV

is primarily an eectiveness measure with an

eciency component built in For example,

two initiatives could have an identical ROI but

vastly dierent NPVs because one projecteects millions o consumers and generates

lots o cash while the second initiative is small

and eects only a ew thousand customers,

perhaps in a limited geographic area Both are

equally ecient (have the same ROI) but the

larger initaive is much more eective (has a

higher NPV)

Initiative

(Target customer)

Initiative #1

(Customer

Group A)

Initiative #2

(Customer

Group B)

Initiative #3

(New

customers)

Initiative #4

(Retail Buyers)

Initiative #5

(In-store

Personnel)

Expenditure Type ( $ Mil)

Spot TV ,200

Direct mail 250

POS material 80

Web site 00

Trade show 250

Direct Mailed pricereduction oer

750

Training programand sales incentive

300

Production cost 50 50 50 30 30

Total cost 350 480 900 280 330

Equity actor target (eect) Factor A (+++) Factor B (++) Factor C(+) N/A N/A

NPV 424 300 250 88 50


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The Fourth Step: Developing an Integrated Marketing Strategy

Dramatic changes in the way customers seek

and process inormation have undermined the

traditional methods o communicating with

customers and persuading them Marketing

practitioners in all verticals agree that the old

marketing model is dead

Developing a new marketing model is a daunting

challenge and that has been complicated bythe explosion in marketing choices spawned

by digital technology As i the sheer number o

choices were not enough, recent studies strongly

suggest that the same customer varies her

choice o inormation channels depending upon

the product or service category For example, a

customer who depends primarily upon websites

or detailed inormation about automobiles and

pharmaceuticals may depend heavily upon

magazine advertising or ashion and cosmetic

inormation Thereore, in a rapidly changingtechnological and cultural environment, every

vertical and every initiative requires resh

thinking It is marketing as digital kaleidoscope,

ever shiting, ever changing 24/7

The marketing industry has begun rallying

around the concept o integrated marketing

strategies (the simultaneous use o multiple

mutually re-enorcing channels and activities

behind one marketing initiative) as the answer

to the decline o the old media, the riseo new media and the hectic time starved

decision cycles o todays customer However,

our interviews indicate that only a ew in the

marketing community have devised a rational

dependable process to help them develop more

sophisticated multiple component integrated

marketing plans

One thing is certain, in a marketing situation

where choice and change are the rule not the

exception; marketers must have a process to

bring order rom chaos

The totally accountable marketer starts

developing an integrated strategy by asking two

undamental questions:

Who is my target?

What is my objective?

The answers to these two questions ocus

thinking and most importantly narrow the choices

or the integrated campaign

For example, i the target is non users and the

objective is new trial, the appropriate choices or

the integrated campaign are quite dierent rom

those wherein the target is a loyal user or whom

the objective is increasing product usage or

repeat purchase

The next questions driving integrated campaign

development are:

What are current behaviors o the target

customer?

What are the current attitudes o the

target customer?

2

2


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All marketing is about changing or reinorcingattitudes, and then changing or reinorcing

behaviors Until one understands the current

attitudes and behaviors o the target customer,

it is dicult to select a campaign component

which can change these behaviors

These questions drive the marketer back

to the Voice o the Customer which should

capture current attitudes and behaviors Some

o the unconventional nodes in the VOC (ie

questions such as What are the customershopes and ears? and What is the day in

the lie o the Customer? can be surprisingly

helpul in understanding attitudes and

behaviors)

Gaining internal alignment across multiple

unctions about current attitudes and

behaviors can sometimes be a daunting task

because dierent unctions (R&D, market

research, sales, store operations, the help

desk, etc) oten have dramatically dierentnotions about these undamental issues

Thats why drawing upon a multiunctional

group to validate the VOC is imperative

Thats why gaining multi-unctional input on

integrated marketing campaign development

is highly desirable

Once the totally accountable marketer

understands current attitudes and behaviors,

he can ask What are the desired attitudes and

behaviors? What is it I want the customer tothink or eel? What is it I want the customer/

buyer/ store personnel, order clerk to do?

