Marketing
Issue No. 18 - August/September 2004
Critical measures
That old [perhaps apocryphal] quote "I know that 50% of my advertising doesn’t work, but I don’t know which 50%" highlights one of the big challenges to marketing that has been around for a long time – the measurement of marketing performance and marketing effectiveness. While measurement of the performance of marketing communications is an important issue, there are other areas of marketing, such as product development, pricing and distribution channels that also need to be evaluated.
Further, the overall role of marketing as a value creator requires measurement, both to demonstrate its role and, like any area of business management, to provide the feedback mechanisms to achieve continuous improvement.
Finally, as a central part of marketing there is a need to understand the critical role of the brand, as an important tangible asset for the organisation and as a vital part of the means by which value is generated.
Distinguished marketers such as Tim Ambler [Marketing and the Bottom Line, 2003] point out that while selling may be about creating cash flow now, marketing is more about creating future cash flows, and a powerful brand is like a reservoir of that future cash flow. If this is true, then it is very important to have measures, or metrics, that help us manage and maintain our brands and our marketing strength.
But how do we go about measuring the performance of a brand and how do we integrate the many possible metrics that are available to assess overall marketing performance?
On the one hand there are simple indices, such as overall sales, or market share; then there are more complex measures related to communications, such as ‘share of voice’ or ‘share of mind’; finally there are complex measures such as brand value and brand equity [which are different measures].
The Australian Marketing Institute (AMI) believes that it is in the interests of better business performance as well as in the interests o...
