Over the past few weeks, we've had some terrific dialogue online here. It's been a pleasure to track along with the excellent commentary and the insightful feedback from the readers. Now I suppose I get a turn under the microscope of the blogosphere. So I'll try to start provocatively...
I've been building marketing measurement and accountability processes for Global 1000 companies for a few years now. We've worked in virtually every industry group - from telecom to retail, financial services to industrial, software to packaged goods. Some come to measurement with great eagerness and anticipation. Others enter kicking and screaming, with fear and trepidation.
Interestingly, there's no correlation between industry and preparedness. Financial service marketers, with their great depth of data on customers, are no more ready to measure marketing impact than retailers.
Nor is there any correlation between size and sophistication. Despite the fact that they have all the requisite tools and resources, some of the worlds biggest marketers struggle the most with measurement. And not always for reasons relating to bureaucracy. Most often, it's lack of alignment between influential people WITHIN marketing that dooms their efforts to failure.
But there is a seemingly strong correlation between culture and the adoption of marketing accountability. I'm not speaking about a culture of "accountability" (althought that helps) as much as I am a culture of collaboration. In fact, our experience suggests that the single greatest predictor of sound insight into the payback on marketing investment is a collaborative relationship between marketing and finance. Period. If the two are working together, clarity emerges quickly - rooted in the mutual understanding that assumptions need to be made and properly stakeholdered around the organization. But if the two are working at odds, stalemate occurs. Marketing has "models" that clearly show the huge ROI on their investments. Finance drives trucks through the holes in the logic and/or math, undermining their credibility.
I suppose the key learning is that, as a marketer, you can unilaterally develop the world's most sophisticated measurement tools, and still die a cruel death on the stage of quarterly budget cuts. Chances are you'll always be missing some elements of data in your arguments that will force you to either adopt techniques which ignore those "blind spots", or make overly-facilitating assumptions. Bottom line: there's no such thing as a bullet-proof business case for marketing investment.
True, many of the finance people we interact with struggle to break free of "cost accounting" mode, which has an unfortunate tendency to cause them to seek the immediate payback from every investment. But they are surprisingly adaptable to other ways of looking at issues of marketing payback IF they are consulted collaboratively, and not just presented with 100 page powerpoint summaries of the latest readings from the marketing mix model, supplemented with detailed brand awareness and consideration scores from 14 countries.
Until marketing and finance (and sometimes sales) can align on what is knowable/measurable, there is always a natural suspicion that something's being left out. This suspicion is often interpreted by us marketers as a slap at our personal integrity. But in reality, it's just sound conservative skepticism intended to keep the CEO and CFO from going to jail.
For this reason, I would argue that it is the role of marketing to take the lead in bridging the gap. The marketers understand the subtleties of their craft much better than the finance people ever could. Consequently, it is their role to share knowledge and "teach" (versus "sell") - even in the face of that healthy skepticism. And in the pursuit of answers to the difficult questions that inevitably emerge, both disciplines come to a richer understanding of what is knowable and how to get at the priority unknowns. This is the necessary foundation of trust which, in the short term, creates a bridge to action in the face of business uncertainties.
So what's your experience been? Have you found particularly effective ways of engaging finance in a productive dialogue on marketing effectiveness and efficiency? Or are you struggling to relate to them in a meaningful way? Let's hear some of your suggestions for how to make more progress in measuring marketing's impact on the bottom line.