2006 ANA Marketing Accountability

Task Force Findings

Total Accountability: Before

and Beyond the Dashboard

Published in cooperation with:

© 2007 All Intellectual Property Rights Reserved
Table of Contents
Total Accountability: Before and Beyond the Dashboard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2006 Marketing Accountability Purpose and Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Key Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Definition and Components of a Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
What is a process? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
The First Step: Understanding the Target Customer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
The Voice of the Customer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Using The VOC To Find The Emotional Link Between Brand And Customer . . . . . . . . . . . . 12
The Second Step: Having an Explicit Plan to Build Brand Equity . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Example of an Equity Building ‘Imperative’ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
The Third Step: Setting and Prioritizing Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
The Fourth Step: Developing an Integrated Marketing Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Beyond the Dashboard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
An Analytical Framework of Who, What and How - The Key to Accountability . . . . . . . . . . . . . . . . . 26
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Appendix I: 2005 ANA Marketing Accountability Task Force Catalog of Metrics . . . . . . . . . . . . . . . 34
Innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Differentiation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Customer Centricity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Marketing Efficiency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Trial Generation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Lead Generation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Awareness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Advertising Copy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Margin Enhancement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Brand Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Purchase Behavior . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Marketing Human Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Public Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Appendix II - 2005 Marketing Accountability Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Appendix III - Integration-IMC Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Appendix IV - 2006 ANA/MMA Marketing Accountability Survey Results . . . . . . . . . . . . . . . . . . . . 58


Total Accountability: Before and Beyond the Dashboard
Introduction
Everyone wants marketing to be ‘accountable.’
Responding to that desire in 2005, the ANA
commissioned a task force of 20 leading
companies from diverse industries. These
twenty companies were asked to share the
best current practices that had helped them
become more accountable and to identify
their challenges in becoming truly accountable
marketing organizations.
The 2005 ANA Marketing Accountability
Task Force report, written for 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 for more than a
short term revenue objective or even for
a higher marketing return on investment.
Rather, marketers should be accountable for
building long term brand equity, the single
most valuable asset of most companies.
Additionally, we discussed the need for
marketers to learn more about the target
consumer whose needs are the wellspring of
all profitability.
The 2005 report provided many practical
tools to facilitate accountability. Specifically, it
created the marketing ‘maturity model’ to help
marketers understand where they stood versus
their peers in four critical areas: data, analytics
and metrics, corporate culture and process.
(See page 24 of this report) Respondents to the
report helped develop a process map to guide
marketers step by step towards accountability
within even the most siloed of companies.
The 2005 ANA Marketing Accountability Task
Force members identified emerging new tools,
data and analytical protocols that were helping
them bring accountability to marketing. Lastly,
from the task force participants, we assembled
a catalog of metrics to help marketers select
those that were applicable to a diverse universe
of industries. (See Appendix I)
But everyone who participated in last year’s
task force believed this work was but the start
of a journey – not a destination. That has
certainly proven to be the case! Everything
we learned in 2006 shows marketers are
making progress across the board; yet, we
have seen continuing pain points, barriers and
frustrations. How to overcome them will be the
focus of this 2006 report

2006 Marketing Accountability Purpose and Approach
The purpose of the 2006 marketing
accountability study is to continue the journey
towards ‘Total Accountability’.
We did this by changing our approach
slightly from the 2005 Report. Specifically,
we broadened our universe of ANA member
contributors substantially beyond the specific
members of the original Task Force.
We also broadened our scope to include
new sources of data. One of 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 of
members. The survey data confirmed much
of what we heard in individual interviews
and provided a clearer context. In this
way, the Survey data enhanced our overall
understanding of accountability.
In addition, the Task Force reached out
for more input at the 2006 ANA Marketing
Accountability forum as well as at a CMO
roundtable at the 2006 Masters of Marketing
Annual Conference in Orlando. Lastly, the
subject of accountability was raised at
numerous regional meetings which afforded
many members their first opportunity to
comment on accountability directly to ANA
Marketing Accountability Task Force members.
Lastly, on behalf of the Task Force, the EMM
Group with the assistance of MMA interviewed
marketers throughout 2006. Both EMM Group
and MMA listened to the challenges and
successes ANA members experienced in their
continuing efforts to be more accountable.
On behalf of the Task Force, we would like to
thank all of 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 again
guided the ANA Marketing Accountability
Task Force with his tireless energy, wit and
dedication and passion about this important
topic.

Key Findings
A key challenge confirmed by the 2006 ANA/
MMA Marketing Accountability Survey is that
marketing accountability is still too often an
activity trapped within the silo of the marketing
function itself. More than 60% of companies
in the study reported no cross functional
involvement whatsoever in developing
marketing accountability. Where this occurs,
everyone reports continuing frustration in
gaining credibility from the balance of the
corporate functions who are excluded (or
exclude themselves) from participation in
validating marketing’s accountability.
Conversely, the most encouraging sign is the
slow but perceptible involvement of multiple
functions in a marketing accountability
process within companies. Particularly notable
are the involvement of the procurement and
especially the finance functions in many
companies. Looking behind the numbers
from the 2006 ANA/MMA survey, we learned
that over 35% of companies had some kind
of ‘cross functional’ marketing accountability
team (in most cases including finance). In
responding to another question, nearly 30%
claimed ‘full cooperation between marketing
and finance in establishing return on
marketing investment metrics.’
One marketer serving on a team with a
Finance member observed that the two
disciplines were ‘teaching one another’ their
respective languages. At one of the 2006
ANA forums, a procurement participant on
a company accountability team said ‘we are
inventing a common language so we can
educate management’. In several cases,
finance and procurement participants pointed
out that because they came from functions
that are measurement and metrics oriented,
it was easy for them to bring that functionally
required approach to a discussion of marketing
accountability.
At this writing, we sense that marketing and
finance, two functions that have been at
swords point for 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 of rigorous metrics oriented
functions is proving particularly valuable
in business to business (B2B) companies
where capturing meaningful data or having
available data be accepted as meaningful
by management has historically proven
to be a challenge. But at B2B companies
such as Intel and IBM, support functions on
accountability teams have been particularly
helpful — in one case, assisting marketers in
gaining adoption of a brand equity measure as
a valid accountability metric, and in another,
developing metrics for tying marketing to
specific lead generation activities and the sales
resulting from those leads.
Unfortunately, all the news isn’t positive. Data
availability or confidence in available data
continues to be a real challenge. In the 2006

ANA/MMA Marketing Accountability survey,
fewer than 5% of respondents were ‘highly
satisfied’ with the accuracy of syndicated data,
the timely availability of data or the alignment
between disparate data sources.
Even one of the most visible successes of
the accountability initiative, the development
of the Marketing dashboard, has some
discouraging aspects because some seem to
feel that the very existence of a dashboard
makes marketing accountable. This is not the
case as various research data confirm.
We need to be clear about this. The creation
of dashboards with the right metrics tied to a
causal model is a tremendous breakthrough.
Nearly 16% of companies report having a
dashboard and another 9% are in the midst
of roll out. Numerous companies report
having specific marketing related metrics
on the corporate dashboard reviewed by top
management and in some cases the Board
of Directors. But in many cases, the focus
on getting numbers on the screen has not
materially helped address the real challenge
that occurs long before and continues long
after the nano-second when a new number
is displayed within a color graph. The 2006
ANA/MMA Marketing Accountability survey
offers some sobering data in this regard:
• Only 10% of respondents felt very satisfied
that they could change established
strategies and programs if ROI measures
showed them to be ineffective.
• Only 4% of respondents felt very satisfied
that they could act quickly in response to
ROI data to improve results quickly.
• Only 3% felt very satisfied they could
improve the quality of the company’s
planning process.
One ANA member captured the problem
elegantly. At one of the Forums she said, ‘We’ve
got to use metrics and the dashboard for more
than measurement. We’ve got to use them for
management.’
The real challenge in the period before the
dashboard gets populated is the development
of a marketing process that can repeatedly
produce excellent marketing results in the
same way a tightly managed manufacturing
process produces excellent quality products
time after time. An excellent dashboard
number this quarter is little more than a
pleasant delusion if no process exists to
produce an even better number in this quarter
next year. Yet, few if any companies have
a bullet proof marketing process. All have
a marketing planning calendar, many have
mandated activities, some even have required
inputs to specified formats, but none of these
is a process. For too many marketers, process
remains an unfamiliar and potentially a
threatening concept.
If few companies have a process to develop a
better dashboard number next quarter, even
fewer have a process or analytical protocol for
discovering why a given dashboard number
failed to measure up to expectations. The
failure of marketers to apply some sort of
causal model to explain failures in performance
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.

With these findings clearly in mind, we
concluded that what marketing needs
is not just a pretty dashboard but Total
Accountability defined as: a process for
planning a better result and a protocol for
analyzing what went wrong when the planning
fails to deliver up to expectations.

And so, rather than focus on the dashboard

in this paper, we shall focus on the process
needs before the dashboard and the analytical
needs beyond the dashboard.


Definition and Components of a Process
What is a process?
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 few required templates and
it certainly is NOT merely a series of internal
workshops.
A process is a series of steps arranged in a
specified order with required inputs, outputs
and metrics designed to produce a desired
repeatable result. Grandma’s recipe for a
chocolate cake is a process. It has inputs
(ingredients) mixed together in a mandated
order (steps) with specified activities and
metrics (“stir for about 3 minutes until it
thickens”) to produce an intermediate output
(the batter) to which you apply the final step
(bake for 30 minutes at 350 degrees) with
the much anticipated final result being an
absolutely delicious cake time after time.
(Please see the appendix for an example of the
marketing accountability process presented in
last year’s marketing accountability report.)
The marketing process is somewhat more
complex and demanding than Grandma’s
recipe. This is partly because marketers
have competitors who are trying to thwart
a successful outcome and also because
marketers need to produce not one result but
three.
Specifically, marketers need to:
• make this year’s mandated contribution to
corporate profit
• build brand equity while achieving the profit
goal and
• learn more about the target consumer…
become more insightful
If true accountability comprises delivering
these three results, then one must ask,
“What is marketing’s equivalent to Grandma’s
recipe? What are the identifiable process steps
‘before’ the dashboard?” We asked marketers
about those steps which they associated with
generating repeatable excellent results. They
identified four steps which occur annually or
iteratively as marketers plan activities which
drive the dashboard numbers:
 . Understanding the target customer
2 . Having an explicit plan to build brand equity
3 . Setting and prioritizing objectives
4 . 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 deficient.
These are the steps we want to address in this
paper.

The First Step: Understanding the Target Customer
The marketing process begins with the
consumer/customer. It is fashionable today for
executives to talk about ‘becoming customer
focused.’ This raises an interesting question…
“Where has the company been focused before
if not on the customer?”
The late Peter Drucker, as usual, got it
right. ‘The purpose of business is to make
a customer.’ The only way that can occur is
to understand the customer and focus on
meeting that customer’s needs including the
often elusive emotional needs.
If your company is failing to build effective
plans or if those plans are failing to deliver
against expectations, the first place to look is
back at your understanding of the customer.
The 2006 ANA Marketing Accountability Task
Force members told us that understanding the
customer quite often requires understanding
segmentation because segmentation enables
the development of a sharper focus on
customer needs.
Virtually all respondents segment their markets
in one of three ways:
• Demographically- age , household income,
education, family size
• Attitudinally/psycho graphically- lifestyle,
beliefs, self perceptions
• Behaviorally- purchase habits, hobbies,
viewing habits, shopping locale
Philip Kotler mentions five criteria for an
effective segmentation:
• Measurable: One must be able to
determine the values of the variables
used for segmentation. This is especially
important for demographic and geographic
variables.
• Relevant: The size and profit potential of a
market segment have to be large enough to
justify separate marketing activities for this
segment.
• Accessible: The segment has to be
accessible for the organization in terms of
distribution and communication channels.
• Distinguishable: The market segments
have to be sufficiently diverse to respond
differently to different marketing mixes so
that the brand can draw advantage from
that.
• Durable: The segments should be relatively
stable over time to minimize costs of
frequent changes.
Merely identifying the segment you are
targeting is not sufficient to attain total
accountability. You must understand the
“worth of the customer” - that is the dollar
value of product or services which that
consumer/customer buys annually or over a
lifetime of purchases. In our 2005 Marketing
Accountability Task Force white paper we
talked about this metric as lifetime customer
value (LCV). This is not to suggest that

one should always target customers of the
highest annual worth or lifetime value. On
the contrary, huge fortunes have been made
by targeting consumers of modest or average
worth (e.g. Dollar General and Wal*Mart).
Regardless, you must know the worth of the
customer to market responsibly.
If you do not know the worth of the customer,
you cannot effectively develop an economically
rational trial/ conversion marketing model (i.e.
how many marketing dollars can I profitably
spend to attract or convert this customer?).
Trial/ conversion models vary dramatically
from segment to segment, from industry
to industry. One thing is certain; you can’t
build an accountability model if you don’t
know the worth of the target customer. The
2006 ANA/MMA Marketing Accountability
Survey revealed a startling fact. Only 14%
of companies responding indicated that
understanding the value of the customer
was important to the ‘senior executives’
of the company. One might suggest that
if the C-suite wants marketing to be more
accountable they should encourage marketing
to understand customer value.
For many industries, understanding the worth
of the customer means understanding the
lifetime value of a customer, the total value of
goods and services a customer may purchase
across all the need states your company may
offer to meet for that customer’s multiple
needs. In categories such as consumer
financial services, the combined value of the
profit available from credit cards, home loans,
insurance and the customer’s investment
portfolio can be a remarkably large amount. It
is that tantalizing sum total which has driven
the continuing consolidating acquisitions
among financial services firms to create the
heralded ‘financial services supermarket.’
Some of the more sophisticated marketers
from the 2006 ANA Marketing Accountability
Task Force told us they combine the concepts
of segmentation, customer worth and market
penetration to calculate matrices of ‘profit
pools’ which identify those market segments
where the company has already attained such
a high share that the remaining unrealized
profit pool is small. Total accountability means
understanding which segments offer the
greatest unrealized profit potential.

