The prevailing wisdom in marketing today is that achieving the greatest levels of performance requires true, closed-loop, customer-level insight into the effectiveness of marketing programs. If you can see a detailed, causal chain through the complete demand-generation process and correlate steps and interactions in that chain to account-level customer spending, you can then analyze how various marketing activities contribute to final results. Further, if you can analyze your marketing at such a granular level, you can tie spending to specific outcomes and can continuously tune your overall marketing formula at all levels.
I’ve touched on this imperative in past blog posts. So no argument here. In fact, as a tenured marketer (and now as a team member at a marketing technology company), it’s exciting to look around and witness the rapid evolution in marketing technology that is moving us closer to this reality.
It also goes without saying that in this environment, plenty is written about the drive for marketing accountability.
Yet there is something subtle that gets missed and that I would argue should be the greater focus in the accountability dialogue. It is the inherent and holistic upside for marketers of having an accountability mindset – i.e., the positive transformation that results from embracing a new approach to marketing.
I call it the ‘halo effect’ of marketing accountability.
And I believe it’s increasingly critical that we as marketers both understand and embrace it.
What is this halo effect?
Let me explain.
Michael Dunn, who with co-author Chris Halsall recently wrote The Marketing Accountability Imperative, helps us to understand the halo effect via an April post on BrandChannel.com.
Dunn wrote:
Senior management continues to push marketers to demonstrate a strong return on investment, demanding more accountability and evidence that marketing investment is driving business growth.
It requires marketers to demonstrate disciplined planning, rigorous tracking and evaluation and, above all, continuous improvement in performance. They must also show cause and effect, quickly diagnose the root causes of any spending performance issues and make timely, fact-driven decisions to improve returns.
Call it accountable marketing performance …
Dunn’s comments give a sense of how subtle the halo effect is. He starts out by commenting on the reactive need to defend marketing investments, but he switches to the importance of marketers proactively taking their game to the next level. As I said, it’s a subtle point, but the same transformation in this brief passage is what seems to result from the pressure of external accountability.
In fact, I’ve run across an increasing body of evidence indicating that when marketers take the time do this they not only improve through the tuning of their marketing formula, per se, but they also become more proactive and aggressive as marketers. They take their game to the next level.
This is what I think of as the halo effect of marketing accountability.
The pressure to be more accountable causes marketers to look inwardly at how they approach their work and ultimately transforms their entire approach. This means that for marketers – as painful as accountability may seem – it’s really the key to becoming a marketing rock star.
What is the evidence of this halo effect of marketing accountability?
As I indicated, I’ve run across an increasing body of evidence pointing to this halo effect – albeit sometimes not where you’d expect to find the evidence.
Here are a few data points:
> Correlation between aggressive adoption of strategic marketing technology and budgetary source (via my own research): I got an initial sense of this effect as I was analyzing data from some of my recent graduate research at Wisconsin, prior to my current role at Silverpop. I deployed a quantitative survey of marketers with 131 complete response records, broken down into 64% corporate-side marketers, 28% agency-side marketers and 8% non-agency contractors.
One very-clear result, which I noted in a previous piece on marketing measurement and ROI analysis, was that when the group was “… asked to rate the overall ‘aggressiveness’ of their organizations’ marketing technology investments, … [c]orporate-side marketers overwhelmingly believe their organizations are not aggressive.” This certainly speaks to the malaise inside marketing organizations when it comes to investing in and building systems for measuring the impact of marketing programs and spending. Yet there was an interesting result when I analyzed the research in a slightly different fashion.
When responses were correlated to where marketing technology budgets lie within an organization, a new story emerged. When marketers are directly responsible for their spending on marketing technology, they tend to skew toward being ‘not aggressive’; however, when the budget shifts to IT or to a business unit P&L – i.e., with external accountability on this investment – the organization becomes more aggressive in its use of marketing technology.
Source: Adam Needles, Propelling Brands (original); click to enlarge graphic
The initial conclusion I took from this result was that marketers are more aggressive in leveraging technology when they are externally accountable to profitability. But I was interested in getting more data points, and so I dug in further …
> Correlation between the traits of ‘highly effective and efficient’ marketing organizations and the calculation of marketing return on investment (via Lenskold Group / Marketsphere research): I saw further evidence of the halo effect in the results of the recent “2009 Marketing ROI & Measurements Study,” which was led by marketing ROI guru and Marketing ROI author Jim Lenskold (and who I also cited in my previous marketing measurement and ROI analysis piece).
The study highlighted a strong correlation between organizations that measure dollar-level, net present value (NPV) accountability of marketing spending and that take on what Lenskold identifies as the traits of ‘highly effective and efficient’ marketing organizations:
[F]irms reporting that they calculate ROI metrics are almost three times as likely to report their marketing to be both “highly effective and efficient” compared to firms using only financial or traditional marketing metrics (19% vs. 7% and 4%, respectively). As noted in the 2008 research report, the use of marketing ROI makes a huge difference in the ability to manage efficiency in addition to effectiveness. While firms using other financial metrics or traditional metrics may describe their marketing as “somewhat effective but not efficient,” the firms using marketing ROI metrics scored much higher on the combination of highly or somewhat effective and efficient (a combined 73% vs. 40% of those using traditional metrics).
