IDC summit evaluates marketing measurement

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Marketers are committed to demonstrating the value of marketing to their companies' bottom line, although they have differing approaches to the function, according to presenters at IDC's Marketing Performance Measurement Summit in Santa Clara, Calif., last month.

About 150 marketers attended the conference to discuss strategies, trends and priorities for measuring the performance of marketing.

While the summit was geared toward technology companies, IDC tried to balance the agenda with presentations by traditional b-to-b companies such as General Electric Co. and BAX Global, a logistics and transportation company.

One of the hot topics at the conference was the role of the marketing operations manager, a relatively new position that is responsible for developing and managing processes for marketing performance measurement, dashboard development and marketing infrastructure.

According to IDC research released last September, roughly 65% of technology companies now have some kind of marketing operations function in place.

During a panel on effective strategies for marketing performance measurement, CMO Advisory Research VP Rich Vancil asked the audience how many had a marketing operations manager or equivalent position at the organization. Only about a third said they did.

Panelist Ann Ruckstuhl, VP-corporate marketing at Sybase Inc., said, "This is something I am personally struggling with-designating program and project managers for marketing operations management."

She said the main issue is determining whether the job should be a separate function or part of the whole organization.

"At Sybase, it is the latter. Everyone is doing it right now," Ruckstuhl said.

She added that her marketing organization has developed five strategies to improve marketing performance measurement, including the following: prioritization of goals; shared performance measures; marketing investments tied to tangible awareness and demand generation goals; quarterly reviews; and designating program and project managers for campaigns.

Panelist Stephanie Acker-Moy, VP-Internet and marketing services at Hewlett-Packard Co., said HP is developing a culture of measurement through the direction of Cathy Lyons, who was named exec VP-CMO last June.

"One of the things we've started to do is set some very concrete measures that our CMO has started to ask for on her dashboard and roll it out throughout the organization," Acker-Moy said. "These measures are being asked for monthly and quarterly."

Some of the metrics HP uses to measure marketing performance are marketing spending as a percentage of revenue, sales and lead conversion, and brand value metrics.

Jayne Plunkett, VP-marketing analysis and planning at GE Insurance Solutions, agreed with Ruckstuhl and Acker-Moy on the importance of establishing metrics for measuring marketing performance.

However, she added, "We can measure a lot of things, but they have to be actionable. Looking at whether it is up or down doesn't help. What action do I take to improve that measure?"

In a panel moderated by Michael Gerard, research director of IDC's CMO Advisory Research, financial executives talked about the relationship between finance and marketing at organizations, and how finance measures the value of marketing.

Jeremy Adamson, global marketing and communications controller at Symantec Corp., a security software company, said much of his time is spent on marketing program approval and expense monitoring, particularly with the variable spend in marketing.

Another important area is making sure the company is in regulatory compliance.

"This wasn't even on our scope two years ago, and now it has become at least 40% of what we do," he said.

"At a higher level, we think part of our job in marketing finance is the advocacy of the marketing organization, the benefits they bring to the rest of the organization, P&L modeling, expense mix and work force planning," he added.

Patrick Adamiak, VP-strategy and operations, technology solutions group at HP, said that while the finance department reports directly to the controller, there is a liaison from the finance group who sits on the global marketing staff and acts as a controller for that business.

"In terms of how we interact with marketing, we're involved in strategic business planning, and we work to set marketing metrics, people/program ratios and high-level guidepost metrics," Adamiak said.

"In terms of day-to-day operations, we work to develop metrics around the actual execution of campaigns, country to country and in support of ROI," he said.

Brad Schneider, VP-CFO at MicroSat Systems, a 5-year-old aerospace company, offered a slightly different perspective.

"We are striving to leverage R&D, which doesn't lend itself to payoff the next day," Schneider said.

"My focus as CFO is on ROI, not based on specific percentage valuations of each metric that we're tracking, but more in terms of how do we enter emerging markets and sneak up on competition as a small company." 

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