ANA explores marketing accountability

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Measurement strategies and best practices were the topics of conversation last month at the Marketing Accountability Forum hosted by the Association of National Advertisers in New York.

"Accountability is the No. 1 issue in marketers' minds," said Barbara Bacci Mirque, executive director of the ANA, pointing to results of a member survey conducted in July, prior to the July 20 conference. "CEOs are beginning to demand more accountability from marketing, as they have from other disciplines such as finance," she added.

Despite an increase in measurement there is a concern, Mirque said. "Marketers are measuring, but they are not really confident they can act on the results."

To help its members define common terms and best practices for measurement, the ANA recently convened a task force on marketing accountability.

The task force has two teams-one for b-to-c and one for b-to-b-that will seek information from members on the practices and metrics they are using for marketing accountability. "Our objective is to come up with a glossary of terms and best practices for sponsorships, branding, trade promotions, etc.," Mirque said.

The ANA presented a preliminary report on the task force during the forum, and will deliver a final report during its annual conference in October. Currently the task force is distilling and aggregating information from member companies, Mirque said.

Also at the forum, the ANA, Forrester Research and Marketing Management Analytics (MMA) presented final results on a survey of marketing accountability.

The report, titled "Moving Along the Marketing Accountability Curve," was based on an online survey of 143 marketers at U.S. companies, and follow-up qualitative interviews conducted in April. Forrester conducted the study on behalf of MMA and the ANA.

Of those marketers surveyed, 24% have a marketing budget of $200 million or more; 18% have a marketing budget between $50 million and $200 million; 17% have a marketing budget between $15 million and $50 million; and 36% have a marketing budget of less than $15 million. The rest did not know what their marketing budget was.

The survey found that 66.5% of respondents said measuring marketing ROI is important or very important, yet 59.5% of respondents reported being dissatisfied with their company's ability to measure marketing ROI.

Also, while 57.4% of marketers said it is important or very important to gain agreement on a definition of "marketing ROI," 51.1% of respondents said they were dissatisfied with their company's ability to do so.

In another important indication of the gap between what marketers say is important and what they are actually doing with measurement, 65.1% of respondents said it is important or very important to understand the sales impact of each campaign. However, 53.9% of respondents said they were dissatisfied with their company's ability to measure the sales impact of each campaign.

Respondents were also asked to characterize the relationship between their finance or strategic planning department and their marketing department. Only 10% reported a meaningful relationship; 14.6% reported frequent conflicts over budgeting and strategy; 46.2% reported some cooperation between finance and marketing; and 25.4% reported full cooperation and an open dialogue to establish metrics and methodologies for marketing ROI. The rest didn't know.

The survey found that marketers that reported being confident in their ability to measure marketing ROI use a variety of measurement models, including predictive models for direct response (53.3%), customer lifetime value models (50%), brand equity models (46.7%) and recency, frequency and monetary value models (46.7%).

From the results of the survey, MMA developed a capability maturity model that determines where marketers are in the process of defining metrics around brand equity and marketing performance, and managing their businesses against those metrics on a consistent basis.

In the maturity model, level one companies are defined as "agency hostages."

"Level one companies don't have a lot of capabilities for measurement, so they have to look to their agencies to tell them how to measure," said John Nardone, chief client officer at MMA, who presented the survey findings at the conference.

Level two companies are "brand builders," who understand the importance of brand equity but have not developed effective measures.

Level three companies are "efficiency experts." They have developed metrics, but the analytics look backward and not into the future.

Level four companies are "customer converts," with visibility into customer touch points across the enterprise. Marketing goals are directly aligned to business objectives.

Level five companies are "profitability pros," where the marketing process is defined, structured and valued as a corporate asset.

"Very, very few companies have reached this level," Nardone said. Based on the survey, only about 2% of marketing organizations are at level five. Most companies (61%) are at level one or two.

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