Cranfield School of Management

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Marketing Measurement and Accountability

Supervisor:  Stan Maklan
 
“Marketing must speak the language of the board” or be consigned to the dustbin of management history according to leading academic and practitioner journals.
 
Marketing’s supposed inability to speak the language of the Board, i.e. identify the bottom line impact of marketing spending, is impacting its credibility; central marketing functions are being dispersed into SBU-level tactical (Verhoef & Leeflang 2009) support groups so as to be “close to the customer” (Webster Jr. et al. 2005).  Marketing’s sphere of influence is increasingly limited to details of execution and tactics (Verhoef & Leeflang 2009).  Marketing Directors do not automatically sit on the Boards of companies where strategic decisions are made.
 
At the core of Marketing’s angst is the perennial challenge that Marketing is unaccountable and therefore does not “deserve” the funds it requests nor to be at the top table.  This is highly destructive: the challenge for European economies is not merely to micro-manage spending, it must grow through branded innovation on a global scale.  The discourse of “the language of the Board” directs managers and scholars to focus on assessing tactics and activities through financial ratios (e.g. ROI) and discounted cash flows (e.g. NPV, EVA).  This creates an incomplete view of accountability and defines the scope of marketing as the sum of its activities; advertising, promotion, packaging etc. Where is the accountability for insight, segmentation, innovation, customer engagement and brand building?
 
I maintain the problem we face is not a lack of measurement; our measures define marketing tactically.  Renown scholars provide compelling evidence linking marketing spending to share price (Srinivasan et al. 2009; Rao & Bharadwaj 2008) or intermittent marketing outcomes, e.g. customer satisfaction, to shareholder value (Fornell et al. 2006; Anderson et al. 2004; Rust et al. 2004).  Dashboards integrate disparate databases to provide managerially friendly oversight between marketing activity and the bottom line (Pauwels et al. 2009).  The evidence is compelling yet Marketing is still seen as unaccountable.
 
I do not think that more and or better metrics will address this, therefore, I wish to supervise a PhD thesis that considers alternative research directions:

  1. Marketing accountability is discussed in literature as a rational search for evidence, ignoring issues of legitimacy and power. Institutional factors (Townley et al. 2003; Greenwood & Hinings 1996) will not be solved regardless of how good the science of marketing measurement becomes and are worthy of study.
  2. We know little of how organisations respond to marketing metrics. Instead of focusing purely on the validity of the metric, research should look at its actionability and ability to inspire change.
  3. A totally different perspective considers how customer centred measures impact marketing accountability. Most definitions of accountability assume that the Marketing function is accountable to shareholders through their Boards.  If marketing theory and practice embraces a Service Dominant Logic (Vargo & Lusch, 2004), than should we not measure the customer value created by our marketing activities?

References
 
Ambler, T. & Roberts, J., 2006. Beware the Silver Metric: Marketing Performance Measurement has to be Multidimensional. Marketing Science Institute Working Paper Series, 06-113, 1-13.
 
Anderson, E., Fornell, C. & Mazvancheryl, 2004. Customer Satisfaction and Shareholder Value. Journal of Marketing, 68, 172-185.
 
Fornell, C. et al., 2006. Customer Satisfaction and Stock Prices: High Returns, Low Risk. Journal of Marketing, 70(1), 3-14.
 
Greenwood, R. & Hinings, C., 1996. Understanding Radical Organizational Change: Bringing Together the Old and the New Institutionalism. The Academy of Management Review, 21(4), 1022-1054.
 
Pauwels, K. et al., 2009. Dashboards as a Service: Why, What, How, and What Research Is Needed? Journal of Service Research, 12(2), 175-189.
 
Rao, R. & Bharadwaj, N., 2008. Marketing Initiatives, Expected Cash Flows, and Shareholders' Wealth. Journal of Marketing, 72(1), 16-26.
 
Rust, R., Lemon, K. & Zeithaml, V., 2004. Return on Marketing: Using Customer Equity to Focus Marketing Strategy. Journal of Marketing, 68(1), 109-127.
 
Srinivasan, S. et al., 2009. Product Innovations, Advertising, and Stock Returns. Journal of Marketing, 73(1), 24-43/
 
Townley, B., Cooper, D.J. & Oakes, L., 2003. Performance Measures and the Rationalization of Organizations. Organization Studies (01708406), 24(7), 1045-1071.
 
Vargo, S. & Lusch, R., 2004. Evolving to a New Dominant Logic for Marketing. Journal of Marketing, 68(1), 1-17. 
 
Verhoef, P. & Leeflang, P., 2009. Understanding the Marketing Department's Influence Within the Firm. Journal of Marketing, 73(2), 14-37.
 
Verhoef, P. et al., 2009. A Cross-national Investigation into the Marketing Department’s Influence within the Firm, Cambridge: Marketing Science Institute.
 
Webster Jr., F.E., Malter, A.J. & Ganesan, S., 2005. The Decline and Dispersion of Marketing Competence. MIT Sloan Management Review, 46(4), 35-43.

 
Additional Suggested Reading:

  1. Ambler, T. (2003), Marketing and the Bottom Line (2 edition), Pearson Education, London.
  2. Ambler, T., Kokkininaki, F. and Puntoni, S. (2004), `Assessing Marketing Performance: Reasons for Metric Selection`, Journal of Marketing Management, Vol. 20, pp. 475-498.
  3. Clark, B. H., Abela, A. V. and Ambler, T. (2004), "Return on Measurement: Relating Marketing Metrics Practices to Firm Performance", American Marketing Association. Conference Proceedings, vol. 15, pp. 46.
  4. Morgan, N. A., Clark, B. H. and Gooner, R. (2002), "Marketing productivity, marketing audits, and systems for marketing performance assessment: Integrating multiple perspectives", Journal of Business Research, vol. 55, no. 5, pp. 363.
  5. Rust, R., Ambler, T., Carpenter, G., Kumar, V. and Srivastava, R. (2004), `Measuring Marketing Productivity: Current Knowledge and Future Directions`, Journal of Marketing, Vol. 68, pp. 76-89.
  6. Rust, R., Lemon, K. and Zeithaml, V. (2004), `Return on Marketing: Using Customer Equity to Focus Marketing Strategy`, Journal of Marketing, Vol. 68, No. 1, pp. 109-127. 

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