Moving through this cadence o questions

regarding current and desired attitudes,

current and desired behaviors may seem

mechanical and obvious but the accountablemarketer realizes it is part o sorting though

a complex maze o marketing choices The

answers to the questions help to narrow the

range o choices In act, some reer to the

process as short listing media or promotional

alternatives

Beore proceeding to choose the desired

combination o marketing alternatives, however,

a ew other questions should be asked: What

are the barriers to achieving the desiredbehavior? Are these barriers emotional, non-

rational barriers? Are they rational barriers?

(Eg the biggest barrier to trial is that my

product isnt in distribution where the target

consumer shops) The answer to these

questions can play a critical role in urther

narrowing the appropriate choices or an

integrated campaign

A useul guide in that narrowing process is

yet another question: What is the specicmarketing task I am asking this campaign to

perorm? Is it to get the customer to include my

brand among a consideration set or a vacation

choice? Is it to drive a patient to a doctor or

a specic medical procedure? Or i I am a

marketing a chemical to an manuacturer in a

B2B environment, is it persuading an internal

product developer at the customer to speciy

my molecule or a new product ormulation?

At this point the marketer is ready to returnto the VOC where the company should have

captured historical responses to the how

question (ie How do customers respond to

marketing expenditures?) In this sector o the

VOC, various quantitative and qualitative data


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regarding the eciency and eectiveness ovarious channel alternatives are captured

Over the past decade and especially over the

past ve years, enormous progress has been

made in understanding how various marketing

alternatives engage with customers to convey

a message or sell product

In some verticals such as consumer packaged

goods in which time series purchase data is

available, market mix modeling has yielded

sophisticated response curves mappingsales response to the marginal expenditure

o marketing dollars in a dazzling array

o combinations At its highest stage o

development, this approach enables marketers

to de-compose expenditures by channel and

then create optimization scenarios combining

expenditure options in an almost innite

number o channel/dollar combinations

Despite the promise o this extraordinary

capability, only 7 % o respondents in the

2006 ANA/MMA Marketing Accountabilitysurvey claimed to be very satised with their

ability to understand the sales impact o every

element o the marketing mix Only 6% were

very satised with their ability to estimate the

eect o alternate marketing plans

Everyone amiliar with this capability

recognizes its primary weakness It is

generated by analyzing historical data and

thereore cannot accurately predict precisely

how the same combination o expenditureswill perorm under a uture scenario where

the competitive situation will oten dier rom

the situation under which the response curves

were developed That having been said, thecapability to assemble multiple scenarios with

the help o experienced marketing oversight

is one o the two or three greatest advances

in the SCIENCE o marketing in the past 50

years Any vertical which has the time series

data to develop these multi-channel integrated

marketing optimization scenarios and is not

spending the money to understand their

power is almost assuredly not behaving in an

accountable manner

Unortunately, many verticals lack reliable time

series data to develop these scenarios but over

the last several years yet another new analytical

weapon has been developed to enhance the

creation o integrated campaigns This weapon

is oten called engagement measurement

This new measurement alternative like all

measurement alternatives has its pluses and

minuses This approach has two advantages

o remarkable value in building an integrated

marketing campaign First, is its capability toaddress virtually all marketing contact points

(channel options) in virtually all verticals in

virtually all countries at a relatively modest cost

Second, is its capability to rank order these

channels by their ability to engage dened

customers and infuence them to buy

This enables marketers to assemble multi

contact point integrated campaigns with

unprecedented levels o condence We

recommend that marketers test and experimentwith one or more o these new engagement

research methodologies


25/76

Over the past several years thanks to work in

academia, at research suppliers, in marketing

departments at companies, in the consulting

community and in organizations such as The

Marketing Science Institute, the Advertising

Research Foundation and the ANA, marketing

measurement and marketing accountability has

dramatically improved The clearest testimony

is the growth o various marketing measuresthat now appear on corporate dashboards in

literally hundreds o companies

The metrics maturity model developed in

the 2005 ANA Marketing Accountability

Task Force report gave companies a useul

guide to assessing where they stood on the

maturity curve (See below and Appendix

II) Its identication o the our critical

components o marketing accountability (data,

metrics and analytics, process and culture)

