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Marketing measurement progress stalls, ANA finds

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After three years of significant gains, marketers now report a drop in confidence about their ability to measure marketing ROI and collaborate with other departments to create common success metrics.

"The industry has stalled and may have stumbled," John Nardone, chief client officer of Marketing Management Analytics, said last month during a session at the Association of National Advertisers' Marketing Accountability Conference in Palm Beach, Fla. The day-and-a-half conference, in its fourth year, attracted about 160 attendees, a mix of b-to-b and b-to-c marketers.

The fourth annual ANA/MMA Marketing Accountability Study, conducted by research company Guideline Inc. in July among 214 b-to-b and b-to-c marketers, found that fewer than a third of the respondents are satisfied with their organizations' ability to gain agreement on marketing ROI, measure marketing ROI or react quickly to marketing ROI data.

The survey results were summarized by Nardone and Ed See, MMA's chief operating officer.

While marketing metrics has become a hot topic in the last several years, the most recent ANA survey indicated a number of worrisome declines. For example, in the 2006 survey, 28% of respondents said they could forecast the impact of a 10% reduction in marketing budget on sales, only 18% said this in this year's survey. Likewise, the percentage saying they used cross-functional teams from such departments as sales and finance declined from 45.3% in 2006 to 20.1% in 2007. And only 22% said they had "full cooperation and an open dialogue with finance" to establish metrics and methodologies for marketing ROI.

While there may be many causes, Nardone and See suggested the lack of a financial commitment to measurement was one factor. The most recent survey found that 57% of marketers invested less than 1% of their working marketing budget into accountability and that only about half (49%) even had a dedicated budget for accountability.

Considering these statistics, Bob Liodice, president-CEO of ANA, called once again for the marketing profession to reinvent itself in light of the new, technological reality sweeping both media and measurement. "That which was once considered beyond the scope of quantification has bowed to the reality that everything can, in fact, be measured," Liodice said in his opening keynote.

Some marketers are, however, making headway.

Edward Abrams, VP-integrated marketing communications at IBM Corp., took off his hat as conference chairman of the ANA event to describe the global IT company's 18-month internal project, in conjunction with consultancy EMM Group, to create a common set of marketing metrics across IBM's hardware, software and services businesses.

Abrams said the work started with an audit, which found more than 300 marketing measures at IBM. "We winnowed them down to three elements [addressing] ROI, influence and brand value," he said.

IBM now uses 16 common metrics to track these three areas. "But we recognized we couldn't ask people to give up their favorites," Abrams added, noting the 16 core measurements are used in conjunction with many more that serve a "diagnostic function."

Moreover, IBM does not have one set of marketing ROI goals, Abrams said. Instead, "ROI goals are aligned to the different goals and objectives of the HW, SW and services businesses themselves," he said.

Abrams said there is a cultural shift within IBM, too. "People think twice about cutting the marketing spend, realizing the ROI impact and what it could mean for the pipeline three or four quarters later."

Another marketer making changes in what and how it measures marketing is Kimberly-Clark Corp., which decided it needed to eliminate duplication, especially as it embarked on a global brand program.

"There are both short-term goals, such as driving cash flow, and long-term ones, such as shareholder growth and new customers," said Suzanne Sears, VP-global market development, who said the new procedures will start going into effect next month and then roll out to global locations. The program includes an ROI tool and a dashboard to predict the return on marketing investments, she said.

Sears and several other speakers at the ANA conference addressed staffing changes in connection with creating metrics-based organizations. "Don't underestimate the change management and training," Sears said, adding, "I believe some people will fall by the wayside."

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