Marketing Accountability: How to Measure Marketing Effectiveness

Ana Isabel Canhoto (Senior Lecturer, Oxford Brookes University Business School, Oxford, UK)

Journal of Product & Brand Management

ISSN: 1061-0421

Article publication date: 20 September 2011




Canhoto, A.I. (2011), "Marketing Accountability: How to Measure Marketing Effectiveness", Journal of Product & Brand Management, Vol. 20 No. 6, pp. 499-500.



Emerald Group Publishing Limited

Copyright © 2011, Emerald Group Publishing Limited

This is a “how to” book that aims to “empower marketing executives to justify their actions to both CEOs and chief financial officers” (p. 3) by presenting a three‐level methodology that links actions to outcomes.

The first level concerns the process for linking marketing activities to long‐term shareholder value. The authors explain how marketing is essential to: target the right customers and develop a compelling value proposition, which will lead customers to choose the firm over its competitors, and deliver superior returns through greater market share and/or higher margins, thus translating into higher dividends and/or higher share price.

The second level focuses on the link between marketing expenditure and outcomes. It does so by exploring how particular actions contribute to improving the critical success factors that are part of the firm's strategy for each planning unit, and that will translate into revenues.

The third and final level relates to the micro measurement of promotional activities. It addresses issues such as the link between promotion and brand awareness, the buying cycle, or cross‐channel behaviour.

The majority of the book seems to be concerned with the first level. I say “seems” because the separation between the levels is not clear‐cut and there is certainly no direction in the table of contents as to which chapters relate to which level, which might be seen as a weakness in a “how‐to” book.

More specifically, chapter 1 (“It's tough at the top – CEOS are finally demanding accountability for marketing expenditure”) documents the rise of intangible assets as a percentage of corporate value and the difficulties this trend brings in terms of measuring the value and risk of these assets. The chapter also notes the difficulty of linking marketing investment with financial returns, and the pressures to produce forecasts and budgets, thus setting the context for the remaining of the book.

Chapter 2 (“Strategic marketing planning – a brief overview”) takes a detour from the main topic of the book to introduce the marketing planning process. This chapter is aimed at readers unfamiliar with strategic marketing planning, and it would be better positioned in an appendix.

Chapter 3 (“A three‐level marketing accountability framework”) starts with a brief discussion of what exactly counts as expenditure and value, before presenting the three‐level model that underpins this book. The first level is presented in section 3.3.1, and the reader is directed to chapters 4 and 5 for further detail. The second level is presented in section 3.4, and the third level in section 3.5, with references to chapter 11 for further detail.

Chapter 4 (“A process of marketing due diligence”) explores a crucial step in marketing: understanding the market and deciding what parts to target and how. It presents a thorough discussion of the rationale for marketing due diligence, including topics such as risk, returns, and the capital markets.

Chapter 5 (“The marketing metrics model and process”) provides more detail of the metrics model previously mentioned in chapter 3. Specifically, McDonald and Mouncey outline the five key components of the model: corporate performance, market segments, impact factors, marketing and other actions, and budget resources. The first component is briefly discussed in section 5.2.1. The second component is explored in chapter 6 (“Segmentation – the basic building block for markets”). Chapter 7 (“How to become the first choice for the customers you want”) is concerned with the third factor. Chapter 8 (“Turning strategy into action, and measuring outcomes”) addresses the fourth and fifth components.

Chapter 9 (“Delivering accountability – finalizing the metrics strategy”) is about choosing the metrics that matter the most for the organisation. The authors present a useful checklist of points to consider when developing a metrics strategy.

Chapter 10 (“Why data quality can make or break accountability”) takes a step back from explaining the methodology to discuss the importance of developing a company‐wide data management strategy. This chapter also provides an introduction to the principles of data management strategy. For those marketers who might feel tempted to say that such technical aspects are not of concern to marketing, the authors say that quality data is “a vital foundation for marketing strategy” (p. 216) and to measure performance.

Chapter 11 (“Measuring the effectiveness of multichannel strategies”) is authored by Hugh Wilson. This chapter links metrics with the buying cycle and across multiple channels, with references to a few simple statistical techniques. This chapter is very different in style and structure from the preceding ones – for instance, it does not start with a summary. It is, however, very well organised and it is easy to follow.

Chapter 12 (“Valuing brands”), too, is written by a guest author, this time David Haigh. Again, it follows a different style and structure from the rest of the book. This chapter starts by repeating some of the messages delivered in chapter 1, about the importance of intangibles and the challenges of measuring such assets. From there, it moves on to describe how brands – a particular kind of intangible assets – add value to the business. It also introduces briefly key concepts such as brand equity measurement, sensitivity analysis, or the link with the marketing mix. It is a good introduction to the issues around, and the process of, brand valuation. This chapter would benefit from the addition of a few references of further reading on the topic.

Marketing Accountability is largely the product of seven years of research into global best practice on marketing accountability methodologies, including work “with many of the best companies in the world to produce and test the methodologies set out in this book” (p. 3). It is a bit disappointing, however, that this close collaboration did not translate into rich case studies and examples to illustrate the issues discussed throughout the book. Instead, the examples provided are very generalist and the kind one finds in most textbooks. It would be really useful for the reader to follow one or two case studies throughout the book to see how the various concepts translate into practice, and how the various steps built on each other.

In this book, McDonald, Mouncey and their guest authors cover a broad range of topics, models, and concepts that are essential for any marketing manager ‐ from segmentation, to the development of action plans, the importance of quality data and the “how to” of brand equity measurement. It is a useful book, well‐grounded in prior research, and linking the strategic and operational aspects of marketing. Marketing Accountability does not offer a simple solution, but it certainly provides valuable and useful arguments to fend off criticism of the lack of accountability of marketing, as promised in the introduction to the book. It is worth reading, and worth navigating the less than logical structure.

I would say that this book is a bit too complex for the absolute beginner, and not detailed enough for the expert. Rather, it is a useful summary of key concepts, and provides enough references for the interested reader, who wants or needs to know more about specific topics, to pursue.

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