The study also highlighted the gap between accountability practices of both highly effective and efficient firms and firms ‘expecting to outgrow their competitors’, versus laggards in both cases:
Looking at the analysis from another perspective, we find that adoption of marketing ROI to calculate marketing effectiveness among the top tier “highly effective and efficient” firms is much deeper at 54% compared to 23% of all other firms. Among companies expecting to outgrow their competitors, adoption is running at 30% compared to 20% use by companies expecting to grow slower than competitors.
> Correlation between the use of holistic ‘lead scoring’ and the ability to be successful in linking marketing activities to sales outcomes in the demand-generation process (via Silverpop internal research): I used a chart in a recent presentation I gave to B2B marketers at the Online Marketing Summit in Portland and Seattle. (BTW – I also did a blog post on this presentation on the Silverpop Demand Generation blog, if you’re interested in reading more about this.) It provides even more evidence of this halo effect.
Silverpop did an internal survey of B2B marketers within the past year. The questions included a focus both on whether or not marketers use lead scoring and also on their priorities as a marketer. My colleagues’ analysis of this survey correlates the two with some interesting results.
Of the various areas of focus, the response ‘Ensuring leads convert to opportunities’ was more likely to be selected by marketers that score leads. This aligns with marketers that are thinking more holistically about the demand chain and focusing not as a marketer only on intermediate goals (such as leads) but also on the ultimate outcome of marketing activities … sales. Meanwhile, more intermediate goals or further upstream goals (or not-well-defined goals) – i.e., goals that make marketers less accountable to the bottom line – correlated more directly to not scoring leads.
Source: Silverpop; click to enlarge graphic
As with earlier data points, in this case the ‘best practice’ of scoring – which requires sales accountability and collaboration between sales and marketing organization – seems to be associated with marketers that are focused on and being successful in the ‘bigger’ picture.
Lead scoring accountability results in another halo effect.
So what are the implications of this halo effect for marketers?
I’ve been thinking a lot about this issue lately, and I’ve tried to present some proof points here that I find compelling. But I guess the greatest reason why I find this halo effect most compelling is that I’ve witnessed it in my own career. When I and my colleagues at various organizations have embraced this proactive accountability mindset, we’ve found our programs and activities take on new levels of success.
And so I’ve come to the simple conclusion that we as marketers must embrace accountability. It makes us better marketers, and it benefits the organizations that employ us. Realizing this is a huge step, but the payoff is tremendous.
What do you think about this idea of a halo effect? Have you seen evidence of this in recent research or in your own career? I’d love to get your feedback.
Adam, I greatly appreciate the thought that went into taking the premise that marketing needs to be accountable to another level. Overall, I’ve been seeing this as a major differentiator to clients who are successful in their sales and marketing alignment initiatives and marketing automation implementations. Those that begin-with-the-end-measurement-in-mind tend to develop a much more realistic set of requirements and tactics. Their marketing efforts stay rooted in how they measure success rather than in expanding the bounds of the what-if.
In this regard, the halo effect of accountability changes how we market, where we market, how we discuss success/failure, and how we interact with sales and management. As an old quote I heard years ago, it is letting marketers “act as smart as the accountants” when it comes to providing quantitative results.
Great synthesis Adam. I thought your first paragraph was headed towards “but nobody really can gather all that data”, but then you went in a different direction. In truth, marketing measurement can be done DESPITE the absence of complete information — and, as you correctly point out, it has substantial benefits nevertheless.
So the pressure is on marketing and this has been building up for several years now. So far the majority of our brothers and sisters in marketing have been trying to dodge it. They pointed at everything in the world as an excuse why ROI couldn’t be done.
Well, like it or not, it can be done and it has to be done. Because you’re being asked and because it makes your job so much more transparent and measurable.
What’s important for marketing is to get back in the driver’s seat. This means being pro-active in ROI marketing measurement.
Take a grand look at it all. Identify what needs to be done at what budget and show what it will deliver. Then get going on an evolutionary ride. Finally you will know what you are doing and what does and doesn’t work. Ease back on the emotion and gut-feeling of what needs to be done at all these moments of uncertainty. There is no more need to kick everybody’s ass. The numbers speak for themselves.
Start a new stress-free life and be home for dinner every evening. Bliss will be yours.
@ Will – You raise a good point when you talk about how having the bigger picture in mind helps you “… develop a much more realistic set of requirements and tactics.” Marketing accountability not only helps marketers see the big picture, but it also helps marketers make the right choices on trade-offs — making choices that streamline sales and revenue generation, versus supporting alternate goals.
@ David – Great callout … and the point is starting with your goals in mind. This is a key point in your book on marketing performance management that you make, which has always resonated with me. Starting with your goal, you can then layer in levels of sophistication that work backwards and look at the causal chain and that become more granular as as you have the resources and need for doing so.
@ Bas – The results will set us free. And this links back to Will’s point. When you know what you’re ‘really’ trying to accomplish — and are measuring that — it’s a lot easier to say, ‘Hey, guys, I did THIS for our organization,’ versus spinning our wheels or playing politics.
Great dialogue and comments. Thanks!