Column: Econometrics -- Effectiveness for the Record

Too many marketers are failing to improve their marketing effectiveness because they incorrectly view measurement as their most significant challenge, and so charge their research organizations to fix the problem. In doing so, they underestimate the challenges of building new skills, changing established processes, managing data, and acquiring tools.

Successful marketing effectiveness initiatives are transformational. They are almost always cross-functional in nature, and require a consistent focus over a period of years to ensure organizational buy-in and adoption. Unfortunately, few organizations can free up the skills and dedicated resources to drive these changes over time. As a result, companies committed to improving their marketing effectiveness should engage a partner who can supply the necessary skills, focus and resources, and provide them consistently over time.

Marketing organizations are familiar with an Agency of Record (AOR) model. They choose an AOR as a long-term partner, and charge them with establishing a consistent approach for various marketing activities across the organization. The AOR provides expertise, staff, consistency, and organizational memory even as client marketing staffs rotate and turn over. An AOR for marketing effectiveness would work in much the same way.

The marketing effectiveness AOR should be able to supply seven core skills:

>> Business Metrics Design: A balanced scorecard of marketing metrics must be carefully crafted to drive successful behaviors and to avoid the law of unintended consequences. Poorly designed metrics can provide incentives for bad behavior.

>> Organization and Process Design: An accountable marketing organization will have to have strong processes, and the organizational structure to support them. A good AOR will understand different organizational models and how they can impact the effectiveness initiative. When necessary, they should be able to design new processes or lead a re-organization effort.

>> Project Management: A strong marketing effectiveness program is likely to have multiple interlocking initiatives or programs, impacting several functional groups. In this environment strong pm skills are a prerequisite for success.

>> Marketing Analytics: Marketers consider measurement one of their most vexing challenges. Even with metrics defined, strong analytic skills are required to derive information from data and interpret results. Importantly, as creative new marketing vehicles are adopted and tested, the AOR must also be "analytically creative," developing new approaches to address changing tactics.

>> Data/database Design: Data availability is a foundational requirement for marketing effectiveness. The AOR must bring a variety of skills to help clients identify what data to capture, how to store and maintain it, and how to govern it over time. it organizations are often charged with these tasks, but marketing data can present unique challenges not found in financial or supply chain data. Specialized marketing data skills are usually required.

>> Systems Integration: The marketing effectiveness aor does not have to be a systems integrator. However, they must have the technology experience to articulate marketing needs and translate them into functional requirements for technology and tool selection. Ideally, they bring focused experience with a variety of marketing analytic tools and systems so that they can add practical perspective to the selection process.

>> Change Management: No organization can afford to grind to a halt as it adapts to new processes and tools. Transformational change must be carefully managed to ensure business continuity. Likewise, change must be managed to ensure that it "sticks." Change programs must include adoption metrics and follow-ups so the organization does not slide back into old habits.

For most companies, a successful marketing effectiveness program will be a phased multi-year endeavor that requires investment of time and resources. The payout on a well-run program should be significant -- at least a 15 percent improvement in marketing effectiveness. To design and manage such an effort, marketers will have to choose a partner who can guide and support them throughout the program. A strong marketing effectiveness AOR that brings the necessary skills, resources and experience can be the key to success.

John Nardone is executive vice president, product development and marketing, for Marketing Management Analytics. (

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