In the table below, the segments offer widely varying sizes, rates of consumption and total available
gross margin translating into significantly different total segment margin. Once the company adjusts
for its share of total segment margin, Segments #3 and #5 have the largest available profit pools for
the company.

Profit Pool Schematic example

Customer segments 1 2 3 4 5 6

# customers 100 K 150K 200K 150K 200K 200K

$ consumption/capita $100 $75 $125 $200 $250 $250

Total Sales ($Millions) $10 $12.5 $25.0 $30.0 $50.0 $25.0

Profit Margin % 40% 30% 50% 50% 40% 30%

Segment margin ($M’s) $4.0 $3.75 $12.5 $15.0 $20.0 $7.5

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

Available profit pool ($M’s) $3.8 $3.0 $10.0 $6.0 $14.0 $2.25

10
The Voice of the Customer
One clear indicator of how well a marketing
department understands its target customer is
the existence of a broadly shared ‘Voice of the
Consumer/Customer.’ The ‘VOC’ concept is not
new having been brought to the U.S. as part of
the Japanese inspired Total Quality movement.
Unfortunately, many marketing organizations
don’t take the time to develop a robust VOC.
Many companies simply summarize a few
demographic facts and label this effort a ‘Voice
of the Customer.’ The accountable organization
assembles a VOC following 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 identify where the customer touches the
company’s products and services, where
company personnel touch the customer and
what the nature of the contact is.
The totally accountable company shares its
VOC with all critical internal functional groups
for the purpose of aligning them around an
understanding of the target customer. The
best forum for attaining alignment is a tightly
scripted multi functional meeting in which each
function is asked to respond to four questions
about each of the key areas of the VOC:
• Is this fact/ conclusion about the customer
correct from your functional perspective?
• Is it a significant issue that you must
address?
• What action should be taken based on this
aspect of the VOC?
• What does this aspect suggest that you
don’t know or need to know about the
target customer?
A multi-functional 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 of a ‘learning
plan’ which all totally accountable companies
should have.
One of the primary outputs of a VOC or a ‘touch
point map’ exercise is the identification of ‘the
moment of truth’ or that ‘aperture moment’
when the product or service is most keenly
experienced by the customer. The accountable
marketer should be constantly searching for
that nano-second when the customer grants
permission to sell him something or tell
him something about the company and its
products. A learning of this nature can drive
the development of a distinctive and effective
integrated marketing plan.
11
Using The VOC To Find The Emotional Link Between Brand And Customer
One of the major attributes distinguishing the
totally accountable company is its intense focus
on understanding the emotional links between
the customers and their usage experience
with the company’s product or service. Some
companies facilitate understanding of that link by
creating a Voice of the Customer taxonomy which
includes concepts such as an ethnographic
depiction of ‘a day in the life’ of the consumer/
customer. These VOC taxonomy nodes exist to
force 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 fears’ lift it above a
desiccated recital of performance attributes into
the domain of emotional engagement where
buyer and brand bond in the inner sanctum of
the customer psyche.
At the deepest level, this search for customer
understanding is seeking an ‘insight,’ one of
those rare ‘eureka!’ shouting, forehead slapping
moments when marketers are handed the
combination to the customer’s safety deposit box
and an invitation to take what you can carry out
of the bank. Marketers spend lots of time talking
about insights much as 19th century explorers
spoke about finding the source of the Nile. Often
marketers will refer to the dozens of ‘Insights’
they have about their brand or product category
when what they really have are not insights at all
but merely a series of ‘nice to know’ facts or a
conclusion more useful to media planners.
A true insight is ‘a profound understanding of
customer behavior which can create competitive
advantage.’ It’s when Gillette realized that
women feel that body hair is unfeminine and that
removing that hair can ‘reveal the (very feminine)
goddess within’. An insight is Lipitor’s realization
that active, fit people do not comprehend they
can have dangerously high cholesterol which
they need to have checked and treated. It is
Budweiser’s intuition that beer is more about
male bonding than about taste. And, Michelin’s
understanding that the choice of a tire is a way
of honoring the terminal value of protecting the
safety of one’s children.
The totally accountable marketer can always
explain how each piece of communication with
the target customer is connected to the critical
(and often emotional) insight about the customer.
The insight becomes the silver thread knitting
together all consumer / customer interaction.
12
The Second Step: Having an Explicit Plan to Build Brand Equity
Marketers in the totally accountable company
have three responsibilities:
• Delivering the volume and profit numbers
in the annual budget
• Learning more about the target customer
• Building brand equity
The latter responsibility is important for two
reasons. Brand equity is money in the bank.
A review of the total market place value
(capitalization) of any publicly held company
will reveal that most of the value of the
company is traceable to ‘brand equity’ or the
belief that the company’s hold on the minds,
hearts and pocketbooks of its customers will
continue into the future.
A host of studies have been conducted
demonstrating the correlation between
brand equity and the marketplace value of
the company. These studies document how
brand value contributes to various financial
factors such as the ability to sustain higher
margins, lower the cost of introducing new
products, make cash flows more predictable
etc. One study, by the economic consultants
Stern Stewart, is particularly noteworthy. They
correlated market performance, as measured
by their Economic Value Added (EVA) concept,
with brand equity fundamentals, as measured
by Y&R’s 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 of
‘differentiation’ and ‘relevance’ dramatically
outperformed those with weaker measures in
these areas, as measured by changes in EVA.
The second reason totally accountable
marketers should focus on building brand
equity is this: our work with the 2006
ANA Marketing Accountability Task Force
demonstrated that in most companies no
one else explicitly owns brand equity. Unless
the marketing leadership steps forward to
claim this extraordinarily important asset of
the company, one of the critical enablers of
corporate growth will languish or worse still be
dissipated by a series of harmful short term
actions.
Despite the critical importance of building
brand 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 % of
respondent companies don’t track changes
in the financial value of brand equity and only
5% were ‘very satisfied’ in their understanding
of how marketing effects the marketplace
value of brand equity. Furthermore, interviews
conducted with ANA members indicate that
few companies have any explicit process or
plan for building brand equity.
This is unacceptable. Few would tolerate any
other major corporate function’s not having
a process or plan for delivering repeated
13
excellence in the area for which it is primarily
responsible. Imagine a food manufacturer or a
restaurant without a process to guarantee food
safety across the product delivery stream. Yet,
we see few marketers who have a documented
repeatable process for building brand equity.
Those few 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 five years) and contain specific
strategic objectives (some times called
‘imperatives’) the purpose of which is to drive
specific customer attitudinal or behavioral
metrics behind which all the functions of
the company are aligned. Some of these
‘imperatives’ may be under the direct control
of the marketing function such as advertising
positioning or targeting a particular group
of consumers who may have weak attitudes
towards the brand.
In many cases, however, the imperative
identified for improvement may NOT be under
the direct control of the marketing function.
These imperatives may involve a product
or service improvement internally owned by
manufacturing, by store operations, by R&D,
by packaging, by sales or even by finance. In
these instances, marketing’s power lies in its
understanding of the customer and its ability to
link the specified non-marketing improvement
with an improvement in customer attitudes that
drives one of the critical contributors to brand
equity 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 for facilities expansion
or product cost improvement, the company
cannot be and will not be totally accountable.
14
Example of an Equity Building ‘Imperative’

Detailed below is a fictitious example
of an equity building imperative from
pharmaceuticals, specifically from the
rheumatoid arthritis disease state. In this
example, the marketer uses a ‘contribution
to preference’ factor analysis protocol to
measure its equity. We do not advocate any
specific research protocol for becoming totally
accountable only that marketers measure
equity with a protocol utilizing analytics which
facilitate understanding brand equity based on
emotional and functional attributes.
respects. The first was the different delivery
mode of the two drugs. Brand A is delivered by
infusion which requires a visit to a hospital or
physician’s office every 6 to 8 weeks and a two
hour stay while the drug is administered. Brand
B, the newer medicine, is self injected at home
by the patient every 2 weeks and takes less
than five minutes to administer.
Rheumatoid Arthritis Brand Equity Score Card
Country: United States
Source: U.S. RA Brand Equity Surveys: (Q106)

Brand Positioning for Brand A:

In this approach, customers (physicians) For RA sufferers, only Brand A offers
Contribution to
unsurpassed pain reduction while addressing
are asked why they prefer Brand A to patient concerns over safety of administration.
Preference
All: Q1 2006
brand B. Their responses are grouped into
Brand
related factors and mathematical analysis Desired Brand Equity Attributes
Objective
Brand A Brand B

is performed to ascertain which factors Overall >5% 65 58

drive preference and by how much. This Pain Reduction/Efficacy > 5% 34 28
type of protocol is used in dozens of diverse works for everyone 20 23
verticals. Its utility is definitely not limited to gives long-lasting relief 11 1

pharmaceuticals. works rapidly after treatment 3 -

relieves pain in all joints - 4

In the following example, ‘Brand A’ the pioneer Ease of Use Parity 24 43

in this treatment category is preferred over provided as outpatient 8 -

a new drug ‘Brand B’ which has only been self administered - 40

available for about 6 months. Despite the encourages compliance 12 3

recent introduction of Brand B, the overall requires training/preparation 4 -

Safety in Use >10% 25 12
preference for Brand A is relatively small (65
side effects 3 2
vs. 58) and brand B has certain advantages
blood pressure/
primarily driven by its ease of administration. fainting concerns
20 10

bleeding 2 -
The key to identifying the imperative that could Availability/Payment Issues Parity 6 10
build Brand A’s equity lay in the dynamics Effect on Physician/
>5 10 7
behind the equity scores in two important Patient Relationship

15
Brand A’s marketing personnel had done
extensive mining of the brand equity data and
knew that among those doctors who valued
brand A for its high patient compliance and for
safety in use, brand A’s share of prescriptions
was significantly higher. In fact they could
predict with mathematical accuracy the
increase in market share and sales volume
associated with an increase in their ownership
of these two factors in the mind of doctors.
The answer to changing attitudes and altering
behavior lay in understanding the
Moment of Truth when the prescription
decision was made and in understanding
the rational and emotional motivations of
the patients and physicians. The patients
were generally older often with multiple
co-morbidities ranging from osteoporosis
to serious digestive maladies. They were
generally ignorant of their treatment
alternatives and were eager to receive and
willing to accept advice from their physicians.
For 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 of the
patient.
The marketers had learned two other
critical pieces of data hinted at in the Brand
equity data. Physicians and patients were
convinced the Brand A was ‘safer’ because
it was administered in a medical setting by
professionals. Second, the doctors were
convinced that compliance (adherence to a
rigorous schedule of dosage) would be better
with Brand A because patients would not
inject themselves regularly, and in some cases
not at all. This non compliance would ultimately
cause the patient to suffer and elicit frustration
for the physician as the patient’s health
deteriorated.
Mathematical analysis of Brand Equity attitudes
indicated that emphasizing the safety of the
medically administered Brand A would drive
an overall favorable attitude (equity) among
physicians, especially rheumatologists who
were the physician segment with the highest
annual prescribing value. As a result, the
marketers would emphasize that physicians
should re-assure patients (e.g. “I have never
had a serious emergency from this drug”) at
the moment when the patient was choosing
between Brand A (administered in a medically
supervised setting) and Brand B (self injected
at home by an already fragile patient).
Understanding the structure of the brand
equity Contribution to Preference model gave
the marketers confidence that increasing the
score on these two factors would increase
overall preference.
Accountable marketers can use their
knowledge of the target customer to identify
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 for
advertising development. In this way, a long
term equity action plan gets linked to this
year’s marketing plan and today’s advertising
execution.
16
The Third Step: Setting and Prioritizing Objectives
The annual marketing plan is best
understood as a series of 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 specific 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 of those marketers are as
follows:
• Aggressive collaboration between the
finance and marketing functions
• Using ‘net present value’ as a metric to
prioritize various marketing initiatives
• Planning ‘vertically’ by initiative rather
than horizontally by channel or type of
expenditure
Let’s expand upon these characteristics.
First, the aggressive collaboration between
finance and marketing is critical. Of all the
developments caused by the demand for
marketing accountability, none has been more
necessary and more surprisingly successful
than the growing, productive collaboration
between the marketing and finance functions.
The two functions have always ‘worked
together,’ but their working relationship
has, in some circumstances, tended to be
more that of wayward driver and traffic cop or
failing student and demanding teacher. Some
marketers may have viewed their finance
colleagues as adversaries bent on driving
down costs and expenditures by constantly
looking for opportunities to reduce marketing
budgets. For their part, finance may have
seen marketing as the one function with no
discipline, no accountability, and scant proof
that the expenditure was productive or even
necessary.
The twin and sometimes competing objectives
of sales growth and efficient expenditure of
funds has pushed marketers and finance
together. Marketing is a logical driver of sales
growth and finance is a logical arbiter of
expenditure efficiency. In many companies,
the two functions have come to appreciate that
their fortunes are interdependent. Each has
recognized that one might be able to help the
other achieve common objectives and so the
function of ‘Marketing Finance’ has become
less of a punitive score keeping function
focused on cost control and more of a resource
that could help marketers understand the
implications of certain expenditure choices.
In many companies, the finance function is
helping marketing develop financial models
from which marketers can begin understanding
the implications of expenditures before
they commit dollars. These simple models
often start with concepts such as reach and
frequency of a marketing initiative. They can be
17
applied to expenditure options as diverse as
redesigning sales force 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 1000
customers reached?’ Etc.
From simple models such as these, which
almost every company can develop without
exotic math, the finance function can develop
calculations of the ‘net present value’ of a
marketing initiative. This approach allows
marketing management to look across the
panorama of multiple marketing initiatives
on one brand or a portfolio of brands and
prioritize expenditures based on the net
present value of N initiatives. Net present
value or NPV has certain advantages versus
ROI in that it is an effectiveness measure with
efficiency components built in whereas ROI
is strictly an efficiency measure. Companies
such as Procter & Gamble which are focused
on growth rather than raw efficiency tend to
favor the use of NPV over ROI.
Some cynics often point out that the best
way to increase marketing ROI is to spend
no money and simply milk the franchise,
withdrawing priceless reputation from the
brand’s equity bank until there’s nothing left.
Proponents of using NPV point out that it
focuses on growth and on cash while having
the added value of forcing marketers to focus
valuable human capital (marketer’s time) on
projects which generate the most cash long
term.
The use of NPV in the planning phase of the
marketing demand creation process has the
added advantage of creating a target and a
baseline for evaluating the effort. This in turn
encourages (some would say demands) after
action analysis and thereby starts a virtuous
circle of plan, do, analyze, improve, and then
plan again.
This brings us to the last characteristic
of 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 for
many reasons, but one of the most important
is that it aligns target customer, and brand
equity enhancement with the expenditure
of marketing funds. Planning vertically also
means planning by initiative first then planning
by 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
specifically am I trying to accomplish with this
effort and what is the best way to accomplish
it”. In other words, it starts with an objective
tied to an initiative or project instead of starting
with the commitment of dollars to a marketing
channel with no equity building or sales
building metrics.
18
The schematic table below suggests how planning vertically, using NPV can help make marketing
more accountable. Each initiative is clearly identified. Each has a specific target audience, specific
effort assigned to it and specific NPV estimated by the marketing/finance team.