helped companies identiy a path towardsimprovement

LeadingEstablishedPracticingAware

Robust multi-functionalprocess integrated intoplanning

Metrics drive end-to-end marketing process

Recognized high levelownership

Stable , accepted ,mature metrics

Linked to planning

An appointed team Ad hoc process Annual review and

modification

Pockets of projects No tie to annual process

ProcessEmbedment

Woven into everyproject & plan

Understood, shared &lived

Seen as desiredcapability

Sophisticateddashboards encouragesharing

Metrics broadlyunderstood

Professional metricsleadership

A management mandate a multi-functional team

accepts responsibility Masses of measures

reported upward

Metrics a responsibilityof finance

Competing metrics byBU

Culture

Predictive & integrated Multiple tools, real-time

response Continuous

optimization capability

Some predictivesuccess factorsidentified

Stable techniques Metrics tied to strategy

Limited mix modeling Oriented towards

specific campaigns orexpenditures

No integration

Accounting-oriented Backward looking Inputs vs. outputs No framework Primitive analytics

Analytics &Metrics

Integrated Dataplatform acrosscustomers &expenditure types

Capable of rapid crossfunctional analysis

Broad spectrum timeseries data acrossgeographies, customers& functions

Some integration

Available in limited,important areas

Stable & consistent overtime

No integrated platform

Limited by type andfunction

Unreliable time series inchoate

Data

Metrics Maturity Model

Source: Model adapted from DoD Metrics Review, May 04

Most organizations are between Aware & Practicing

Beyond the Dashboard


26/76

From interviews with ANA marketingpractitioners, it became clear that

improvements have been made in the areas

o data, especially the availability o the new

engagement data developed by various

vendors, and organizational collaboration o

the marketing and nance unctions

Where marketers are still alling short

however is using the dashboard as a catalyst

to understanding necessary steps or

improvement. It is still a measurement tool,not a management tool.

Several actors appear to contribute to the

paralysis setting in ater the dashboard light

changes

Factor #1 - Neither marketers nor

management are spending enough

money on accountability and analytics

The 2006 ANA/MMA Marketing

Accountability Survey reported thatover 50% o companies responding had

no separate budget or accountability

or were unding those eorts out o

working marketing dollars The study

urther showed that nearly two thirds o

companies who provided an estimate

were spending less than 2% o the total

marketing budget or accountability and

analytics

Factor #2 - The metric chosen isntactionable; it is an input metric or

an intermediate metric with a vague

provenance leading to nowhere Far

too many metrics are lagging indicatorspresenting a perect rear view mirror

image o the crash behind you but no

orward looking line o site to what is

about to occur

Factor #3 - The metric chosen isnt

connected to the strategic responsibility

assigned to marketing within the

company Even though the metric says

something is wrong, no one accepts that

marketing has the power to improve themeasure especially the marketers

Factor #4 - No one demands an

understanding o why a number turned

south Everyone is working at such a

rantic pace that neither management nor

marketers eel they have the time to slog

into the swamp o data to understand

what went wrong and develop a plan to

x it

Factor #5 - Marketers have no causal

model, no generally agreed or, better

still, proven correlation linking a specic

metric to a sales result This goes back to

choosing metrics that are leading versus

lagging indicators, but it goes deeper

Marketers cannot produce a causal

model and identiy leading indicators

unless they have an analytical model and

actually employ the model until it yields

results

Simply stated, no dashboard will produce

accountability unless it is ed by a program


27/76

which is adequately unded, intelligentlydesigned and committed to analytics Based

on our discussions, our behaviors are

required i marketers are going to become

totally accountable

Accountable Behavior #1- Demand

analysis at the level o the individual

initiative, especially when a

recommendation is made or a major

initiative such as a new product

introduction or the penetration o a newtarget customer group

Accountable Behavior #2 - Express

that initiatives objective so that it

can be measured Identiy the major

assumptions that lead you to conclude

the eort is worth doing and make

them explicit (eg Im going to reach

this many customers with this many

messages and those customers are

going to change their behaviors asollows)

Accountable Behavior #3 -Create a

measurement plan Make explicit how

you are going to measure the success

o the initiative These should be linkedto the objectives and assumptions

mentioned above

Accountable Behavior #4 - Develop

a causal model that identies over the

longer term, which metrics are most

reliably predictive o marketplace

success

Accountable behavior #5 -Recognize

that you must spend money to makemoney Most aggressive accountability

programs backed by contemporary

analytics will produce dramatic returns

exceeding 0 to , even greater returns

during the introductory phases

These accountable behaviors can all be

enabled by developing an analytical ramework

Totally accountable companies have such a

ramework and use it to provide structure and

direction to their accountability eorts


28/76

An Analytical Framework o Who, What and How -

The Key to Accountability

Analysis isnt easy Oten analytics, whether

rom third parties (vendors) or rom a

corporate group, ocus on the result o the

expenditure (the ROI) They rarely i ever oer

insight as to why the ROI wasnt quite what

had been expected Truly valuable analysis

is ocused at the latter issue (why was the

ROI, the NPV or sales number what it was?)

