Monday, July 21, 2008

Study Finds Increased Collaboration Between Marketing and Finance

In their efforts to increase brand awareness and drive sales, marketers are still struggling to create accountability programs that effectively measure the impact of marketing efforts, according to a new study from the Association of National Advertisers (ANA) and Marketing Management Analytics (MMA).

Although the majority of companies with a marketing accountability process tend to house this function within the marketing department, there is growing collaboration between marketing and finance. Overall, marketing accountability has a presence in nearly every company; however, a growing number of these programs are siloed within marketing departments. Forty-five (45) percent of respondents indicated that their accountability programs were based within the marketing group, a jump of 14 points over the prior year.

Despite accountability programs becoming more entrenched within marketing departments, this year’s survey showed progress in improving the relationship between marketing and finance. Thirty-three percent reported “full cooperation and an open dialogue” in establishing metrics and methodologies for marketing ROI – up from twenty-two percent in 2007 – and nearly half of respondents found “some cooperation.” Increasingly, participants in the survey said they believed that marketing and finance “speak with one voice” or “share common metrics.”

Goals for marketing accountability varied greatly in the survey:

  • Forty percent of respondents said that marketing ROI goals were based on internal benchmarks within the marketing department.
  • Approximately one-third reported that marketing ROI goals were closely aligned with overall corporate goals.

  • However, one-third indicated that there were no written goals for marketing in their companies.

    Where marketers had established accountability metrics:
  • Sixty-one percent measured marketing’s impact on sales, and 73 percent viewed them as useful in establishing marketing budgets.

  • Sixty percent looked at consumer attitude, but only 39 percent considered these metrics to be useful.

  • Overall, twenty-three percent of respondents expressed dissatisfaction with accountability metrics.

    Marketers are investing in accountability programs such as brand and customer equity models (53 percent); predictive models for direct response (43 percent); recency and frequency monetary value models (45 percent); and customer lifetime value models (27 percent).

    Importantly, over half (57 percent) use their marketing accountability programs as a factor in increasing or maintaining their marketing budgets.

    Key strategic marketing accountability challenges are:

  • Understanding the impact of changes in consumer attitudes and perceptions on sales (45 percent)

  • Understanding the offline impact of online advertising (26 percent)

  • Understanding the impact of experiential marketing, such as event sponsorships, on sales (23 percent)

  • Measuring long-term ROI for a time period greater than one year (19 percent)
  • More information on the Customer Relationship Management industry can be found at

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