Initiative #1 Initiative #2 Initiative #3 Initiative #5

Initiative Initiative #4
(Customer (Customer (New (In-store
(Target customer) (Retail Buyers)
Group A) Group B) customers) Personnel)

Expenditure Type ( $ Mil)

Spot TV 1,200
Direct mail 250
POS material 180
Web site 100
Trade show 250
Direct Mailed price
750
reduction offer
Training program
300
and sales incentive
Production cost 150 50 50 30 30
Total cost 1350 480 900 280 330
Equity factor target (effect) Factor A (+++) Factor B (++) Factor C(+) N/A N/A
NPV 424 300 250 88 50

In the chart above,the term ‘Equity factor
target’ refers to the desired or estimated effect
that the dollars expended behind the initiative
will have on a specified component of the
brand’s attitude among the target audience. i.e.
this effort will have asignificant (+++) positive
impact on ‘factor A’.
The NPV (net present value) estimate is a
financial estimate of the current value of the
anticipated profit stream generated by the
expenditure among the target audience for
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 of the effort from the profit stream
and does so placing a higher value on dollars
expended soon than those spent later. All
future cash whether incoming or outgoing is
discounted by a common factor agreed to
by the company’s finance department. NPV
is primarily an effectiveness measure with an
efficiency component ‘built in’ For example,
two initiatives could have an identical ROI but
vastly different NPV’s because one project
effects millions of consumers and generates
lots of cash while the second initiative is small
and effects only a few thousand customers,
perhaps in a limited geographic area. Both are
equally efficient (have the same ROI) but the
larger initaive is much more effective (has a
higher NPV).

19
The Fourth Step: Developing an Integrated Marketing Strategy
Dramatic changes in the way customers seek
and process information have undermined the
traditional methods of 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 by
the explosion in marketing choices spawned
by digital technology. As if the sheer number of
choices were not enough, recent studies strongly
suggest that the same customer varies her
choice of information channels depending upon
the product or service category. For example, a
customer who depends primarily upon websites
for detailed information about automobiles and
pharmaceuticals may depend heavily upon
magazine advertising for fashion and cosmetic
information. Therefore, in a rapidly changing
technological and cultural environment, every
vertical and every initiative requires fresh
thinking. It is marketing as digital kaleidoscope,
ever shifting, ever changing 24/7.
The marketing industry has begun rallying
around the concept of integrated marketing
strategies (the simultaneous use of multiple
mutually re-enforcing channels and activities
behind one marketing initiative) as the answer
to the decline of the old media, the rise
of new media and the hectic time starved
decision cycles of today’s customer. However,
our interviews indicate that only a few 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 from chaos.
The totally accountable marketer starts
developing an integrated strategy by asking two
fundamental questions:
 . Who is my target?
2 . What is my objective?
The answers to these two questions focus
thinking and most importantly narrow the choices
for the integrated campaign.
For example, if the target is non users and the
objective is new trial, the appropriate choices for
the integrated campaign are quite different from
those wherein the target is a loyal user for whom
the objective is increasing product usage or
repeat purchase.
The next questions driving integrated campaign
development are:
 . What are current behaviors of the target
customer?
2 . What are the current attitudes of the
target customer?
20
All marketing is about changing or reinforcing
attitudes, and then changing or reinforcing
behaviors. Until one understands the current
attitudes and behaviors of the target customer,
it is difficult to select a campaign component
which can change these behaviors.
These questions drive the marketer back
to the Voice of the Customer which should
capture current attitudes and behaviors. Some
of the ‘unconventional’ nodes in the VOC (i.e.
questions such as ‘What are the customers’
hopes and fears?’ and ‘What is the day in
the life of the Customer?’ can be surprisingly
helpful in understanding attitudes and
behaviors).
Gaining internal alignment across multiple
functions about current attitudes and
behaviors can sometimes be a daunting task
because different functions (R&D, market
research, sales, store operations, the help
desk, etc.) often have dramatically different
notions about these fundamental issues.
That’s why drawing upon a multifunctional
group to validate the VOC is imperative.
That’s why gaining multi-functional 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 to
think or feel? What is it I want the customer/
buyer/ store personnel, order clerk to do?’
Moving through this cadence of questions
regarding current and desired attitudes,
current and desired behaviors may seem
mechanical and obvious but the accountable
marketer realizes it is part of sorting though
a complex maze of marketing choices. The
answers to the questions help to narrow the
range of choices. In fact, some refer to the
process as ‘short listing’ media or promotional
alternatives.
Before proceeding to choose the desired
combination of marketing alternatives, however,
a few other questions should be asked: ‘What
are the barriers to achieving the desired
behavior? Are these barriers emotional, non-
rational barriers? Are they rational barriers?
(E.g. the biggest barrier to trial is that my
product isn’t in distribution where the target
consumer shops). The answer to these
questions can play a critical role in further
narrowing the appropriate choices for an
integrated campaign.
A useful guide in that narrowing process is
yet another question: ‘What is the specific
marketing task I am asking this campaign to
perform?’ Is it to get the customer to include my
brand among a consideration set for a vacation
choice? Is it to drive a patient to a doctor for
a specific medical procedure? Or if I am a
marketing a chemical to an manufacturer in a
B2B environment, is it persuading an internal
product developer at the customer to specify
my molecule for a new product formulation?
At this point the marketer is ready to return
to the VOC where the company should have
captured historical responses to the ‘how’
question (i.e. ‘How do customers respond to
marketing expenditures?’). In this sector of the
VOC, various quantitative and qualitative data
21
regarding the efficiency and effectiveness of
various channel alternatives are captured.
Over the past decade and especially over the
past five 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 mapping
sales response to the marginal expenditure
of marketing dollars in a dazzling array
of combinations. At its highest stage of
development, this approach enables marketers
to de-compose expenditures by channel and
then create optimization scenarios combining
expenditure options in an almost infinite
number of channel/dollar combinations.
Despite the promise of this extraordinary
capability, only 7 % of respondents in the
2006 ANA/MMA Marketing Accountability
survey claimed to be very satisfied with their
ability to understand the sales impact of every
element of the marketing mix. Only 6% were
very satisfied with their ability to estimate the
effect of alternate marketing plans.
Everyone familiar with this capability
recognizes its primary weakness. It is
generated by analyzing historical data and
therefore cannot accurately predict precisely
how the same combination of expenditures
will perform under a future scenario where
the competitive situation will often differ from
the situation under which the response curves
were developed. That having been said, the
capability to assemble multiple scenarios with
the help of experienced marketing oversight
is one of the two or three greatest advances
in the SCIENCE of 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.
Unfortunately, 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 of integrated campaigns. This weapon
is often called ‘engagement’ measurement.
This new measurement alternative like all
measurement alternatives has its pluses and
minuses. This approach has two advantages
of remarkable value in building an integrated
marketing campaign. First, is its capability to
address 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 defined
customers and influence them to buy.
This enables marketers to assemble multi
contact point integrated campaigns with
unprecedented levels of confidence. We
recommend that marketers test and experiment
with one or more of these new engagement
research methodologies.
22
Beyond the Dashboard

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 of various marketing measures
that now appear on corporate dashboards in
literally hundreds of companies.
The metrics maturity model developed in
the 2005 ANA Marketing Accountability
Task Force report gave companies a useful
guide to assessing where they stood on the
maturity curve (See below and Appendix
II). Its identification of the four critical
components of marketing accountability (data,
metrics and analytics, process and culture)
helped companies identify a path towards
improvement.

Metrics Maturity Model

Aware Practicing Established Leading
Data  Limited by type and  Available in limited,  Broad spectrum time  Integrated Data
function important areas series data across platform across
 Unreliable time series  Stable & consistent over geographies, customers customers &
 inchoate time & functions expenditure types
 No integrated platform  Some integration  Capable of rapid cross
functional analysis
Analytics &  Accounting-oriented  Limited mix modeling  Some predictive  Predictive & integrated
 Backward looking  Oriented towards ‘success factors’  Multiple tools, real-time
Metrics  Inputs vs. outputs specific campaigns or identified response
 No framework expenditures  Stable techniques  Continuous
 Primitive analytics  No integration  Metrics tied to strategy optimization capability
Culture  Metrics a responsibility  A management mandate  Sophisticated  Woven into every
of finance  a multi-functional team dashboards encourage project & plan
 Competing metrics by accepts responsibility sharing  Understood, shared &
BU  Masses of measures  Metrics broadly lived
reported upward understood  Seen as desired
 Professional metrics capability
leadership
Process  Pockets of projects  An appointed team  Recognized high level  Robust multi-functional
 No tie to annual process  Ad hoc process ownership process integrated into
Embedment  Annual review and  Stable , accepted , planning
modification mature metrics  Metrics drive end-to-
 Linked to planning end marketing process

Most organizations are between “Aware” & “Practicing”