Thats why one needs an analytical rameworkI one is unable to develop a homegrown

version there are rameworks oered by many

vendors including EMM Group (the author

o this report or the ANA), Integration-IMC

and others EMM Group and Integration-IMC

espouse that marketing organizations build

marketing metrics programs around a simple,

yet eective Who, What and How ramework

in order to become more accountable

The ramework itsel is easy to articulatebut it involves disassembling and then re-

assembling the component parts o marketing

The ramework asks or the answer to one all

encompassing question: Am I ocusing on the

correct target group with the right message

delivered by the right channel to achieve

my objective To arrive at the answer to that

question, however, requires the marketer

to slog through a number o permutations

and combinations o who, what and how

Fortunately, with multiple repetitions, thequestions get ewer and the answers get

clearer

Outlined below are examples about how to

establish and use the ramework

WHO

When a metric ails to meet expectations or

when you want to improve an already excellent

metric, you start by ocusing on the customer

Any given customer set can be segmented in a

myriad o ways but virtually all all along one o

three basic axes, demographics, behaviors and

attitudes

Demographics

Customer geographic location

Age / income / education / race / sex

Job title / unction

Socio-economic class

With/without a characteristic (type o

dwelling, disease, etc)

Size or type o customer (SIC code)

Behavior

Volume o purchases (heavy / medium /

light )

Frequency / recency

Type o purchase (order size, number o

items, categories purchased)

Loyalty (share o requirements)

Usage occasion

Purchase switching

Increase in annual consumption / purchase

Trade up to higher margin products or

services


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AttitudesNet promoter score (high / medium / low)

Preer X/Y/Z characteristic / unction

Need state / attitude actor

Reason or purchase

For example, i the brand were in the oral care

category, the who might be:

Total buyers

Large amilies (demographics)Household head < 30 (demographics)

Loyal buyers (behavior)

Consumer segment oering greatest prot

potential (behavior)

Purchase most oten in mass channel

(behavior)

Whiteness concerned (attitudes)

Gum concerned (attitudes)

Cavity concerned (attitudes)

Germ concerned (attitudes)

The metrics across these multiple Whos

might be:

Intent to purchase

Purchased last

Purchase exclusively

Will consider

Brand I have recommended

Most innovative brand

Best value

I the vertical were a service such as packagedelivery, the segments might be:

Total customers

International shippers

Frequent shippers

Primarily ground / air

Contract shippers

Non-contract shippers

Shipment size < 5lbs,5-20 lbs, 20 to 00

lbs, > 00 lbs

The metrics could be:

% increasing volume / % decreasing

volume

Ease o use

Pick up reliability

Delivery reliability

% prot margin per mile

Consideration set inclusion

Company I recommend to others

The intent is to nd the combination o

customer segment and metric which provides a

predictive insight into uture perormance and

thereby acilitates the development o action to

prevent the problem and improve results going

orward

WHAT

I a metric ails to improve or even declines,

then, ater investigating the target audience

issues, the analysis should ocus on what the


30/76

marketer is oering By What we mean thevalue proposition or benet you are oering to

customers

We recognize that what could logically include

issues outside the unctional responsibility

o marketing For example, in consumer

packaged goods the perormance attributes

o your product versus a competitive product

as experienced by the consumer In retail,

the what could be the in store environment

or the service quality in your outlet versus acompetitive outlet In a business to business

vertical, the what could be the price o the

product or a logistical capability issue versus a

key competitor These disparate characteristics

(product perormance, in store service, price or

logistics) are important components o the what

experienced by the customer and need to be

understood in detail However, as a general rule,

the marketing unction has limited short term

control over many o them Thereore, they need

to be reported separately and not as measures othe marketing unctions responsibility

