Opinion: measuring marketing's success

Marketing is still regarded as a cost rather than an investment. But if it is to change this view it will have to get to grips with the many rich sources of data at its disposal.

By David Arrowsmith, SAS UK

Only 14 percent of the FTSE 100 has a marketing director on the board. In the FTSE 250 it gets worse. It’s not just the UK - if you look to the Fortune 500, the figure only improves slightly.

Why is this? As marketers we own the product strategy, product marketing - hell, we own the customer our collective paymaster. Whether you subscribe to the 4P’s or the 4C’s or a mixture of the two, this is marketing - B2B, B2C or B2B2C. And yet 86 percent of the FTSE 100 don’t see a need to have a marketing director on the board.

There are many theories that I have patiently listened to over the years as our credibility and requirement to be represented on the board was questioned. Explanations ranging from “the CEO has a marketing background” to “sales looks after marketing” and - probably the most bizarre - “the CFO has a handle on the marketing budget” have all been eloquently put, but still I have struggled with "why?" Why are we underrepresented on the board when we have such a pivotal role to play in the success of any organisation?

The marketing department is loud, has a gifts cupboard, organises the away day, sends stuff to customers, talks to the press when something goes right or wrong, runs campaigns, gets leads (sometimes) and is usually made up of some pretty nice people. In short, we are still regarded as a cost rather than an investment. When things get tight, training and marketing budgets are the first to be cut. Fact.

Blunt measures of success

The old adage “When business is good, sales are brilliant, and when business is bad, marketing is failing and the leads generated are useless” is one we are all familiar with in one form or another. Sadly, in the past, it may have been true.

Our problem, as marketers, is just that. Historically we have relied on pretty blunt measures of success - sales mainly - measures of what had happened at a single level of understanding. Depending on your line of business and customer buying cycles, these could be anything from months (off the page advertising, etc.) to years (capital equipment or software) out of date. Marketing reporting has also been sporadic, tending naturally to highlight our moments of genius and bury bad news like a Labour spin doctor.

This was when, collectively, we moved to our real killer in terms of credibility with the board - anecdotal evidence. I still bear the scars inflicted as a young marketer of getting a great result, not through industry leading innovation, but through chance. The lack of reliable information available to me meant that I misunderstood the reasons of my success, which subsequently led me to making a bad call on our next campaign. In fact, flushed with false comprehension underpinning my success I deeply embarrassed my then marketing director by arranging press interviews with industry journalists, who offered their much more accurate explanations. Not my finest hour.

Today it is not only possible but critical to corporate success that marketing can report as effectively on its activities as our colleagues in sales and finance. We also need to be able to demonstrate the same levels of understanding and agree consistent definitions of the reporting metrics that are used. We will not win an argument with the CFO over the definition of profit. We can however bring understanding and clarity to corporate decision making if we produce the right metrics in a meaningful way for our colleagues. The CEO will not want to see the same information as the CFO and the head of sales.

From famine to feast

Marketing now has incredibly rich sources of data. In not much more than 15 years we have moved from famine to feast. Through web tracking we can watch where our prospective customers land on a page, where they hover, for how long and at what point they choose to buy or move away from our offer to even knowing where they go on the site. Slowly we are increasing our knowledge and ability to track prospects and customers through their multi-channel engagement with us from ATM to branch to web, etc.

We have access to geo-demographic, behavioural and attitudinal data. We have insight into the contents of shopping trolleys and purchases made in both credit and debit. There is no shortage of data but turning that into usable information is now the challenge. Presenting that information is a greater challenge still. Our analysts, agencies and marketing teams juggle and produce minor miracles of insight and understanding but we must embrace this and present it to the business, warts and all, in an easily digestible and ultimately actionable fashion.

Reinforcing marketing’s credibility within the organisation is key to putting customer needs and aspirations at the forefront of corporate thinking. We have to meet the challenge of presenting our newfound depth of knowledge and understanding to all areas of the business. Given that this is a fair representation, maybe the greatest challenge of all is knowing when to demand our seat at the boardroom table.

David Arrowsmith is strategy manager for customer intelligence at SAS UK