Source: Model adapted from DoD Metrics Review, May ‘04

23
From interviews with ANA marketing
practitioners, it became clear that
improvements have been made in the areas
of data, especially the availability of the new
engagement data developed by various
vendors, and organizational collaboration of
the marketing and finance functions.
Where marketers are still falling short
however is using the dashboard as a catalyst
to understanding necessary steps for
improvement. It is still a measurement tool,
not a management tool.
Several factors appear to contribute to the
paralysis setting in after 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 that
over 50% of companies responding had
no separate budget for accountability
or were funding those efforts out of
working marketing dollars. The study
further showed that nearly two thirds of
companies who provided an estimate
were spending less than 2% of the total
marketing budget for accountability and
analytics.
Factor #2 - The metric chosen isn’t
actionable; it is an input metric or
an intermediate metric with a vague
provenance leading to nowhere. Far
too many metrics are lagging indicators
presenting a perfect rear view mirror
image of the crash behind you but no
forward looking line of site to what is
about to occur.
Factor #3 - The metric chosen isn’t
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 the
measure especially the marketers.
Factor #4 - No one demands an
understanding of why a number turned
south. Everyone is working at such a
frantic pace that neither management nor
marketers feel they have the time to slog
into the swamp of data to understand
what went wrong and develop a plan to
fix it.
Factor #5 - Marketers have no causal
model, no generally agreed or, better
still, proven correlation linking a specific
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 identify 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 fed by a program
24
which is adequately funded, intelligently
designed and committed to analytics. Based
on our discussions, four behaviors are
required if marketers are going to become
totally accountable.
Accountable Behavior #1- Demand
analysis at the level of the individual
initiative, especially when a
recommendation is made for a major
initiative such as a new product
introduction or the penetration of a new
target customer group.
Accountable Behavior #2 - Express
that initiative‘s objective so that it
can be measured. Identify the major
assumptions that lead you to conclude
the effort is worth doing and make
them explicit (e.g. ‘I’m going to reach
this many customers with this many
messages and those customers are
going to change their behaviors as
follows’).
Accountable Behavior #3 - Create a
measurement plan. Make explicit how
you are going to measure the success
of the initiative. These should be linked
to the objectives and assumptions
mentioned above.
Accountable Behavior #4 - Develop
a causal model that identifies over the
longer term, which metrics are most
reliably predictive of marketplace
success.
Accountable behavior #5 - Recognize
that you must spend money to make
money. Most aggressive accountability
programs backed by contemporary
analytics will produce dramatic returns
exceeding 10 to 1, even greater returns
during the introductory phases.
These accountable behaviors can all be
enabled by developing an analytical framework.
Totally accountable companies have such a
framework and use it to provide structure and
direction to their accountability efforts.
25
An Analytical Framework of Who, What and How -
The Key to Accountability
Analysis isn’t easy. Often analytics, whether
from third parties (vendors) or from a
corporate group, focus on the result of the
expenditure (the ROI). They rarely if ever offer
insight as to why the ROI wasn’t quite what
had been expected. Truly valuable analysis
is focused at the latter issue (why was the
ROI, the NPV or sales number what it was?).
That’s why one needs an analytical framework.
If one is unable to develop a homegrown
version there are frameworks offered by many
vendors including EMM Group (the author
of this report for the ANA), Integration-IMC
and others. EMM Group and Integration-IMC
espouse that marketing organizations build
marketing metrics programs around a simple,
yet effective “Who, What and How” framework
in order to become more accountable.
The framework itself is easy to articulate
but it involves disassembling and then re-
assembling the component parts of marketing.
The framework asks for the answer to one all
encompassing question: ‘Am I focusing 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 of permutations
and combinations of who, what and how.
Fortunately, with multiple repetitions, the
questions get fewer and the answers get
clearer.
Outlined below are examples about how to
establish and use the framework.
WHO
When a metric fails to meet expectations or
when you want to improve an already excellent
metric, you start by focusing on the customer.
Any given customer set can be segmented in a
myriad of ways but virtually all fall along one of
three basic axes, demographics, behaviors and
attitudes.
Demographics
• Customer geographic location
• Age / income / education / race / sex
• Job title / function
• Socio-economic class
• With/without a characteristic (type of
dwelling, disease, etc)
• Size or type of customer (SIC code)
Behavior
• Volume of purchases (heavy / medium /
light )
• Frequency / recency
• Type of purchase (order size, number of
items, categories purchased)
• Loyalty (share of requirements)
• Usage occasion
• Purchase switching
• Increase in annual consumption / purchase
• Trade up to higher margin products or
services
26
Attitudes
• Net promoter score (high / medium / low)
• Prefer X/Y/Z characteristic / function
• Need state / attitude factor
• Reason for purchase
For example, if the brand were in the oral care
category, the ‘who’ might be:
• Total buyers
• Large families (demographics)
• Household head < 30 (demographics)
• Loyal buyers (behavior)
• Consumer segment offering greatest profit
potential (behavior)
• Purchase most often in mass channel
(behavior)
• Whiteness concerned (attitudes)
• Gum concerned (attitudes)
• Cavity concerned (attitudes)
• Germ concerned (attitudes)
The metrics across these multiple ‘Who’s’
might be:
• Intent to purchase
• Purchased last
• Purchase exclusively
• Will consider
• Brand I have recommended
• Most innovative brand
• Best value
If the vertical were a service such as package
delivery, 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 100
lbs, > 100 lbs
The metrics could be:
• % increasing volume / % decreasing
volume
• Ease of use
• Pick up reliability
• Delivery reliability
• % profit margin per mile
• Consideration set inclusion
• Company I recommend to others
The intent is to find the combination of
customer segment and metric which provides a
predictive insight into future performance and
thereby facilitates the development of action to
prevent the problem and improve results going
forward.
WHAT
If a metric fails to improve or even declines,
then, after investigating the target audience
issues, the analysis should focus on what the
27
marketer is offering. By ‘What’ we mean the
value proposition or benefit you are offering to
customers.
We recognize that ‘what’ could logically include
issues outside the functional responsibility
of marketing. For example, in consumer
packaged goods the performance attributes
of 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 a
competitive outlet. In a business to business
vertical, the ‘what’ could be the price of the
product or a logistical capability issue versus a
key competitor. These disparate characteristics
(product performance, in store service, price or
logistics) are important components of the ‘what’
experienced by the customer and need to be
understood in detail. However, as a general rule,
the marketing function has limited short term
control over many of them. Therefore, they need
to be reported separately and not as measures of
the marketing function’s responsibility.
Marketing is primarily responsible for conveying
the value proposition / benefit to the customer
so marketing needs to measure the appeal of its
message.
This paper does not presume to tell marketers
which measurement protocol to use. Most
marketers have competent professionals who
are familiar with various vendor’s approaches
to measuring the appeal of a benefit. Our
purpose is to lay out some broad principles and
concepts which leading marketers find helpful in
understanding the appeal of the ‘what.’
First and most important, make sure to ask the
right target respondent. This obvious caution is
actually somewhat difficult to achieve in many
B2B industries where the decision makers
and decision influencers may be buried in the
customer organization or not readily accessible
to who ever is trying to generate a response.
The success of customized internet panels that
facilitate responses from normally inaccessible
executives is a tremendous boon to marketers
in various industries where marketers have long
depended on second hand or apocryphal data
regarding benefit appeal.
Second, look beyond a top line preference
number measuring the overall preference for
Brand A versus Brand B. The whole purpose is
to isolate a specific benefit or the one you are
basing your marketing appeal upon. Marketers
should utilize a protocol with rich diagnostics
offering explanations or at least hypotheses for
why a specific number is what it is. Some ANA
members employ the popular Net Promoter
Score (NPS) approach as the primary metric for
measuring a brand’s equity. They tell us that they
also utilize supporting diagnostics to help explain
why the NPS number ( 8.6, 7.5, 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 of various
benefits especially among various target
audiences. An example is the Contribution
to Preference approach cited earlier in this
discussion. By grouping responses (reasons for
preference) under various similar factors, the
marketer gains valuable insight into why Benefit
A is not moving overall preference quite as
powerfully as is Benefit B.
28
Third, use a protocol that provides a
competitive context. Knowing how you
measure in the absolute is certainly helpful
but most marketers compete in a multi brand
environment where your company may be
excellent at Benefit X but a competitor may be
conveying that benefit in a superlative fashion.
One of the problems with the monomaniacal
focus on Marketing ROI is that it provides
zero competitive context. You may have a
satisfactory number but it may be much
poorer than a direct competitor’s return in the
same channel. The same logic argues for a
competitive context in measuring the ‘what.’
Look for ways to express your benefit in
terms of a difference between you and your
competitors. Try to establish a metric for
‘ownership’ of a benefit 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 11 chip allocation exercise. Strive for a
significant and growing variance between you
and competition.
Fourth, measure benefit performance and
customer comprehension with a consistent
protocol over time. In many verticals, customer
reaction to benefit positioning changes very
slowly. Expecting a change in a few months
just isn’t realistic in most verticals under
normal circumstances especially when its
actual deliverance may depend primarily
on other corporate functions (product
development, in store service, logistics,
pricing, etc).
That’s why some marketers understandably
want their performance measured by factors
over which they have primary control (e.g.
ad copy scores, especially the persuasion
element). Some marketers argue that this is
the fairest way to measure their contribution
because it removes all the factors (i.e. product
or service delivery, media weight, pricing and
distribution) which can and do affect customer
rankings in the marketplace yet are beyond the
direct control of the marketing function.
With these as principles or guidelines, here are
the kinds of metrics which you might consider
developing:
• Relative importance of chosen benefit
versus all other benefits in the vertical in
the target audience (Benefit A = 28%,
Benefit B 22%, etc.)
• Change in the importance of that benefit
(Benefit A was + 5% now +9%)
• Ownership of that benefit as measured by
metrics such as:
 Relative ranking difference on a 5 point
scale on Benefit #1
Ñ Brand A ranked at 4.5, Brand B at
3.9 , ∆ 0.6
 Relative ranking versus average on 100
point scale on Benefit #2
Ñ Brand A + 10 points, Brand B
-5 pts, ∆ 15 points
29
• Share of mentions in category on Benefit #3
 Brand A gets 28% of mentions; Brand
B gets 22, ∆ 6% points
• Ratio of mentions versus share of market
on Benefit #4
 Share of mentions = 33 while market
share= 22; ratio = 33/22 = 150
• Absolute score on Benefit A in copy test
versus previous copy
• Copy persuasion score
• Copy point registration on:
 Different
 New
 Likeability
 Informative, new information, ‘learned
something new’
HOW
Over the past decade, while conventional
marketing weapons have become
progressively less effective and less efficient,
the number of communications options
available to marketers has exploded. Not only
have the number of options in conventional
communications vehicles such as television
dramatically increased with the ubiquitous
availability of 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 efficient, marketers have turned
more frequently to options such as events,
trade shows and even targeted special print
publications. In many cases, of course,
marketers are assembling ‘integrated marketing
campaigns’ which combine the unique
capabilities of various media to produce
an effective synergistic campaign. These
integrated campaigns often involve three or
four separate marketing vehicles in concert
with a targeted sales campaign and selling
message.
The proliferation of 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 four
other vehicles at the same time? Why can’t
you just focus on the one or two channels that
are the most effective? Why don’t you know
how to spend the shareholder’s money more
efficiently?’
Larger advertisers with larger budgets have
been able to address the relative contribution
of individual components of 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 feel these
techniques unfairly penalize the marketing
function because they include the effect of
many aspects of the user experience over
which marketing has little or no control (price,
product or service performance, logistics, etc.).
Recently several suppliers have developed new
approaches to measuring the effectiveness of
the ‘how’ component of the marketing equation
(Who should I target with what message and
30
how should I deliver it?). These approaches
differ in various ways. Rather than discuss the
merits of one or the other, we shall use one
of 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 focuses on
helping marketers choose the most effective
marketing ‘contacts’ to engage a customer. In
their parlance, a contact could be any one of
dozens of different marketing vehicles such as
television, print, a test drive of an automobile,
a closed circuit telecast in a physician’s office,
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
effect, they provide a one number reading of
how various contacts engage with customers
on a category by category and brand by brand
basis. They DO NOT measure the effect of
a marketing option on brand sales only the
ability of a marketing option to engage the
customer. This approach has the disadvantage
of not measuring ROI but it has the advantage
of avoiding most of the influences for which
the marketer is not responsible (Pricing,
product performance, etc.). This approach
focuses on decisions for which the marketer
can be legitimately held accountable: the
choice of marketing vehicles (or channels in
their parlance) and the relative monies spent
on one contact type versus another.
The research protocol of 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, please
be aware that other vendors offer similar
approaches with varying advantages and
disadvantages in cost, comprehensiveness,
geographic and industry applicability, etc.
For a quick summary of the Integration - IMC
approach see Appendix III.
New research techniques provide marketers
with new information with which to develop
integrated campaigns. These techniques also
enable marketers to measure the relative cost
of experience points for each of the contact
types they employ. Such metrics provide
marketers with a new yardstick for evaluating
the efficiency and effectiveness of new media
options which have proven hard to evaluate
using previously available methodologies.
31
Total Accountability = Total Credibility
The ten commandments of
The work by the ANA Marketing
total accountability
Accountability Task Force over the past
few years clearly indicates that marketers
are striving to increase marketing’s  . Create a multi-functional
credibility. Progress has been made but internal accountability team
much work remains to be done. 2 . Agree on the expectations
that the management team
Admittedly, marketing IS harder to has for marketing
measure than other corporate functions.
3 . Choose metrics that align
Building robust accountability processes
with expectations
and programs by starting with the best
practices outlined in this report, can 4 . Select predominantly leading
serve to overcome the skepticism of indicator metrics capable of
CEOs -many of whom lack a marketing driving a causal model
background - about marketing’s efficiency 5 . Create a robust VOC so
and effectiveness. you understand the target
customer
6 . Demand an explicit plan to
To the marketers we say simply, earn
build brand equity
a seat at the table by building a robust
accountability program. The tools and 7 . Develop measurable
processes are at your finger tips. objectives for 90% of
marketing expenditures
To the CEO’s frustrated with Marketing’s 8 . Use a rigorous process to
accountability we say, mandate that build integrated marketing
funds are set aside to make marketing plans
accountable. You don’t need to be
9 . Analyze 90 % of marketing
a marketing expert to enforce the 10
expenditures using a who,
commandments of accountability shown to
what, how framework
the right.
0 . Create an accountability
If you follow these ten commandments, budget sufficient to
you will be well on your way to total measure 90% of marketing
accountability. expenditures

32
Appendix

33
Appendix I
(Catalogue of Metrics from the 2005 ANA Marketing Accountability Task Force Findings)
The work of the 2005 ANA Marketing
Accountability task force was twofold: (1)
to review current best practices used by
ANA member companies to improve their
marketing accountability; and (2) to provide
a practical catalog of accountability metrics
used by industry practitioners from which
marketers may choose those appropriate to
their unique situation. This need relates directly
to one of the task force’s principles of best
practice - identifying management’s strategic
expectations of marketing and developing
metrics to express progress or lack thereof in
the targeted responsibility.
Current best practice suggests that metrics
reflect the strategic intent which a company’s
management has for its marketing function.
If management expects marketing to build
brand equity then measure that. If delivering
sales prospects is important, measure that. If
increasing the lifetime value of customers is
important, measure that. With this principle in
mind, the appendix that follows groups metrics
by strategic intent.
Every company and every vertical is different.
That’s why the appendix includes several
metrics under each strategic intent. These
unique metrics represent different ways
which study participants responded to their
management’s request for accountability about
a specific strategic intent they attribute to the
marketing function.
The appendix provides a method of calculation,
likely data sources and the types of verticals
for 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 different but more appropriate
metrics for their company.
This appendix represents but a beginning. We
welcome comments, questions and additions
from every marketer.
34
Innovation

In many companies, marketing has at least a
partial responsibility for innovation. Some study
participants reported difficulty in developing
appropriate metrics for innovation. When we
queried others about how they were measuring
‘innovation’, they reported the metrics listed below.
Two of these metrics seemed particularly creative.
One compared the projected sales value of their
innovation pipeline to the gap in their sales forecast
between the total sales gain needed to meet Wall
Street’s expectations and the projected value of
current products. Another participant claimed to
measure ‘speed to market’ with innovation as a
critical metric in a category where product news is
of paramount importance.

Definition/ Source of Calculation or Verticals where

Innovation Calculation data technique appropriate Problems or concerns
$ sales Sum of sales of Internal Simple addition. Virtually universal Simple, broadly applicable,
products/services/ Company Results compared practical measure
retail locations < 3 sales to previous year
yrs old

% of $ Sum of sales of Internal Simple addition Virtually universal Simple, broadly applicable,
sales from products/services/ Company and division practical measure
innovation retail locations < sales
3 yrs old divided
by total sales
compared to
previous year

Innovation Sum of sales of Internal Com- Simple addition Virtually universal Competitive data sometimes
competitive- products/services/ pany sales, and division hard to calculate. Requires
ness retail locations < estimate of agreed internal data
3 yrs old divided competitive collection protocol
similar sales of sales from
leading competitor third party
syndicated
data or com-
petitive public
data

Profitability of Ratio of margin Internal Divide profit Virtually universal Accounting conventions
New product/ of new products Company cost margin of new required to determine
service /services versus and profit data products /services overhead attribution among
existing product/ by that of existing new/current products
services products /services

New product/ Ratio of estimated New product Addition of new Virtually universal Determination of time
service sales of new estimates product estimates periods for comparison.
pipeline product portfolio from 3rd party divided by stated Source of new product sales
sufficiency vs. stated sales or internal sales goals estimates (e.g. external
goals source third party new product
and stated estimation service or
company internal source)
sales goals.