Marketing is primarily responsible or conveying

the value proposition / benet to the customer

so marketing needs to measure the appeal o its

message

This paper does not presume to tell marketers

which measurement protocol to use Most

marketers have competent proessionals who

are amiliar with various vendors approachesto measuring the appeal o a benet Our

purpose is to lay out some broad principles and

concepts which leading marketers nd helpul in

understanding the appeal o the what

First and most important, make sure to ask theright target respondent This obvious caution is

actually somewhat dicult to achieve in many

B2B industries where the decision makers

and decision infuencers may be buried in the

customer organization or not readily accessible

to who ever is trying to generate a response

The success o customized internet panels that

acilitate responses rom normally inaccessible

executives is a tremendous boon to marketers

in various industries where marketers have long

depended on second hand or apocryphal dataregarding benet appeal

Second, look beyond a top line preerence

number measuring the overall preerence or

Brand A versus Brand B The whole purpose is

to isolate a specic benet or the one you are

basing your marketing appeal upon Marketers

should utilize a protocol with rich diagnostics

oering explanations or at least hypotheses or

why a specic number is what it is Some ANA

members employ the popular Net PromoterScore (NPS) approach as the primary metric or

measuring a brands equity They tell us that they

also utilize supporting diagnostics to help explain

why the NPS number ( 86, 75, etc) is what it is

and what needs to be done to improve it

Marketers should use protocols that help them

understand the relative appeals o various

benets especially among various target

audiences An example is the Contribution

to Preerence approach cited earlier in thisdiscussion By grouping responses (reasons or

preerence) under various similar actors, the

marketer gains valuable insight into why Benet

A is not moving overall preerence quite as

powerully as is Benet B


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Third, use a protocol that provides acompetitive context Knowing how you

measure in the absolute is certainly helpul

but most marketers compete in a multi brand

environment where your company may be

excellent at Benet X but a competitor may be

conveying that benet in a superlative ashion

One o the problems with the monomaniacal

ocus on Marketing ROI is that it provides

zero competitive context You may have a

satisactory number but it may be much

poorer than a direct competitors return in thesame channel The same logic argues or a

competitive context in measuring the what

Look or ways to express your benet in

terms o a dierence between you and your

competitors Try to establish a metric or

ownership o a benet in this competitive

context Ownership may mean a much higher

rating than a competitor on a 5 point scale

or it may mean being allocated more chips

in an chip allocation exercise Strive or asignicant and growing variance between you

and competition

Fourth, measure benet perormance and

customer comprehension with a consistent

protocol over time In many verticals, customer

reaction to benet positioning changes very

slowly Expecting a change in a ew months

just isnt realistic in most verticals under

normal circumstances especially when its

actual deliverance may depend primarilyon other corporate unctions (product

development, in store service, logistics,

pricing, etc)

Thats why some marketers understandablywant their perormance measured by actors

over which they have primary control (eg

ad copy scores, especially the persuasion

element) Some marketers argue that this is

the airest way to measure their contribution

because it removes all the actors (ie product

or service delivery, media weight, pricing and

distribution) which can and do aect customer

rankings in the marketplace yet are beyond the

direct control o the marketing unction

With these as principles or guidelines, here are

the kinds o metrics which you might consider

developing:

Relative importance o chosen benet

versus all other benets in the vertical in

the target audience (Benet A = 28%,

Benet B 22%, etc)

Change in the importance o that benet

(Benet A was + 5% now +9%)

Ownership o that benet as measured by

metrics such as:

Relative ranking dierence on a 5 point

scale on Benet #

Brand A ranked at 45, Brand B at

39 , 06

Relative ranking versus average on 00

point scale on Benet #2

Brand A + 0 points, Brand B

-5 pts, 5 points


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Share o mentions in category on Benet #3Brand A gets 28% o mentions; Brand

B gets 22, 6% points

Ratio o mentions versus share o market

on Benet #4

Share o mentions = 33 while market

share= 22; ratio = 33/22 = 50

Absolute score on Benet A in copy test

versus previous copy

Copy persuasion score

Copy point registration on:

