Marketing Effectiveness should be a corporate function, not a side project

A client kindly pointed me to a cool new section by the folks at MarketingWeek . It's called The Language of Effectiveness and bundles a growing body of articles on the topic on a central landing page. (Disclaimer: It is sponsored by 尼尔森 and Meta but I don't hold that against them ?? - I am citing only non-sponsored content in this post).

The section was kicked off end of last year with a big survey among >1,600 brand-side marketers -- and Dear readers, I was shocked...

The Dismal Science

You can read all the details yourself but the ugly, slightly exaggerated exec summary of mine is this:

In many companies, Marketing Effectiveness is still an ad hoc side project of the campaign management or insights team and results barely make it to the CMO desk.

More than 60% of respondents say that effectiveness measurement has become a more important driver of decisions over the last 3 years. But it seems that the way it is done in most firms, doesn't match the ambition:

• A third of respondents say that effectiveness is checked ad-hoc in a campaign context:

• Almost 72% say that their firm is lacking Effectiveness capabilities in-house esp. around Data and Analysis
• I am not surprised that only 30% of CEOs have access to Effectiveness results but I AM SURPRISED that the number for CMOs is not much higher:

In Search for a Home

One of the key deficiencies seems to be that Marketing Effectiveness lacks ownership, it lacks a corporate home:

Only ~16% of respondents strongly agreed that Marketing Effectiveness is a well-defined function within their business, with a clear structure, detailed processes and chain of accountabilities in place

And all of the above yields this:

Value. Delivered.

Wherever I have looked from the inside together with Analyx? or outside-in conducting interviews for our books: Whenever ME is run by a well-managed corporate function and a dedicated team, value creation has been immanent. This is true from A like Allianz via C like Castrol , D like Diageo (very prominently) all the way to Z like Zalando .

I don't have a broad enough sample to calculate the average ROI of a corporate marketing effectiveness function and I am not at liberty to share individual numbers. But what I am happy to share is my - subjective - view on the Top 9 factors that determine its success:

1. Marketing effectiveness should be a dedicated function, not a side project of consumer insights, let alone BI.
2. It should be run by (quantitative) Marketers with a keen interest in Data Science. It should not be run by Data Scientists.
3. It should be run by people that truly speak Marketing and Media (see next chapter on the role of language) and are trusted by local markets.
4. The function should report as directly as possible to the CMO. I have seen it work as part of Marketing Controlling (CFO line) but less well on average.
5. The function should not necessarily sit on the marketing money for the local markets but help them justifying budget needs to the CMO.
6. Modeling and Data work can be in-house sitting with this function if the size of the company's Ad Spend and the number of countries and brands justify that. But: Modelers are scarce and run fast if they are bored. And modelers want in-house gurus. Thus, think twice if you can really utilize an in-house team.
7. The ME function must deeply understand how the models work ("white box", not even grey is enough). And: Modeling shouldn't be with the media agency (I know this sounds obvious coming from me but we all know why...)
8. One of the absolute key jobs of the ME function is definitions, taxonomy, data labels and the like. This is the most underestimated driver of measurement success.
9. But probably the #1 - #3 jobs of this function are Communication, communication and communication. Upwards, downwards, sideways. With agencies, with local markets, with brands, with CMOs, with modelers, with data owners - and with tons of smart people with some gut feel about media elasticity ??

Language is Important!

...which brings us to my closing remark: I am thankful that Marketingweek is running this section and that they appropriately called it The Language of Effectiveness. Not only because words shape our thinking. But because I have learned in almost 20 years of Applied Marketing Science that value is only created when the messages are delivered well - and over and over again.

As an example, in every SpendWorx project, we invest a considerable amount of the total project time working with in-house ME folks on Playbooks. These are not software manuals or Data Science papers. These are guides written for Marketers how the results have to be read, interpreted and turned into action: What could be reasons why an ROI is negative? What can you do about it and how quickly can we recalibrate to see if it worked?

The Language of Effectiveness is only partially the language of Mathematics.