35
 Definition/ Source of Calculation or Verticals where
Innovation Calculation data technique appropriate Problems or concerns
Customer % of new product/ Household Divide new cus- Virtually universal Determining number of new
growth from service/location panel data, tomers/consumers customers. Some verticals
new products/ customers new to customer of product/ service may require customer sur-
services brand/company survey, CRM by known cus- vey to ID new customers
customer base sales records tomer /consumer
set before new
product

Research Number of patents Patent filings Compare current Most product ori- Many valuable innovations
productivity received versus years patents to ented marketers are not subject to patent
previous year previous years filings. Patents per se do not
guarantee commercial or
competitive value

Organizational Number of Internal Collect suggestions Virtually universal Quality of suggestions.

innovation suggestions company and total or divide Executive response to em-
annually or ‘suggestion total by number of ployee input. Recognition of
number of box’ employees quality. An input measure.
suggestions No guarantee of commercial
/employee value

Innovation # of cost reduction Internal Capture of cost Virtually universal Capture of source of cost
implementa- suggestions suggestion reduction ideas reduction suggestion and
tion from employees and cost implemented implementation. Determi-
implemented reduction data within past 12 nation of cost reduction
months realization

Cost reduction $ value of Internal Capture of cost Virtually universal Capture of source of cost
innovation cost reduction suggestion reduction ideas reduction suggestion and
suggestions and cost implemented implementation. Determi-
from employees reduction data within past 12 nation of cost reduction
implemented months realization

Quality of # of new product/ Consumer Standard Most goods and Use of standard research
innovation service ideas given response to ‘definitely would services categories protocol providing bench-
‘top 2 box’ rating idea in survey buy/probably marks. Probably requires
or after trial would buy’ survey external third party research
response among intervention. Not a basic
target audience responsibility of marketing

Extension of # of customers/ Household Collection of Most goods/ Those purchasing may not
consumer consumers panel data, purchases services/retail be new to franchise merely
/customer purchasing new customer dependant upon categories transferred from other prod-
franchise product /service survey, CRM data collection uct/service or retail location
within year one sales records method used
after introduction

Speed to Average time Internal Difference between Many product Isolating start date. Ad-
market period from receipt marketing date of receipt of /services/retail ditionally, marketing not in
of patent approval records positive legal or categories control of many develop-
or ‘top two box’ marketing notice ment issues
score and introduction of
idea into sales with
customer

36
Differentiation

Many brand equity models put a premium on the
brand’s being seen as different by consumers.
It’s no surprise that many participants reported
metrics aimed at measuring marketing’s success at
positioning the brand as ‘different’ from competitors.
Difference comes in many ‘flavors’. Some measure
‘better value’, others more emotional attributes such
as ‘makes me feel better about myself’ or ‘makes
life more enjoyable’. The precise collection of words
depended upon the product category but the intent
was to measure ‘difference’.

Definition/ Calculation or Verticals where Problems or

Differentiation Calculation Source of data technique appropriate concerns
Special product/ Average rating on Customer survey Ranking on 5 point Virtually universal Care required in
service/ store 5 point scale in an- comparing service scale compared to framing ques-
swer to description or product to benchmark products, tion, selecting
‘This is a special benchmark stores or services respondents and
store, product or products and benchmarks
service’ services

Unique product/ Average rating on Customer survey Ranking on 5 point Virtually universal Care required in
service/ store 5 point scale in an- comparing service scale compared to framing ques-
swer to description or product to benchmark products, tion, selecting
‘This is a unique benchmark stores or services respondents and
store, product or products and benchmarks
service’ services

Product/service/ Average rating on Customer survey Ranking on 5 point Virtually universal Care required in
store ranking on 5 point scale in an- comparing service scale compared to framing ques-
‘value’ swer to description or product to benchmark products, tion, selecting
‘This store, product benchmark stores or services respondents and
or service is a good products and benchmarks
value’ services

Product/service/ Average rating on Customer survey Ranking on 5 point Many retail, ser- Care required in
store ranking on 5 point scale in comparing service scale compared to vice and product framing ques-
‘makes life more answer to descrip- or product to benchmark products, categories tion, selecting
enjoyable’ tion ‘This is store, benchmark stores or services respondents and
product or service products and benchmarks
that makes life more services
enjoyable’

Product/service/ Average rating on Customer survey Ranking on 5 point Virtually universal Care required in
store ranking 5 point scale in comparing service scale compared to framing ques-
on ‘makes me answer to descrip- or product to benchmark products, tion, selecting
feel good about tion ‘This is store, benchmark stores or services respondents and
myself’ product or service products and benchmarks
that makes me feel services
good about myself’

37
Customer Centricity

At many study participants, marketing owns the
customer and is responsible for keeping the
company ‘customer centric’. Not surprisingly,
the metrics for this important strategic intent of
marketing are many and varied across B2C and
B2B. They range from familiar concepts such as
‘customer loyalty’ to less familiar ones such as
Frederich Reichheld’s ‘net promoter score’ and
the number of training hours that a B2B company
invests in its customers.

Customer Definition/ Calculation or Verticals where Problems or

Centricity Calculation Source of data technique appropriate concerns
Customer or % of customer/ Household panel Value of company Most goods/ Difficult calculation
consumer loyalty consumer needs data, customer product/ services services/retail in many verticals
in category be- survey, CRM divided by total cus- categories because of data
ing satisfied by sales records tomer purchases voids
product, service or from all competitors
retail outlet offering similar prod-
ucts and services

# of products # of companies Company sales Capture the number Many B2B Distribution
purchased multi-product line records or sur- of company products verticals through third
purchased by vey of end users purchased by each parties may
average customer/ of third party customer. Compute complicate data
consumer distributors the average capture

Rating as vendor Customer ranking Customer survey Ranking on 5 point Many B2B Often more
by customers of company as permitting scale in response to companies influenced by
vendor or supplier comparison to question: How do product or service
many customer you rank company X level than by
suppliers as supplier?’ marketing per se

Training of Average hours of Internal training Capture number of Those where Training
customer training provided records hours from com- company and sometimes self
personnel to customer’s pany and customer customer success administered by
employees records. Convert depends upon employee, difficult
to Hrs/customer knowledgeable to capture
employee customer
employees

Customer ranking Customer ranking Survey of cus- Ranking of company Many B2B Often more
of products and of company’s prod- tomer personnel products /services verticals influenced by
services ucts or services familiar with on 5 point scale product or service
products permitting compari- level than by
son to competitor’s marketing per se
product’s/services

Net Promoter Difference Customer survey Calculation devel- Most goods/ Requires adher-
score (Riechheld between strong oped by Riechheld. services/retail ence to disciplined
concept) ‘promoters’ of See article in bibliog- categories survey methodol-
company and raphy ogy developed by
detractors Riechheld

38
Customer Definition/ Calculation or Verticals where Problems or
Centricity Calculation Source of data technique appropriate concerns
Key Characteristics Customer ranking Customer survey Ranking on five point Most goods/ Requires knowl-
ranking of company on scale of selected services/retail edge of important
key performance attributes important categories attributes, careful
attributes of to customers choice of respon-
product or service dents, framing of
questionnaire

Customer profit on The $ profit Customer re- Can be simple Company’s prod- Requires collabo-
company products realized by client cords or custom- capture of customer ucts are resold ration of customer.
on company’s ized study resale data or to third party or May require
products sophisticated activity consumers sophisticated data
based costing study collection and cost
in complex supply accounting ap-
chain industries proach (ABC). May
not be marketing
influenced

39
Marketing Efficiency

If marketing accountability means anything, it mention should go to the sophisticated attempt

means spending the marketing budget efficiently.
Therefore it’s no surprise that participants reported
a broad range of marketing efficiency metrics. Many
of these metrics were generated by sophisticated
market mix modeling but some were simpler such
as the focus on controlling ‘nonworking’ $’s as a
percent of the total advertising budget. Special
to capture the change in lifetime value of the
company’s customer franchise divided by the
total marketing expenditure for the year. This is a
particularly artful attempt to reward advertising for
attracting a customer that generates revenue for a
lifetime.

Marketing Definition/ Calculation or Verticals where

Efficiency Calculation Source of data technique appropriate Problems or concerns
∆ LCV/ annual LCV Current yr Syndicated Compute the aggre- Valuable across Requires sophisticated
marketing cost –LCV yr last yr panel data, gate lifetime value many verticals, calculation regarding
/ marketing $’s company sales of customers in B2B and B2C customer loyalty decay
current year records and franchise, subtract curve. LCV not univer-
marketing bud- last year’s value. sally appropriate
get data Divide the differ-
ence by annual
marketing costs

Non working $’s Non-working Internal budget Capture all ad ex- All categories Requires accounting
control $’s as % of total records penses not directly convention identifying
marketing or ad $’s touching consum- ‘non-working’ dollars
ers (department
overhead, com-
mercial production
costs, research,
website develop-
ment, etc) divide
by total marketing
or ad costs

Recall or Respondent recall Syndicated re- Divide recall by All categories Short term measure.
persuasion per $ (or persuasion) search provider cost of producing Higher production
of ad production divided by the total and internal cost campaign, index values may ‘wear well’
cast of production records versus past cam-
paigns e.g. recall of
15/$300k = 5 recall
points per $100K

Return on Return per dollar Time series data Isolation of incre- Any vertical or Requires time series
advertising invested in specific analytics mental revenue expenditure input data, usually
investment period by specific and associated meeting specific requires experienced
media investment costs using market conditions third party analysis,
mix or multi variate primarily specific conditions.
analysis availability of Not applicable to
time series data many B2B expendi-
tures

40
Marketing Definition/ Calculation or Verticals where
Efficiency Calculation Source of data technique appropriate Problems or concerns
Return on Return per Time series data Isolation of incre- Any vertical or Short term focus. Re-
promotional dollar invested analytics mental revenue expenditure quires specific condi-
investment on promotional and associated meeting specific tions, usually requires
option (e.g. costs using market conditions experienced third
price reduction, mix or multi variate primarily party analysis. Not ap-
couponing, etc) analysis availability of plicable to many B2B
time series data expenditures

Customer value Calculate lifetime Internal Identify direct costs Many verticals Requires rigorous
versus acquisition value of customer. marketing and associated with where direct accounting controls
cost Divide by customer data customer enroll- to consumer and sophisticated cal-
acquisition cost ment. Calculate marketing makes culation of customer
lifetime value of calculation both worth. Decay curve or
customers similarly important and loyalty level is key
acquired. Divide relevant
value by acquisition
cost

Reduce sales cycle Identify historic Internal sales Review sales Any vertical Marketing does not
time time required to records records from CRM where marketing control all elements
close sale on new files to identify closely supports of sales cycle. Metric
account or new sales cycle for new sales with requires accounting
product/service. client or new prod- prospect focused conventions and policy
Measure change uct /service efforts agreement
over time

41
Trial Generation

In many companies, trial generation is perceived
as one of marketing’s most important strategic
responsibilities. Therefore, metrics about trial
generation appeared on many of the dashboards
which study participants forwarded for our perusal.
These trial metrics came in many forms but the
three shown below capture the common ways of
measuring trial generation. These metrics were
often complemented by those calculating the cost
per new trier, the cost of a new customer, etc.
These metrics were especially important in verticals
such as consumer financial services and Telco
where gaining new customers absorbs virtually all
marketing funds not focused on equity building.

Definition/ Calculation or Verticals where

Trial Generation Calculation Source of data technique appropriate Problems or concerns
Extension of # of custom- Household panel Collection of Most goods/ Those purchasing may
consumer / ers/consumers data, customer purchases services/retail not be new to franchise
customer franchise purchasing new survey, CRM dependant upon categories merely transferred from
product /service sales records data collection other product/service or
within year one method used retail location
after introduction

New accounts # of new accounts CRM sales Capture of new Most B2b New account
added in past records or dis- accounts from verticals activity rarely the
period tributor records sales or distributor sole responsibility of
records marketing

Trial of new # or % of targets Internal sales Capture of Many retail and May require adjustment
location/branch visiting or purchas- records from customer data B2b verticals for cannibalization of
ing from new retail location from new location existing location. May
outlet or service require identification
branch of target consumers to
compute % penetration

42
Lead Generation

In many B2B companies, lead generation for the
company’s sales force is the primary responsibility
of the marketing function. This seemingly simple
concept presented study participants with many
problems ranging from separating leads among
overlapping marketing efforts to associating a lead
with efforts which occurred well before it actually
showed up in the hopper. Companies who are
serious about isolating the effectiveness and
efficiency of lead generation often must create
rigorous test and control areas or panels. Even this
innocent approach often created problems when a
specific sales region realized it was functioning as a
‘control’ market and thereby being deprived of effort
directed into the test area.

Definition/ Calculation or Verticals where

Lead Generation Calculation Source of data technique appropriate Problems or concerns
Number of sales # of sales leads Company Capture of leads Most goods/ Requires means of
leads generated generated by contact center in response to services/retail identifying campaign
campaign in outbound or categories generating lead
period inbound inquiry

Cost / sales lead Cost of campaign Marketing Determine Most goods/ Requires internal ac-
divided by # cost records. incremental cost services/retail counting conventions
of sales leads Company of campaign. categories regarding cost defini-
generated by contact center Divide by # of tions. Requires iden-
campaign in leads in response tification of campaign
period to outbound or generating lead
inbound inquiry

Lead conversion Percentage of Company Determine # of Many B2B Requires internal

ratio leads converted contact center. leads in response categories accounting conven-
into a sale Company sales to outbound or tions regarding what
records inbound inquiry. constitutes a sale.
Divide into number Requires identification
of leads converted of campaign generat-
to sale ing lead

43
Awareness

In most companies B2C or B2B, creating awareness
is one of the primary responsibilities of the
marketing function. As we pointed out in the body
of the report, ‘awareness’ is an ’intermediate’ metric
which is qualitatively better than an input metric but
much less valuable than an output metric such as
one that measures a behavior induced by marketing
e.g. sales. None the less, many marketing
departments are held responsible for ‘awareness’,
a metric that turns out to be almost more trouble
than it is worth. In B2B companies, a related metric,
‘inclusion in a purchase consideration set’, has
more to recommend it but also presents problems
in isolating the activity causing a prospective buyer
to include a specific company in its group of
prospective suppliers.

