CHICAGO: Marketers are still looking to financial metrics when assessing their campaigns, despite the advance of digital media and the development of more sophisticated measurement tools.
Paul Farris, professor of business at the Darden School of Business, spoke at a recent "webinar" organised by the American Marketing Association and MarketingNPV, and covered by Geoffrey Precourt, Warc's US Editor, here.
He was one of the authors of the book Marketing Metrics: 50+ Metrics Every Executive Should Master, a revised edition of which will be released later this month, carrying a new subtitle: The Definitive Guide to Measuring Marketing Performance.
According to Farris, this change was motivated by the fact that "people wanted the five most effective metrics, the ten most effective. We kept responding, 'It depends on the type of business you're running.'"
In updating the book, its authors polled 194 marketing executives in the US and Western Europe, with more than half of this group holding job titles like "director", "manager", "head" or "vice president" of marketing.
This panel was drawn from a broad range of industry sectors, including firms in the banking, consumer goods, consultancy, government, healthcare and retail categories.
"The goal of survey was to determine what metrics are considered the most important in monitoring and managing their business," said Farris.
"I'm sorry to say that marketing metrics barely made it into the top ten. When we asked our sample of managers to rate usefulness, the highest scoring metrics were the most that had to do with finance."
Some 91% of participants regarded net profit as being a "very useful" barometer, with return on investment on 71%, and customer satisfaction and target revenues both on 71%.
Data related to sales and annual growth occupied much of the rest of the top ten, with only loyalty joining customer satisfaction among the widely-used analytic tools that were grounded in marketing.
However, these two measures are among the "least refined metrics we have," Farris observed.
More broadly, this shows that efforts by researchers to prove the value of marketing beyond earnings and revenue, and the opportunity to use digital media to gain real-time insights, still need to gain ground.
"Much work still needs to be done to market marketing metrics. There are undoubtedly some useful metrics that are currently undervalued by senior managers," Farris argued.
"Our research suggests that the message of the value of metrics such as customer lifetime value or return on marketing budgets still needs to be communicated more vigorously to end users."
To read Geoffrey Precourt's coverage of this AMA?MarketingNPV webinar in full, click here.
Data sourced from Warc; additional content by Warc staff