Dierent

New

Likeability

Inormative, new inormation, learned

something new

HOW

Over the past decade, while conventional

marketing weapons have becomeprogressively less eective and less ecient,

the number o communications options

available to marketers has exploded Not only

have the number o options in conventional

communications vehicles such as television

dramatically increased with the ubiquitous

availability o multi-channel cable and satellite

operations, but completely new options such

as search engine driven internet marketing

have become extremely important

As conventional options have become less

and less ecient, marketers have turned

more requently to options such as events,

trade shows and even targeted special print

publications In many cases, o course,

marketers are assembling integrated marketingcampaigns which combine the unique

capabilities o various media to produce

an eective synergistic campaign These

integrated campaigns oten involve three or

our separate marketing vehicles in concert

with a targeted sales campaign and selling

message

The prolieration o marketing options and

especially integrated multi-vehicle campaigns

has driven management to ask marketers,Do we need to spend dollar X on vehicle Y

when we are already investing in three or our

other vehicles at the same time? Why cant

you just ocus on the one or two channels that

are the most eective? Why dont you know

how to spend the shareholders money more

eciently?

Larger advertisers with larger budgets have

been able to address the relative contribution

o individual components o these multi-component integrated campaigns using

market mix modeling and various multi-

variate analytical techniques But most

marketers cannot continuously employ these

sophisticated analytical techniques because

they are perceived to be too expensive

Additionally, many marketers eel these

techniques unairly penalize the marketing

unction because they include the eect o

many aspects o the user experience over

which marketing has little or no control (price,product or service perormance, logistics, etc)

Recently several suppliers have developed new

approaches to measuring the eectiveness o

the how component o the marketing equation

(Who should I target with what message and


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how should I deliver it?) These approachesdier in various ways Rather than discuss the

merits o one or the other, we shall use one

o the newer research approaches developed

by Integration - IMC to discuss the general

subject We recommend marketers review all

research protocols to choose the one that best

meets their unique need

The Integration - IMC approach ocuses on

helping marketers choose the most eective

marketing contacts to engage a customer Intheir parlance, a contact could be any one o

dozens o dierent marketing vehicles such as

television, print, a test drive o an automobile,

a closed circuit telecast in a physicians oce,

a neon sign at a sporting event, a trade show,

a website or in store POS material, etc) Their

principal measure is brand engagement

points and brand engagement share In

eect, they provide a one number reading o

how various contacts engage with customers

on a category by category and brand by brandbasis They DO NOT measure the eect o

a marketing option on brand sales only the

ability o a marketing option to engage the

customer This approach has the disadvantage

o not measuring ROI but it has the advantage

o avoiding most o the infuences or which

the marketer is not responsible (Pricing,

product perormance, etc) This approach

ocuses on decisions or which the marketercan be legitimately held accountable: the

choice o marketing vehicles (or channels in

their parlance) and the relative monies spent

on one contact type versus another

The research protocol o Integration - IMC and

similar approaches has been widely discussed

in the marketing research and academic

community and most have been subjected

to intense reviews and validation by ARF or

similar responsible sources Again, pleasebe aware that other vendors oer similar

approaches with varying advantages and

disadvantages in cost, comprehensiveness,

geographic and industry applicability, etc

For a quick summary o the Integration - IMC

approach see Appendix III

New research techniques provide marketers

with new inormation with which to develop

integrated campaigns These techniques also

enable marketers to measure the relative costo experience points or each o the contact

types they employ Such metrics provide

marketers with a new yardstick or evaluating

the eciency and eectiveness o new media

options which have proven hard to evaluate

using previously available methodologies


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Total Accountability = Total Credibility

