At the same time, company leaders should start thinking and planning for the long term. What metrics do they need? Which analytical approaches can provide insight into them? The critical issues of analytics are reproducibility and reliability. The marketing ROI capability cannot be outsourced, and eventually, even if calculations are outsourced, internal expertise will be needed to manage the process and ensure the quality of the outsourced service.
The third consideration in choosing analytical approaches is the marketing objectives for the company’s brands. Ideally, marketers set brand objectives based on where the brand is in its life cycle. They then determine which vehicles can best achieve those objectives. Different campaigns employ different marketing vehicles that produce different levels of data availability and involve different levels of investment, and thus require the use of different analytical approaches.
For example, launching a new product typically requires large investments to build brand awareness. The marketer would choose vehicles such as billboards, Web sites, and sponsorships in support of that goal, and an analytical approach — probably the purchase funnel — that is focused on a qualitative metric. Conversely, if a company were trying to boost purchase on a mature brand in a competitive market, it might choose consumer coupons, TV ads, or Internet direct sales and use an analytical approach — in this case, modeling — that measures purchase behavior more directly. In general terms, brand-building efforts that seek to affect customer perceptions generally suggest attitudinal analytics. Objectives focused more directly on sales and volume generally suggest behavioral analytics.
When marketers fully develop their analytical prowess, they can use multiple analytical approaches to optimize their return on spending and stimulate accountability and creativity. In weak economic conditions, this capability is not only critical to maintaining a strong corporate commitment to marketing — it may well be essential to the future of the company as a whole.
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Leslie H. Moeller is a partner with Booz & Company in Cleveland. He leads the firm’s North American work in the consumer, media, and retail industries, and previously led the firm’s global efforts in marketing and sales.
Edward C. Landry is a partner with Booz & Company with two decades of experience in consumer industries. Based in New York, he focuses on strategy development, business transformation, and sales and marketing effectiveness across a broad range of consumer businesses.
This article was adapted from The Four Pillars of Profit-Driven Marketing: How to Maximize Creativity, Profitability, and ROI, by Leslie H. Moeller and Edward C. Landry, with Theodore Kinni (McGraw-Hill, 2009).