Definition/ Calculation or Verticals where

Awareness Calculation Source of data technique appropriate Problems or concerns
Top of mind Unaided and Survey Response by selected All verticals Awareness does not imply
awareness aided awareness respondents to survey preference. Survey can
of company question regarding be structured to provide
among selected awareness of company data beyond awareness.
respondent base Choosing respondents
and developing research
protocol are critical

Consideration % mentioning Survey Response by selected All verticals Survey can be structured
Set Inclusion company as within respondents to ques- to provide valuable data
consideration tion: ‘What brands/ beyond ‘consideration’.
set for goods or companies would Choosing respondents
service purchase you consider for this and developing research
product or service’ protocol are critical

44
Advertising Copy

Developing effective advertising copy is one of the
few responsibilities for which the marketing function
can rightfully claim almost sole ownership internally.
As you might expect, metrics for this responsibility
appear on lots of dashboards. These metrics range
from a focus on ‘persuasion’ and recall to various
measures of characteristics such as ‘news value’,
‘difference’, etc. One interesting metric emerging
in service and retail verticals measures the balance
between equity focused and price /promotion
advertising in the companies media mix. Although
technically more of a media metric, we included it
here under ad copy.

Definition/ Calculation or Verticals where

Advertising Copy Calculation Source of data technique appropriate Problems or concerns
Absolute Recall % of respondent Syndicated Specific technique All categories Research service should
and index of recall audience recalling research varies by third provide norms to permit
key message provider party research indexing versus com-
elements/ index provider. All involve mercials from compa-
versus comparable exposure of com- rable categories
categories mercial to targeted
respondent audi-
ence and query of
points recalled

Absolute % of respondent Syndicated Specific technique All categories Research service should
persuasion audience adjudged research and response provide norms to permit
and index of to be positively provider metric evaluation indexing versus com-
persuasion persuaded by varies by third mercials from compa-
credibility and party research rable categories. A ‘gold
appeal of copy provider. standard’ issue for third
benefit promise party providers

Absolute ‘Different’ % of respondent Syndicated Specific technique All categories Research service should
and index of audience judging research and response provide norms to permit
difference product /service provider metric evaluation indexing versus com-
or company to be varies by third mercials from compa-
positively ‘different’ party research rable categories
from competition provider.

Absolute % of respondent Syndicated Specific technique All categories Research service should
‘Likeability’ and audience judging research and response provide norms to permit
index of ‘likeability’ commercial, provider metric evaluation indexing versus com-
product /service varies by third mercials from compara-
or company to party research ble categories. Likeabil-
be ‘likable’ or provider ity does not necessarily
‘enjoyable’ imply preference

Absolute ‘New % of respondent Syndicated Specific technique All categories Research service should
information’ and audience judging research and response provide norms to permit
index of ‘news’ commercial provider metric evaluation indexing versus com-
provides ‘news or varies by third mercials from compa-
new information’ party research rable categories. News
provider itself not necessarily
persuasive

45
 Definition/ Calculation or Verticals where
Advertising Copy Calculation Source of data technique appropriate Problems or concerns
Engagement Absolute and Various Varies by Most verticals, Emerging discipline.
trended measure syndicated external provider. B2C and B2B Suppliers should
of extent to which and proprietary Usually requires provide norms and
specific media services customized survey validation techniques
alternatives are
engaging and
influencing
consumers

Equity advertising The percent of Internal Capture total Most verticals, Requires internal
as % of total total advertising advertising advertising B2C and B2B policy agreement or
advertising dollars devoted expenditure expenditures for all accounting conventions
solely to equity records channels. Identify to isolate equity building
building with no those expenditures ads
short term demand solely focused on
enhancement equity building.
elements Divide them by the
total

46
Margin Enhancement

This ‘strategic intent’ underscores the complexity of
the metrics issue because in most companies, the
marketing function has little or no direct responsibility
for ‘margin’. In some verticals, however, the marketing
function does play a roll in managing margin as part
of the overall demand creation value stream. In other
verticals, management views ‘margin enhancement’
as a critical indicator of marketing’s ability to position
the product as a superior value in the minds of
consumers.

Margin Definition/ Calculation or Verticals where Problems or

Enhancement Calculation Source of data technique appropriate concerns
Average margin Net margin on Internal records Identify margin All categories Marketing only one
and trended index targeted goods and before corporate factor influencing
services overhead margins

Discount % of sales, units Internal records From third party All categories Marketing only one
avoidance or orders sold at and third party reports or compa- factor influencing
full margin without syndicated reports ny records identify margins and
discount. $ sales of products competitive
/ services sold at conditions
full margin. Divide
by total sales. (or
units or orders)

Willingness to pay % of target willing Survey Response to Many verticals and Marketing only one
a premium to pay a premium survey question or product categories factor influencing
price for product series of questions margins and
or service aimed at eliciting attitudes towards
value judgment value
from consumers
/customers

$’s per unit sold The revenue Internal company Capture total units Verticals where Marketing only one
realized per unit of records sold (hotel rooms marketing is factor influencing
product or service rented/ air line responsible margins and
sold miles sold.) Calcu- for revenue overall demand
late total revenue management
for period. Divide
revenue by units

47
Brand Equity

Brand equity metrics in one form or another appear
on a high percentage of participant dashboards
and rightfully so. This metric captures the most
important long term responsibility of marketing,
the one ‘strategic intent’ for which marketing
ought to demand ownership and accountability.
Metrics in this group come in a variety of types.
Some utilize external third party brand equity
measures from numerous reputable suppliers with
a panoply of interrelated measures and lots of
benchmarks across categories. Other companies
focus monomaniacally on ‘owning’ one benefit
which they measure in the absolute and relative to
competition. Still others develop sophisticated total
equity or preference scores by rolling up a battery
of measures from a ‘brand tracker’. Marketers
should definitely capture brand equity using the
methodology which balances unique category
characteristics, cost and competitive issues.

Definition/ Calculation or Verticals where

Brand Equity Calculation Source of data technique appropriate Problems or concerns
Price premium The price premium Proprietary survey Response to a set of Many verticals Marketing only one
value consumers are methodologies specific queries that and product factor influencing
willing to pay for a isolate the premium as- categories margins and attitudes
brand or service sociated with the brand towards value
delivered by a often using proprietary
specific brand third party techniques
augmented by conjoint
analytical approach

Attribute/benefit Significant differ- Brand tracker type Research which pro- Many verticals Marketing only one
Ownership ence vs. competi- survey vides quantified delta and product factor influencing
tion in brand’s of brand versus com- categories margins and attitudes
identification with petitive set on specific
attribute deemed emotional or functional
important to the benefit
brand

Willingness to % of target willing Survey Response to survey Many verticals Marketing only one
pay a premium to pay a premium question or series of and product factor influencing
price for product or questions aimed at categories margins and attitudes
service eliciting value judg- towards value
ment from consumers
/customers

48
 Definition/ Calculation or Verticals where
Brand Equity Calculation Source of data technique appropriate Problems or concerns
Bonding/ A measure of the Brand equity survey A computed figure Many verticals Consumer/customer
emotional emotional bond based on a battery of and categories attitudes towards
attachment between brand/ responses in several brand/company
company and the proprietary third party influenced by non
customer brand equity models marketing factors (e.g.
usage experience, in-
novation, importance
of functionality

Category driver Significant differ- Brand tracker type Research which pro- Many verticals Marketing only one
ownership ence in brand’s survey vides quantified delta and product factor influencing
identification with for brand on attribute/ categories margins and attitudes
attribute proven benefit computed to be towards preference
to drive category primary contributor to
preference preference in category

49
Purchase Behavior

These metrics and others involving campaign
response appear on a high percentage of
dashboards especially in verticals where the
marketing function spends large amounts of money
to generate an immediate consumer response. In
these verticals and others, the marketing function
spends lots of energy and money on the more
promotional side of the ledger as opposed to equity
building. It should be no surprise that management
wants to know how consumers responded to these
shorter term more tactical efforts. One metric,
however, stands out for having a longer term more
strategic value and that is the annual value of a
consumer or customer. This is a fundamental metric
that all marketers should understand and utilize in
marketing planning. In a few verticals, this metric is
of no value (e.g. power generation turbines bought
every 20 years) but in most categories this is one
metric everyone should capture.

Definition/ Calculation or Verticals where Problems or

Purchase Behavior Calculation Source of data technique appropriate concerns
Frequency of The number of Household panel, Capturing of Many b2C and Marketing function
purchase times a con- loyalty card, purchase behavior B2b verticals and may not control
sumer /customer company sales from various product categories levers most
purchases during records, survey sources valuable in driving
a specific time frequency of visit
period

Annual purchase Sum of all Household panel, Capturing of Many b2C and Marketing function
value of consumer/ purchases in the loyalty card, purchase behavior B2b verticals and may not control
customer past year company sales from various product categories levers most
records sources valuable in annual
purchase

Transaction value The average value Household panel, Capturing of Many b2C and Marketing
of an individual loyalty card, purchase behavior B2b verticals and function may not
consumer /cus- company sales from various product categories control levers
tomer purchase records sources most valuable in
transaction transaction value

50
Marketing Human Resources

This metrics group’s strategic intent is to provide
management with an insight on the marketing
department’s capability building. It is meant to
answer the question: ‘Are we building an effective,
competitive marketing capability internally’?
The subject of capability building is growing in
importance across all functions and verticals.
Marketing is receiving its fair share of scrutiny
in this regard. Measuring the capability of the
marketing human resource is difficult because the
ultimate metric is the competitive impact of the
department’s output. Nonetheless, some companies
are beginning to capture various ‘soft’ and ‘hard’
measures to understand the broad subject of
marketing human resource ‘capability’.

Marketing Human Definition/ Calculation or Verticals where Problems or

Resources Calculation Source of data technique appropriate concerns
Learning Ranking of market- Brand tracker Internal survey with All verticals and Should be com-
organization ing department as type survey rank on scale by product categories pared to other
learning organiza- marketing employees functions and
tion by marketing trend
employees

Department Amount and Brand tracker Internal survey of All verticals and Should be com-
Training quality of training type survey training quality with product categories pared to other
for marketing rank on scale by functions and
personnel marketing employ- trend
ees plus capture of
completed training
hours

Attitude toward Ranking of market- Brand tracker Internal survey with All verticals and Should be com-
department ing department for type survey rank on scale by product categories pared to other
‘investing in me’ marketing employees functions and
on question concern- trend
ing perception of
commitment to
employees

Relative respect Ranking of market- Brand tracker Internal survey with All verticals and Should be com-
ing department type survey rank on scale by product categories pared to other
on relative respect marketing employees functions and
within company versus other func- trend
by marketing em- tions.
ployees

Turnover barometer Ranking of Company Capture personnel All verticals and Should be com-
recent voluntarily personnel ranking of recent product categories pared to other
departed records voluntary departures. functions and
employees Average and trend trend

Training hours Average training Internal Capture # of hours Broadly appropri- Does not speak to
hours /training company in training classes or ate for virtually all quality of training
courses taken by records number of training verticals or its effect on
Marketing staff courses passed. business

51
Marketing Human Definition/ Calculation or Verticals where Problems or
Resources Calculation Source of data technique appropriate concerns
% of marketing The percentage Internal Identify employees Broadly appropri- Must be used as
employees of employees company employed > 2 years. ate for virtually all part of battery
advancing in grade employed > 2 records Identify # advanced verticals of balanced
years who were in grade. Calculate scorecard metrics.
advanced in grade % advancement Compared to
industry norms etc

Turnover A balanced score- Internal Identify separated Broadly appropri- Needs to be

card including company employees place ate for virtually all placed in
turnover among records within measured verticals perspective of
employees< 2 group, derive %. vertical and
years, among Compare over time tracked over time.
employees ranked Rationale behind
superior, among turnover needed
middle manage-
ment tier

52
Public Relations

The somewhat ephemeral nature of the public
relations function has led to a frenzy of metrics
development. Several highly competent industry
groups have developed approaches worthy of study.
As one of our study participants pointed out, the
irony of all these efforts to ‘justify’ public relations is
that everyone intuitively agrees about the power and
credibility of an artful PR campaign. Nonetheless,
it remains challenging to disaggregate the effects
of PR from many other company activities. This
is especially true because many companies lean
hardest upon PR to mitigate the negatives of some
external untoward event. The felonious attempt to
point the ‘finger’ at Wendy’s is a classic example of
the challenges of creating PR metrics. The chart
below offers some creative metrics shared with us.

