Accountability…it can be a dirty word, especially when there are no clear expectations. But more and more, everyone has to answer to someone. Managers need to show their superiors how marketing dollars are being invested, and the results that come out of those investments. As the economy continues to make headlines, the demand for accountability will only increase. The problem becomes that accountability is a big, gaping hole at most organizations.

The CMO Council reports that the top challenge facing marketers is being able to better quantify and measure the value of marketing programs and investments. More than half of marketers feel this way, and nearly 55% admit that they do not track and measure the effectiveness of marketing spend or that they have minimal “line of sight” between business results and marketing efforts.

Given the importance of accountability, why is there no standard of practice for measuring it? How can marketers ensure that theirs aren’t the first budgets to get slashed for lack of validation? How can the puzzle pieces fit together to show a direct link between marketing and sales?

The Accountability Problem
Current measurement methods for evaluating marketing performance include one of three types:

  • Marketing’s impact on sales, or ROI
  • Agency metrics like brand awareness
  • Marketing’s impact on sales and brand equity

A joint survey by the Lenskold Group and Kneebone Marketing revealed that 26% of marketers use ROI or other profitability metrics for evaluating their marketing investments. Another 38% use only traditional metrics with no profitability measures and 31% use some financial metrics but no profitability measures.

The current measures are leaving much to be desired. Only 17% of marketers believe their marketing ROI measurement ability is as good as it needs to be or a real source of leadership, meaning that 83% believe it to be lacking! Only 28% give themselves positive ratings on basic capabilities like measuring incremental impact of marketing initiatives, and only 26% scored themselves positively on being able to diagnose performance gaps.

A survey by the ANA found that 23% of marketers are dissatisfied with the accountability metrics available to them. This stems largely from frustration with top management. Only 23% of marketers feel that management communicates a clear definition of marketing accountability. In addition, about one-third of marketers feel that marketing goals are not aligned with corporate goals, and a stunning one-third report that their company does not have any written goals at all!

Even if expectations are clearly communicated, marketers face challenges in developing effective accountability programs. The need to design efficient, sustainable internal processes, determine the departments that need to be involved at each stage of planning and execution, and identify metrics that accurately track the effectiveness of marketing program components are significant hurdles that must be overcome.

Applying Measurement Metrics
Establishing a process for taking the pulse of the company on an ongoing basis is critical in overcoming the challenges that exist. An effective accountability program often starts with two fundamental questions:

  • What decisions need to be made?
  • What information is needed to help make those decisions?

An accountability program is only useful if it keeps efforts on track to reaching specific goals. Not everything that can be measured matters. (Not everything that matters can be measured, either!) Metrics used within an accountability program can include media exposure metrics like ratings or clicks, attitudinal data like awareness or image, and behavioral measures like response rates and actual sales. So what should be measured?

To truly realize the value of marketing metrics, companies must move beyond backward-looking metrics to forward-looking insights that guide business decisions. There is a certain evolution that exists in measurement, and it goes something like this…

Activity-based metrics are the starting point for most companies because they’re easy to measure. These include things that can be counted, such as impressions, press hits and click-thrus; however, they offer no information on the business impact of these activities.

Operational metrics start to consider monetary expenditures, focusing on improving efficiency of the organization. These include things like cost per lead, campaign payback and CPMs; however, they do not take effectiveness into account.

Outcome-based metrics are more sophisticated, focusing on business outcomes like market share, customer lifetime value and brand equity. These metrics consider effectiveness as well as efficiency.

Leading indicators determine the likelihood of a particular outcome based on specific actions. For example, market share increases in relation to advertising share-of-voice gains.

Predictive metrics are the most advanced and involve developing models to predict business outcomes. These are the hardest to utilize as they involve creating formulas that take into account multiple variables to determine future successes.

When determining which metrics to use, it is important to ensure that the required information will be accessible, transparent, easy to employ and timely for multiple departments, including marketing, finance and research.

Informing Corporate Decisions
A marketing dashboard is a great tool for assessing the outcomes of marketing activities. The dashboard compiles multiple pieces of information and combines them into one visual representation of the company’s health, providing a snapshot of actual performance against goals. Every metric included provides a specific perspective on the firm’s business.

A good dashboard facilitates action by offering insight into performance, fostering decision-making and aligning strategy with implementation. There are some things to keep in mind when assembling a dashboard. First, it should be tailored to specific goals, objectives and strategies, meaning that each company’s dashboard will be unique. Every metric should appear within context of performance against a specific goal. Ultimately, marketing performance will hinge as much on organization clarity, alignment and stakeholders as it is does on research and analytics.

MayoSeitz Media’s Words of Advice
If nothing else, this article should have provided some food for thought. We know that there is a greater need for accountability. We know that current measures are lacking. We know that there are a multitude of metrics which can be utilized to measure marketing activities, depending on the decisions that are reliant upon them. We also know that the right metrics vary by company and should be based on corporate goals.

While we can’t offer a magic formula for measuring accountability, MayoSeitz Media would like to offer our readers some “Accountability Best Practices.”

First, align key stakeholders on marketing’s role in order to define success. Is the goal to attract new customers? Increase consumer satisfaction or loyalty? Drive traffic to a website or retail location? Build brand preference? If you don’t know the answers to these questions, you can’t have an effective accountability program that will appease management.

Next, measure what you should, not just what you can. Don’t rely on the easy metrics. Strive for those that can forecast results, predicting outcomes instead of explaining them. Determine what you need to know and whether existing metrics can provide that information. Keep it simple at first, adding in more metrics later – once you know what you don’t know.

Finally, commit to providing results, proactively setting and measuring goals and benchmarks along the way.

Measurement can be a powerful tool when properly structured, but a severe hindrance when based on unclear goals or incomplete, inaccurate or outdated information. If you’re putting in the time and effort, do it right and do it because it will tell you something you didn’t already know. Don’t just do it to say you did it!