The work by the ANA Marketing

Accountability Task Force over the past

ew years clearly indicates that marketers

are striving to increase marketings

credibility Progress has been made but

much work remains to be done

Admittedly, marketing IS harder to

measure than other corporate unctions

Building robust accountability processesand programs by starting with the best

practices outlined in this report, can

serve to overcome the skepticism o

CEOs -many o whom lack a marketing

background - about marketings eciency

and eectiveness

To the marketers we say simply, earn

a seat at the table by building a robust

accountability program The tools andprocesses are at your nger tips

To the CEOs rustrated with Marketings

accountability we say, mandate that

unds are set aside to make marketing

accountable You dont need to be

a marketing expert to enorce the 0

commandments o accountability shown to

the right

I you ollow these ten commandments,you will be well on your way to total

accountability

The ten commandments o

total accountability

Create a multi-unctional

internal accountability team

Agree on the expectations

that the management team

has or marketing

Choose metrics that align

with expectations

Select predominantly leading

indicator metrics capable o

driving a causal model

Create a robust VOC so

you understand the target

customer

Demand an explicit plan to

build brand equity

Develop measurableobjectives or 90% o

marketing expenditures

Use a rigorous process to

build integrated marketing

plans

Analyze 90 % o marketing

expenditures using a who,

what, how ramework

Create an accountability

budget sucient tomeasure 90% o marketing

expenditures

2

3

4

5

6

7

8

9

0


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Appendix


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Appendix I(Catalogue o Metrics rom the 2005 ANA Marketing Accountability Task Force Findings)

The work o the 2005 ANA Marketing

Accountability task orce was twoold: ()

to review current best practices used by

ANA member companies to improve their

marketing accountability; and (2) to provide

a practical catalog o accountability metrics

used by industry practitioners rom which

marketers may choose those appropriate to

their unique situation This need relates directlyto one o the task orces principles o best

practice - identiying managements strategic

expectations o marketing and developing

metrics to express progress or lack thereo in

the targeted responsibility

Current best practice suggests that metrics

refect the strategic intent which a companys

management has or its marketing unction

I management expects marketing to build

brand equity then measure that I deliveringsales prospects is important, measure that I

increasing the lietime value o customers is

important, measure that With this principle in

mind, the appendix that ollows groups metrics

by strategic intent

Every company and every vertical is dierent

Thats why the appendix includes several

metrics under each strategic intent These

unique metrics represent dierent ways

which study participants responded to their

managements request or accountability about

a specic strategic intent they attribute to the

marketing unction

The appendix provides a method o calculation,

likely data sources and the types o verticals

or which this metric may be appropriate We

do not claim this list is exhaustive We expect,

indeed we hope that this starter list will inspire

users to develop dierent but more appropriate

metrics or their company

This appendix represents but a beginning We

welcome comments, questions and additions

rom every marketer


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InnovationDefnition/Calculation

Source odata

Calculation ortechnique

Verticals whereappropriate Problems or concerns

$ sales Sum o sales oproducts/services/retail locations < 3yrs old

InternalCompanysales

Simple additionResults comparedto previous year

Virtually universal Simple, broadly applicable,practical measure

% o $sales rominnovation

Sum o sales oproducts/services/retail locations 2 yearsIdentiy # advancedin grade Calculate% advancement

Broadly appropri-ate or virtually allverticals

Must be used aspart o batteryo balancedscorecard metricsCompared toindustry norms etc

Turnover A balanced score-card includingturnover amongemployees< 2years, amongemployees ranked

superior, amongmiddle manage-ment tier

Internalcompanyrecords

Identiy separatedemployees placewithin measuredgroup, derive %Compare over time

Broadly appropri-ate or virtually allverticals

Needs to beplaced inperspective overtical andtracked over timeRationale behind

turnover needed


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Public Relations

The somewhat ephemeral nature o the publicrelations unction has led to a renzy o metricsdevelopment Several highly competent industrygroups have developed approaches worthy o studyAs one o our study participants pointed out, theirony o all these eorts to justiy public relations isthat everyone intuitively agrees about the power andcredibility o an artul PR campaign Nonetheless,

it remains challenging to disaggregate the eectso PR rom many other company activities Thisis especially true because many companies leanhardest upon PR to mitigate the negatives o someexternal untoward event The elonious attempt topoint the nger at Wendys is a classic example othe challenges o creating PR metrics The chartbelow oers some creative metrics shared with us

Public RelationsDefnition/Calculation Source o data

Calculation ortechnique

Verticals whereappropriate

Problems orconcerns

AVEs (advertisingvalue equivalent)

The conversion onon paid mediamentions intothe equivalent oadvertising grossrating points

Third party dataproviders

Capture o impres-sions by mediatype and then theirconversion into theequivalent o paidgross rating points

Many verticalsand productcategories

Dicult to ascertainquality o mention,context, messagedelivered or aect onmessage recipientA classic inputmeasure

Target StakeholderResponse

Attribute rankingamong selectedstakeholders(Industry thoughtleaders, media,shareholders, etc)

Brand trackertype survey

Survey researcho targetedstakeho

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