Definition/ Calculation or Verticals where Problems or

Public Relations Calculation Source of data technique appropriate concerns
AVE’s (advertising The conversion of Third party data Capture of impres- Many verticals Difficult to ascertain
value equivalent) non paid media providers sions by media and product quality of mention,
mentions into type and then their categories context, message
the equivalent of conversion into the delivered or affect on
advertising gross equivalent of paid message recipient.
rating points gross rating points A classic ‘input’
measure

Target Stakeholder Attribute ranking Brand tracker Survey research Many verticals Requires proper
Response among selected type survey of targeted and product selection of respon-
stakeholders stakeholders on categories dents and survey
(Industry thought key industry and technique
leaders, media, company attributes
shareholders, etc)

Critical article The percentage Internal tracking Identify all major Many verticals Requires definitions
response of major industry articles in key and product regarding major
articles especially publications. categories article and company
those with a Compute percent response. Does not
critical viewpoint containing a specific measure cred-
which contain the response from the ibility or impact of
company’s detailed company response only ability
response to respond

Response to # or % of visits on Web tracking ID respondents to Many verticals Does not measure
specific effort website to specific software E-mail campaign to and product effect of message in
communication specific constitu- categories changing attitudes
to targeted ents with targeted only effectiveness in
constituency message. Calculate driving target to web
# targets or % page
responding in sug-
gested manner (e.g.
visits to website)

53
 Definition/ Calculation or Verticals where Problems or
Public Relations Calculation Source of data technique appropriate concerns
Attitude change ∆ in attitudes Web tracking ID respondents to Many verticals Requires careful
among target among test and software E-mail campaign to and product selection of test and
control target specific constitu- categories control groups
audience ents with targeted
message. Measure
attitudes pre and
post among test and
control

Media impact Index of impact Proprietary Third party Broadly available Generally do not
indices including # of measures from syndicated sources for virtually all measure effect or
stories, quality, third parties apply proprietary verticals ‘output’ of PR effort
tonality etc selection and only ‘inputs’ or ‘inter-
evaluation metrics mediate’ metrics or
qualitative measures

Attribute Ranking on Survey research Select target Broadly available PR effort not only
ownership among monadic 5 point audience. Identify for virtually all influence on re-
target audience scale of key attribute to measure. verticals spondent rankings.
strategic attribute Use simple metric Research must
among selected like 5-point monadic focus on attitudes
target audience tied more closely to
PR activities

Awareness of ‘good Awareness Survey research Select target Broadly available Awareness does not
works’ among selected audience. Establish for virtually all necessarily translate
respondents of unaided and aided verticals into improved at-
company’s ‘good awareness of com- titudes
works’ pany’s involvement
in specific cause or
response

Attitudes among Ranking on Brand Tracker or Identify activity Broadly PR effort not only
those aware of brand tracker survey to measure. Use appropriate influence on re-
‘good works’ among those simple metric like for virtually all spondent rankings.
aware/unaware of 5-point monadic. verticals Research must
company ‘good Compare aware ver- focus on attitudes
works’ sus unaware respon- tied more closely to
dents to isolate value PR activities
of ‘good works’

54
Appendix II – Metrics Development Process Appendix
(from October 8, 2005, ANA Marketing Accountability Task Force Findings)

Metrics Development Process (1 of 2)

Identify
Set
Create Marketing Develop
Select Targets
Cross-functional Strategic Data
Metrics for
Team Intent & Strategy
Each Metric
Deliverables
 Include key  Confirm  Select metrics  Determine  Link to
stakeholders strategic for each data marketing
such as intent with desired sources, planning
finance, brand senior outcome frequency of process
management, management collection
market  For each
research &  Translate potential  Define
executive marketing metric, test for calculation
leadership strategic relevance to algorithms
intent into future
 Coordinate explicit marketing  Data
with other initiatives with decisions collection
organizational quantifiable requirements
metrics objectives will likely
initiatives force
prioritization
of metrics

Metrics Development Process (2 of 2)

Share Review
Review Metrics & Calculate
Metrics &
Targets with Current
via Revise
Stakeholders Values
Dashboards Metrics

 Ensure  Calculate  Design  Build review

perceived metrics & metrics & revision
validity, target values hierarchy: steps into
relevance & what metrics ongoing
practicality of  Consider to report at process
selected values relative various
metrics & to prior time organizational  Perform
targets period, target levels analytics to
& competition identify
 Link to other  Use color metrics with
organizational coding (red, greatest
metrics yellow, green) predictive
initiatives as to indicate capability
appropriate state of
metrics  Reduce &
relative to simplify
target as metrics set
appropriate

55
Appendix III
For Integration-IMC, everything is based on claimed
consumer response to a tightly scripted survey
which has been used in dozens of categories
and dozens of countries. They start by evoking a
competitive set of products in the category and
a remarkably broad set of marketing expenditure
What is a Contact?
Each and every opportunity
for a consumer to encounter a brand
The approach then asks customers questions in
four specific areas regarding:
• The informational value of the contact (answer
using the following scale…)
• The emotional value of the contact (answer
using the following scale…)
or contact options. The intent here is to establish
the competitive array against which the brand is
being measured by customers and to understand
all the different contacts from which the customer
is receiving information about the brands in the
category.
• The sales persuasion value of the contact
(answer using the following scale…)
• With what contacts do you associate the brand
in the last few months? (Answer using the
following scale…)
56
Using answers from the first three questions, Once the clout factor is calculated, Integration-IMC
Integration-IMC applies a proprietary algorithm applies the data from the fourth question (With what
to develop what they call a ‘contact clout contacts do you associate the brand?) to create a
factor,’ a value claiming to measure the relative one number score called a ‘brand experience point.’
communication effectiveness of a specific contact By calculating experience scores for all brands
in a specific category. This allows Integration-IMC to in the category, Integration-IMC is able to provide
rank order the engagement capability of a contact in marketers with a ‘brand experience share.’
a category. Not surprisingly, the relative ‘clout’ of a
specific contact (TV, newspapers, events, websites,
etc.) varies dramatically from category to category
and from country to country.

The table below shows a schematic representation of the Integration - IMC concepts:

Contacts Associations CCF BEPs BEPs BEPs BEPs Total

w/ Brand A weighting Brand A Brand B Brand C Category

TV Ad 40% 70 2800 3000 1500

W.O.M 30% 60 1800 2500 1000

Mail from Brand 20% 50 1000 2000 1200
(...)
Tele-text message 40% 20 800 500 400
Total BEPs 6,400 8,000 4,100 18,500

BES 35% 43% 22% 100%

CCF = “Contact Clout Factor” is a single indicator for the capacity of contact to
influence consumer attitudes towards brands in a given category.
BEP = “Brand Experience Points”.
Number of brand contact associations weighted by the CCF.
BES = “Brand Experience Share”.
Single indicator for the perceived weight of all brand activities relative to competition.

March 07 ● For Pacific Conference ● By Oscar JAMHOURI: CEO Integration Group of Companies

• Note how contact associations are multiplied • Note that the total BEPs for the category =
by the contact clout factor to compute Brand 18,500
Experience Points (BEPs). (i.e. For TV 40% X • This gives a Brand Experience ‘share’ of 35%
70 = 2800 BEPs for Brand A (6400 / 18,500) for Brand A
• Note how Brand A’s BEPs from various
Channel contacts add up to 8400.
(2800+1800+1000+800 = 8400)

57
Appendix IV – 2006 ANA/MMA Marketing Accountability
Survey Results

1. Which of the following best describes your role within the marketing organization? (Select all that apply)

Decisions on and allocation

43% (65)
of marketing spending
Influence of marketing spending allocation 53% (80)

Analyzes results of marketing programs 60.3% (91)

Develops marketing strategies and goals 53.6% (81)

None of the above 5.3% (8)

Total Respondents 151

(skipped this question) 4

2. Please indicate your level of satisfaction with your company’s ability to do the following

1 2 3 4 5 6 7
Very Very Response
Don’t know
dissatisfied satisfied Average
Gain agreement
on a definition of 7% (7) 18% (18) 18% (18) 20% (20) 25% (26) 11% (11) 2% (2) 3.79
“marketing ROI”
Measure Marketing
9% (9) 26% (27) 18% (18) 23% (23) 14% (14) 9% (9) 2% (2) 3.40
ROI
Improve the accuracy
5% (5) 11% (11) 23% (23) 34% (35) 16% (16) 10% (10) 2% (2) 3.82
of data
Improve the
4% (4) 11% (11) 23% (23) 35% (35) 17% (17) 9% (9) 2% (2) 3.84
timeliness of data
Improve marketing
6% (6) 18% (18) 23% (23) 30% (30) 15% (15) 5% (5) 2% (2) 3.54
technology support
Act quickly in
response to
8% (8) 24% (24) 21% (21) 21% (21) 20% (20) 4% (4) 3% (3) 3.45
marketing ROI data
to improve results
Change established
marketing strategies
and budgets if ROI 10% (10) 17% (17) 14% (14) 24% (24) 22% (22) 10% (10) 2% (2) 3.70
reports show they
aren’t effective
Improve the
effectiveness of your 3% (3) 13% (13) 25% (25) 33% (33) 14% (14) 10% (10) 1% (1) 3.77
planning process
Total Respondents 102
(skipped this question) 53

58
3. How satisfied are you with your company’s ability to…

1 2 3 4 5 6 7
Very Very Response
Don’t know
dissatisfied satisfied Average
Understand the
sales impact of each 12% (12) 11% (11) 20% (20) 28% (28) 16% (16) 9% (9) 3% (3) 3.65
campaign
Eliminate unprofit-
able marketing 10% (10) 20% (19) 28% (27) 19% (18) 10% (10) 9% (9) 3% (3) 3.40
programs
Improve the targeting
5% (5) 8% (8) 19% (18) 23% (22) 23% (22) 9% (9) 13% (13) 4.31
of the media buy
Understand the sales
impact of each ele-
7% (7) 20% (19) 28% (27) 25% (24) 9% (9) 7% (7) 3% (3) 3.44
ment of the market-
ing mix
Determine the cor-
rect level of spending
9% (9) 23% (22) 27% (26) 18% (17) 16% (16) 4% (4) 3% (3) 3.34
to optimize sales or
profits
Develop statistical
models to evaluate
the sales impact of 15% (14) 23% (22) 28% (27) 17% (16) 8% (8) 6% (6) 3% (3) 3.13
alternate marketing
plans
Understand how
marketing impacts
18% (17) 24% (23) 21% (20) 18% (17) 11% (11) 5% (5) 4% (4) 3.13
the financial value of
brand equity
Allocate marketing
16% (16) 16% (16) 22% (21) 21% (20) 15% (15) 3% (3) 6% (6) 3.36
budget for innovation
Total Respondents 99
(skipped this question) 56

59
4. How important are each of these types of metrics to the senior executives of your company

1 2 3 4 5 6 7
Very Very Response
Don’t know
dissatisfied satisfied Average
Branding
measurements
5% (5) 10% (10) 11% (11) 23% (23) 20% (20) 29% (28) 1% (1) 4.34
(e.g. awareness,
perception, intent)
Marketing impact on
1% (1) 1% (1) 13% (13) 20% (19) 18% (17) 46% (45) 1% (1) 4.95
sales
Customer value
measurements (e.g. 2% (2) 15% (15) 15% (15) 24% (23) 22% (21) 14% (14) 7% (7) 4.20
lifetime value)
Total Respondents 98
(skipped this question) 57

5. Please indicate whether you track the following metrics and if so, how important each is to measuring the
branding effectiveness of your company’s marketing efforts.
1 2 3 4 5 6 7 8
Very
Very Don’t Don’t Response
dissatis-
satisfied know Track Average
fied
Changes in brand
1% (1) 4% (4) 7% (7) 9% (9) 27% (26) 32% (31) 0% (0) 20% (20) 5.53
awareness
Changes in
attitudes toward 1% (1) 2% (2) 6% (6) 9% (9) 26% (25) 38% (37) 0% (0) 18% (18) 5.61
the brand
Changes in
1% (1) 4% (4) 11% (11) 11% (11) 20% (20) 32% (31) 3% (3) 17% (17) 5.40
purchase intention
Changes in market
2% (2) 4% (4) 6% (6) 14% (14) 17% (17) 46% (45) 2% (2) 8% (8) 5.28
share
Number of GRP’s
4% (4) 1% (1) 11% (11) 18% (18) 29% (28) 13% (13) 6% (6) 17% (17) 5.17
delivered
Reach/frequency 1% (1) 1% (1) 9% (9) 21% (20) 27% (26) 19% (18) 4% (4) 19% (18) 5.36
Changes in the
financial value of 2% (2) 5% (5) 6% (6) 16% (16) 13% (13) 8% (8) 9% (9) 40% (39) 5.94
brand equity
Total Respondents 98
(skipped this question) 57

60
6. Please indicate whether your company tracks the following metrics and if so, how important each is to measuring
the sales effectiveness of your company’s marketing efforts
1 2 3 4 5 6 7 8
Very
Very Don’t Don’t Response
dissatis-
satisfied know Track Average
fied
Response rate 1% (1) 7% (7) 5% (5) 20% (20) 24% (24) 35% (34) 1% (1) 6% (6) 4.99
Coupon redemption 11% (11) 9% (9) 6% (6) 14% (14) 16% (16) 16% (16) 4% (4) 22% (21) 4.90
Store/dealer traffic 9% (9) 7% (7) 6% (6) 9% (9) 10% (10) 18% (17) 6% (6) 34% (33) 5.52
Incremental sales
revenue generated
1% (1) 2% (2) 4% (4) 16% (16) 25% (24) 38% (37) 3% (3) 10% (10) 5.40
by marketing
activities
Total sales
revenue generated
0% (0) 1% (1) 6% (6) 14% (14) 26% (25) 40% (39) 2% (2) 11% (11) 5.48
by marketing
activities
Cost per sale
4% (4) 4% (4) 9% (9) 13% (13) 21% (20) 25% (24) 6% (6) 18% (17) 5.29
generated
Number of leads
8% (8) 4% (4) 3% (3) 9% (9) 21% (20) 25% (24) 9% (9) 21% (20) 5.44
generated
Cost per lead
9% (9) 4% (4) 9% (9) 9% (9) 18% (18) 17% (17) 10% (10) 22% (22) 5.29
generated
Marketing ROI 2% (2) 6% (6) 4% (4) 18% (17) 21% (20) 32% (31) 6% (6) 11% (11) 5.26
Total Respondents 98
(skipped this question) 57

61
7. Please indicate how important, if at all, the following metrics are in measuring marketing’s affect on customer value.
1 2 3 4 5 6 7 8
Very
Very Don’t Don’t Response
dissatis-
satisfied know Track Average
fied
Recency,
frequency, 1% (1) 6% (6) 18% (17) 20% (19) 13% (12) 18% (17) 12% (11) 12% (11) 94
monetary value
Customer
2% (2) 1% (1) 5% (5) 22% (20) 20% (18) 33% (30) 7% (6) 11% (10) 92
profitability
Lifetime value of a
1% (1) 4% (4) 14% (13) 12% (11) 16% (15) 34% (32) 4% (4) 15% (14) 94
customer
Annual value of a
2% (2) 4% (4) 6% (6) 20% (19) 16% (15) 33% (31) 4% (4) 14% (13) 94
customer
Number of
products/services
2% (2) 10% (9) 9% (8) 14% (13) 29% (27) 24% (22) 2% (2) 10% (9) 92
owned/used per
customer
Retention 2% (2) 2% (2) 4% (4) 15% (14) 23% (21) 46% (43) 3% (3) 4% (4) 93
Total Respondents 95
(skipped this question) 60

8. Which of the following best describes marketing accountability efforts in your organization?

No formal effort 9.3% (9)

Loosely coordinated grass roots effort 9.3% (9)

Siloed efforts within the
marketing department 24.7% (24)

Team within the marketing department 20.6% (20)

Team of marketing and finance 8.2% (8)

Cross-functional team 27.8% (27)

Total Respondents 97
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62
9. In your organization, the champion for this initiative is:

CEO 10.4% (10)

CFO 0% (0)

CMO 20.8% (20)

SVP/VP of Marketing 28.1% (27)

SVP/VP Finance 3.1% (3)

SVP/VP of Research 2.1% (2)

Director of Marketing 13.5% (13)

Director of Finance 1% (1)

Director of Research 6.2% (6)

There is no champion 7.3% (7)

Other (please specify) 7.3% (7)

Total Respondents 96
(skipped this question) 59

10. Which best describes how this marketing accountability program is funded in your organization?

No separate budget 28.4% (27)

Funded out of working marketing dollars 28.4% (27)

Funded out of research dollars 15.8% (15)

Shared by marketing and research 13.7% (13)

Separate budget that is
controlled by finance 9.5% (9)

I don’t know 4.2% (4)

Total Respondents 95
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63
11. As a percentage of your organization’s total marketing spend, how much budget is allocated toward marketing
accountability or marketing effectiveness activities (including supporting tools, technology and data)?

