Apenny saved is a penny earned." When I worked at ad agencies, this was the mind-set we brought to brand planning. Who is the target audience? How finitely can we describe them? How can we maximize effective reach levels with different marketing and communications mix options?
It's also the mind-set we brought to media buying. Which tactics do we use to ensure we obtain the best prices? How do we improve our negotiation clout? How do we use proprietary measurement tools to improve our competitive advantage?
Clearly, the main objective over the past 30 years has been efficiency—stretching a client's budget as far as possible in a market beset by media fragmentation, audience erosion and cost inflation. And even as the media supply markets have consolidated, we've made significant strides in doing that.
The unspoken reality, however, is that any efficiency-based planning or buying model, no matter how sophisticated, is based on something less than the whole truth. Or, depending on your viewpoint, on half-truths.
That's because these models do not systematically incorporate an equally important issue—effectiveness. What results are the media, communications and brand plans producing? What are the sales uplift and ROI for the investments the agency has been entrusted with? How does that ROI compare with the client's other investment needs and opportunities?
At the end of the day, our clients are measured by effectiveness. Sales. Profitability. Return on net assets. Impact on shareholder value. CEOs either produce the numbers Wall Street wants or they're replaced by someone who can.
So what about the brand and communications planning folks? Or those responsible for media buying? How long will it take before their stewardship efforts are measured—and rewarded—the same way?
Perhaps most important, what responsibility will the marketing, advertising and media industries take in measuring effectiveness? Will we develop the standards and systems for determining effectiveness? Or will someone do it for us?
Despite what you may have read or heard, it is possible to measure the effectiveness of most marketing campaigns, particularly those that are channel- and sales-focused. In our experience, the eight keys to achieving reliable measurement are:
—Quantitatively measuring marketing ideas and programs before they are implemented, through trade-off analyses with customers and prospects
—Developing benchmarks, for both historical programs and competitive efforts, to understand the value new ideas are adding (or taking away) with customers
—Locating all of the sales and causal data (advertising, promotion, direct marketing, merchandising, etc.), which is often located at a number of internal and external sources
—Creating a relational database, and then developing customized effectiveness analyses, including sales performance, uplift and customer-intent metrics
—Developing a secure extranet, with information, metrics and reports customized by brand, business discipline (brand management, sales, retailer, etc.) and channel of distribution
—Analyzing the brand's marketing performance weekly, and ideally by product and sales outlet, with "early warning" and "emerging opportunity" signals
—Systematically calculating the performance of marketing programs and their execution to understand the effects each had on marketplace performance
—Developing an ongoing brand modeling and feedback system to create a cycle of continuous marketing-performance and effectiveness improvement. Think of this system as a demand chain productivity loop.
Marketing effectiveness can't be ignored. We know clients are asking tough metrics and accountability questions more often and with more urgency. And they're growing increasingly frustrated by their agencies and the marketing and ad agency associations, which have been "investigating" this issue for years.
All while published research from Accenture suggests that 68 percent of executives in the U.S. and U.K. can't measure the ROI of their marketing campaigns.
As stewards of our clients' brand investments, we have an obligation to tell the truth, the whole truth and nothing but the truth about their efficiency and effectiveness. Or we risk having our performance and accountability determined by management consulting firms like Accenture.