The morning presentation I attended at MPlanet included Wharton marketing professor Dave Reibstein, Yahoo CMO Cammie Dunaway and Kraft marketing EVP Paula Sneed. The theme was tying marketing metrics to financial outcomes, and both practitioners provided good examples of how they’re doing that.
Reibstein kicked it off by explaining why marketers need to tie intangibles such as brand and customer values back to the ultimate metric: stock price. He neatly summarized the crux of the challenge for marketers: a rapid return on investment. “If you invest in R&D, it’s amortized over the life of the project. If you invest in a plant, it’s depreciated over the expected life of that plant. But if you invest in marketing, it’s an expense – you’re accountable for that in the year that you spend it.”
There was plenty of practical advice about aligning your programs with the business goals and speaking the same language as the CFO – easy to talk about, but hard to do. “The best way to get credibility for marketing is to sign up for delivering revenue,” Dunaway said.
Both Dunaway and Sneed rely heavily on a comprehensive set of metrics to track their performance, but they both cautioned about getting too hung up on analyzing the data.
“If you’re focusing only on things you can quantify, you will not grow, because all you’re doing is looking backwards,” said Sneed. “We’re trying to get our teams to develop more observational and predictive insights. These sometimes defy quantitative measures.”
Dunaway says the trust that allows you to do that type of hard-to-measure experimentation must be earned over time. “You have to go deep into the numbers initially to build credibility. Over time you gain permission to do more intuitive things.”
Dunaway recently sensed her team was spending too much time analyzing data, which was slowing down their decision-making. So she had a bunch of “trust me” cards printed up and handed them out to the team. They can use them when they have a good idea that’s not easily measurable. “It’s their way of saying, ‘Please don’t make me do 16 more spreadsheets. Just trust me,’” Dunaway explained.