< 0.5% 23.7% (23)

0.5%-1% 14.4% (14)

1% - 2% 9.3% (9)

2% - 3% 12.4% (12)
3%-4% 4.1% (4)
4%-5% 6.2% (6)
>5% 4.1% (4)
I don’t know 25.8% (25)

Total Respondents 97
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64
12. How involved are the following people in defining metrics and determining methodologies to evaluate marketing
contributions?
1 2 3 4 5 6 7
Very Very Response
Don’t know
dissatisfied satisfied Average
My company’s
25% (24) 20% (19) 11% (11) 16% (15) 11% (11) 11% (11) 5% (5) 96
financial staff
My company’s
strategic planning 26% (25) 11% (10) 8% (8) 21% (20) 11% (10) 14% (13) 9% (9) 95
group
My company’s market
12% (11) 5% (5) 10% (9) 17% (16) 17% (16) 34% (32) 5% (5) 94
research staff
My company’s IT
46% (43) 14% (13) 18% (17) 9% (8) 4% (4) 4% (4) 5% (5) 94
staff
Advertising or direct
28% (26) 10% (9) 14% (13) 14% (13) 18% (17) 11% (10) 6% (6) 94
marketing agency
Media agency 28% (26) 10% (9) 16% (15) 13% (12) 13% (12) 11% (10) 9% (8) 92
Management
consultant (e.g., 63% (59) 5% (5) 6% (6) 9% (8) 5% (5) 1% (1) 11% (10) 94
McKinsey, Bain)
Marketing
measurement
specialists (e.g., 54% (51) 5% (5) 4% (4) 6% (6) 9% (9) 15% (14) 6% (6) 95
MMA, Dratfield
Group)
Research company
(e.g., Millward- 44% (42) 7% (7) 8% (8) 7% (7) 13% (12) 9% (9) 11% (10) 95
Brown, IPSOS –ASI)
Total Respondents 96
(skipped this question) 59

13. How would you characterize the relationship between your finance and marketing departments?

No meaningful relationship 8.7% (8)

Frequent conflicts over budget and strategy 15.2% (14)

Some cooperation 44.6% (41)

Full cooperation and an open dialogue to establish
28.3% (26)
metrics and methodologies for marketing ROI
Don’t know 3.3% (3)

Total Respondents 92
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65
14. How would you characterize the relationship between your marketing and strategic planning departments?

No meaningful relationship 8.8% (8)

Frequent conflicts over budget and strategy 5.5% (5)

Some cooperation 35.2% (32)

Full cooperation and an open dialogue to establish
25.3% (23)
metrics and methodologies for marketing ROI
Don’t know 25.3% (23)

Total Respondents 91
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66
15. Please indicate the level to which these statements describe, or don’t describe, your organization

1 2 3 4 5 6 7
Doesn’t
Describes Don’t Response
describe
completely know Average
at all
Senior management
feels confident in fore-
23% 14% 22% 22%
casts of how marketing 8% (7) 5% (5) 5% (5) 3.66
(21) (13) (20) (20)
activities will impact
sales
Senior management
22% 13% 17% 24% 15%
views marketing as an 5% (5) 3% (3) 3.91
(20) (12) (16) (22) (14)
expense
Senior management
views marketing costs 14% 23% 17% 26% 17%
2% (2) 1% (1) 4.03
as an investment in (13) (21) (15) (23) (15)
brand equity
Marketing budgets are
established based on 23% 33% 19%
7% (6) 4% (4) 10% (9) 3% (3) 4.42
historical spending (21) (30) (17)
levels
Marketing budgets are
established by deter-
mining the spending 20% 14% 20% 15% 21%
8% (7) 2% (2) 3.35
level necessary to (18) (13) (18) (14) (19)
achieve the company’s
revenue goals
Marketing budgets are
established by running
“what if” scenarios at 24% 20% 15% 14% 15%
4% (4) 7% (6) 3.16
different budget levels (22) (18) (14) (13) (14)
to evaluate sales and
profit at each level.
If it were necessary to
cut marketing spend-
25% 16% 12% 12% 21%
ing by 10%, I would 8% (7) 5% (5) 3.32
(23) (15) (11) (11) (19)
be able to forecast the
impact on sales.
If it were necessary to
cut marketing spend-
ing by 10%, I would
13% 18% 18% 23% 15%
know which activities 9% (8) 4% (4) 3.92
(12) (16) (16) (21) (14)
I could cut and have
the smallest impact on
sales.
Total Respondents 92
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67
16. Which of the following types of marketing accountability techniques does your company use and how often are
each of these types of models updated?
1 2 3 4 5 6
Less than Semi- Response
Annually Quarterly Don’t use Don’t know
annually annually Average
Brand Equity models 13% (12) 20% (18) 9% (8) 11% (10) 37% (34) 10% (9) 91
Customer Equity models 14% (12) 13% (11) 7% (6) 9% (8) 42% (37) 16% (14) 88
Predictive models for
22% (20) 10% (9) 2% (2) 27% (25) 32% (29) 7% (6) 91
direct response
Recency, frequency,
13% (12) 11% (10) 2% (2) 22% (20) 37% (34) 14% (13) 91
monetary value models
Customer lifetime value
25% (22) 12% (11) 3% (3) 8% (7) 40% (36) 11% (10) 89
models
Models predicting a
customer’s most likely 14% (13) 9% (8) 3% (3) 12% (11) 53% (48) 8% (7) 90
next purchase
Models predicting which
customers may attrite or 13% (12) 13% (12) 7% (6) 13% (12) 44% (40) 9% (8) 90
cancel their service
Models identifying likely
prospects based on their
20% (18) 10% (9) 10% (9) 12% (11) 38% (34) 10% (9) 90
similarity to current users
of a product or service
Portfolio marketing
17% (15) 14% (13) 7% (6) 12% (11) 37% (33) 13% (12) 90
spending models
Marketing mix models
(allocation across
marketing types e.g.
22% (20) 24% (21) 12% (11) 16% (14) 21% (19) 4% (4) 89
advertising, consumer
promotion, channel or
trade promotion, etc.)
Media mix models
(allocation across
different media types, 17% (15) 26% (23) 12% (11) 16% (14) 21% (19) 9% (8) 90
e.g., TV newspaper,
online, etc)
Total Respondents 91
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68
17. Below are common data requirements. How satisfied are you with the following?

1 2 3 4 5 6 7
Very Very Response
Don’t know
dissatisfied satisfied Average
Accuracy of
8% (7) 17% (15) 13% (12) 24% (22) 20% (18) 7% (6) 11% (10) 3.97
syndicated data
Access to internal
9% (8) 13% (12) 16% (14) 27% (24) 19% (17) 12% (11) 3% (3) 3.84
data
Timeliness of data
9% (8) 18% (16) 20% (18) 26% (23) 17% (15) 7% (6) 3% (3) 3.57
to drive decisions
Alignment of data 12% (11) 20% (18) 24% (22) 20% (18) 16% (14) 3% (3) 4% (4) 3.34
Quality of data 7% (6) 14% (13) 19% (17) 30% (27) 20% (18) 6% (5) 4% (4) 3.77
Everyone working
from the same 12% (11) 23% (21) 20% (18) 17% (15) 22% (20) 4% (4) 1% (1) 3.31
data
Total Respondents 90
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69
18. Below are types of marketing technologies. Where is your company in the stage of deploying the following
technologies?
1 2 3 4 5
Complete or Response
No plans Planning Piloting Rolling out
upgrading Average
Marketing Dashboards 31% (27) 23% (20) 21% (18) 9% (8) 16% (14) 2.56
Marketing data warehouse or
data mart (e.g., Oracle, NCR 40% (36) 21% (19) 7% (6) 9% (8) 23% (21) 2.54
Teradata)
Marketing automation or
campaign management (e.g., 51% (45) 22% (20) 9% (8) 6% (5) 12% (11) 2.07
Unica, E.piphany)
Business intelligence (e.g.,
46% (41) 18% (16) 10% (9) 7% (6) 20% (18) 2.38
Business Objects, Cognos)
Data mining, modeling and
predictive analytics (e.g., 37% (33) 22% (20) 6% (5) 10% (9) 25% (22) 2.63
SAS, SPSS)
Marketing simulation and
43% (39) 18% (16) 12% (11) 7% (6) 20% (18) 2.42
optimization (e.g., MMA)
Offer/campaign optimization
(e.g., Marketswitch, SAS/ 67% (60) 16% (14) 6% (5) 7% (6) 4% (4) 1.65
Optimization)
Web analytics (e.g.,
43% (39) 17% (15) 8% (7) 13% (12) 19% (17) 2.48
Coremetrics, Omniture)
Marketing planning and
resource management (e.g., 72% (65) 8% (7) 4% (4) 6% (5) 10% (9) 1.73
Aprimo, SmartPath)
AdID 86% (76) 5% (4) 2% (2) 1% (1) 6% (5) 1.35
Total Respondents 90
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70
19. What is your company’s total 2005 U.S. marketing and advertising budget?

Less than $5 million 27.5% (25)

$5 million to less than $15 million 8.8% (8)
$15 million to less than $30 million 11% (10)
$30 million to less than $50 million 6.6% (6)
$50 million to less than $100 million 9.9% (9)

$100 million to less than $200 million 4.4% (4)

200 million to less than $500 million 14.3% (13)

$500 million or more 11% (10)

Don't know 6.6% (6)

Total Respondents 91
(skipped this question) 64

20. What percent of your marketing budget is spent on:

1 2 3 4 5
Less than (25%) to less (50%) to less (75%) or Response
Don’t know
25% than 50% than 75% more Average
Media advertising (TV,
30% (27) 22% (20) 14% (13) 22% (20) 12% (11) 91
newspaper, etc.)
Direct marketing (Direct mail,
54% (47) 15% (13) 8% (7) 10% (9) 13% (11) 87
telemarketing, email, etc.)
Total Respondents 91
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71
21. Which of the following best describes your job title?

Chief Marketing Officer 6.5% (6)

Executive Vice President of
Marketing or Advertising 3.3% (3)
Senior Vice President of 2.2% (2)
Marketing or Advertising
Vice President of Marketing or Advertising 22.8% (21)

Director of Marketing or Advertising 15.2% (14)

Brand or Product Manager 0% (0)

Assistant Brand or Product Manager 0% (0)

Associate Brand or Product Manager 4.3% (4)

Marketing or Advertising Manager 8.7% (8)

Marketing or Advertising Assistant manager 2.2% (2)

Other (please specify) 34.8% (32)

Total Respondents 92
(skipped this question) 63

22. What functional area do you work in?

Executive 13% (12)

Marketing 43.5% (40)
Advertising 6.5% (6)
Brand Management 4.3% (4)
Product Management 3.3% (3)

Information Technology 2.2% (2)

Strategy 0% (0)

Research 23.9% (22)

Other (please specify) 3.3% (3)

Total Respondents 92
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72
23. Which of the following best represents the 2004 gross revenue for your company?

Less than $25 million 16.7% (15)

$25 million to less than $100 million 6.7% (6)

$100 million to less than $500 million 10% (9)

$500 to less than $1 billion 5.6% (5)

$1 billion to less than $5 billion 21.1% (19)
$5 billion to less than $10 billion 14.4% (13)
$10 billion or more 17.8% (16)
Don't know 7.8% (7)

Total Respondents 90
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73
24. Which of the following best represents your company’s industry

Advertising or Marketing Services 8.7% (8)

Apparel 3.3% (3)

Automotive 1.1% (1)

Computers & Technology 5.4% (5)

Consumer electronics 0% (0)

Financial services 9.8% (9)

Food & Beverage 10.9% (10)

Government 0% (0)

Health & Beauty 6.5% (6)

Healthcare 5.4% (5)

Household Cleaning 1.1% (1)
Manufacturing 5.4% (5)
Media/publishing 5.4% (5)

Personal Care 2.2% (2)

Pharmaceuticals 4.3% (4)
Retail 6.5% (6)
Restaurant 1.1% (1)
Telecommunications 2.2% (2)

Toys 0% (0)

Travel 0% (0)

Other (please specify) 20.7% (19)

Total Respondents 92
(skipped this question) 63

74