Marketing Operations Role in the Measurement of

Marketing ROI

Prepared by:
Mayer G. Becker
National Practice Director, Enterprise Marketing
MarketSphere Consulting, LLC
 Marketing Operations Role in the Measurement of Marketing ROI

(Parts of this paper were originally published in mROI Insights: The Path to marketing relies on its own tools, insights, strategies
Marketing Profitability, August 2009 Newsletter, Lenskold Group)
and creative to manage its part of the supply chain,
This year for the first time since the annual study began operating independently to accomplish assigned
in 2004, the Lenskold Group’s Marketing ROI and objectives. In addition, because marketing is historically
Measurement Study included questions on marketing a cost center, transparency into how the marketing
operations. This new information can prove helpful to budget is spent is low.
marketing leaders who want to create and empower a
With Sarbanes-Oxley (and similar laws internationally)
marketing operations staff to improve the “business” of
and other pressures to increase transparency,
marketing – managing resources, systems, and
marketing has come under increased scrutiny. The
processes that make marketing more successful. A
difficult economic conditions of recent years bring a
marketing operations department in turn can champion
renewed focus on spending every dollar wisely, and for
and facilitate a “measurement mindset” within marketing
the greatest return. Boards of directors and business
that will help the Chief Marketing Officer (CMO) achieve
leaders recognize that they must treat marketing
strategic advantage through marketing ROI-based
differently, especially because it is one of a company’s
decision-making. This article introduces five ways
largest expense categories.
marketing operations can support and improve
marketing measurement capabilities. As a result, the CMO has the imperative to demonstrate
marketing’s value like any other company investment.
The results of the 2009 Lenskold Group / MarketSphere
Marketing now has among its mandates the
Marketing ROI and Measurements Study show that
responsibility for delivering free cash flow from a
companies with marketing operations in place are twice
combination of increased effectiveness of programs,
(11% vs. 5%) as likely to be high performing companies,
and improved efficiency of operations. To accomplish
i.e., companies who report having highly effective and
this, executives must treat marketing as a profit center.
efficient marketing. Those companies with dedicated
Over sixty-five percent (65%) of firms responding to the
marketing operations, while reporting a broad range of
Lenskold Group study said, “…their CEO/CFO’s are
responsibilities, indicated overwhelming responsibility
making greater demands than last year to show ROI as
for marketing project management (83%) and marketing
part of securing budgetary resources for marketing
governance, i.e., budget and finance (73%). As well,
efforts.”
firms with marketing operations are more likely to have
dedicated marketing analysts, versus firms without
marketing operations (45% vs 17%). These are just a
few indicators of why the presence of a dedicated The Move to Improve Operational Efficiency
marketing operations team improves measurement
capabilities. There is a new focus on marketing operations, or
operational efficiency, according to a study conducted
this year by the CMO Council (www.comcouncil.com),
and sponsored by global software company Alterian.
From Cost Center to Profit Center – Marketing Sixty percent (60%) of survey respondents said the
In Transition transformation of their marketing operations is an
essential area of focus, regardless of company size.
Marketing operates an underlying “supply chain” of
Fifty percent (50%) said they consider “marketing
ideas and content whose purpose is to deliver the right
operational effectiveness” one of the least developed
information through multiple communication channels to
aspects of their organization. Marketers themselves,
the right target audience at the right time. The supply
schooled and experienced in their area of specialization
chain produces a combination of programs that address
like advertising, direct marketing, promotions or public
new customer acquisition, sale of products, customer
relations, realize their shortcomings in trying to master
retention and customer service, or enhancement of the
operational issues while at the same time delivering on
company’s brand and reputation. Each discipline of

© 2009 MarketSphere Consulting, LLC 2

 Marketing Operations Role in the Measurement of Marketing ROI
the traditional mandates of marketing – brand, product
and innovation, life cycle revenue management, and
being the voice of the customer.
Adding to the challenge, marketing is much more
complex than ever before and is required to respond in
hours to market conditions, as well as operate 24x7 in a
global market. With the internet now a thriving sales and
communication channel, the business never closes. In
response to pressures both internal and external,
marketing executives are recognizing the need for a
central function to manage resources, systems and
processes. This central function is marketing operations
-- fifty-nine percent (59%) of respondents in the 2009
Lenskold Group / MarketSphere Marketing ROI and
Measurements Study say they have a dedicated
marketing operations team or person.
The Role of Marketing Operations – Best
Practice Approach
Because marketing operations is an emerging
discipline, many CMO’s struggle with how best to define
its mission. The best practice developed by
MarketSphere promotes a Center of Excellence led by
an operations executive, preferably with PMP (Project
Management Professional) or relevant operations
management experience. As well, the head of marketing
operations serves as chief of staff to the CMO,
managing a staff of professionals who own and operate
the department’s processes and project management,
oversee its finances and governance, and provide
shared services (i.e., creative, production, agency
management, procurement, traffic) and technology
support to the rest of the marketing organization.
In the MarketSphere model, marketing operations
should manage the “business of marketing,” which
allows marketers to concentrate more fully on their
respective functional areas. This alleviates the project
management and financial reporting burdens from
marketers, for example, leaving the brand team the time
and resources to develop programs that enhance the
brand and drive market awareness.
© 2009 MarketSphere Consulting, LLC
Promoting Marketing Measurement and ROI
Analysis
With responsibility for financial governance, marketing
operations is the logical entity to champion and facilitate
a “measurement mindset” within the marketing
department, in five important ways.
1) Ensure alignment of the marketing budget, and
marketing activities, to corporate and departmental
objectives. Marketing operations works with the
leadership team during the budgeting process and
aligns budgets with measureable objectives. Its planning
and oversight ensure that the marketing investment
portfolio supports only those measurable objectives
(with slight exceptions where may be a strategic reason
to fund other programs, such as research into new
communication channels.) Then, throughout the
financial year, marketing operations monitors alignment
and performance in cooperation with finance.
2) Provide the tools for measuring and reporting
marketing performance. Marketing operations
provides the automation and technology infrastructure to
support the department. Key to gathering data for mROI
calculations is a marketing resources management
(MRM) application for connecting budgeted and actual
spending with activities, tasks and related objectives.
Another important tool is a business intelligence and
reporting platform that collects data from many sources,
including the general ledger and the procure-to-pay
application, and delivers information through
dashboards and reports, alerts, drill-downs and “what if”
analysis.
3) Establish the framework for measuring marketing
performance and calculating ROI. A marketing
organization must first decide what it wants to measure.
Marketing operations leads development of key
performance indicators (KPI’s) from the collective
customer, financial and operational data as a first step
in creating a framework. As an organization evolves to
more fact-based decision-making, additional layers of
analysis, including marketing ROI (mROI) analysis of
each program will become the standard. Marketing
operations manages the mechanics of measurement,
performs the mROI calculations, and publishes them
along with other relevant metrics and KPI’s.
3
 Marketing Operations Role in the Measurement of Marketing ROI

4) Translate between the languages of marketing

and finance. The languages of the two departments are
fundamentally different, with marketing accustomed to
talking about the long-term value of a customer, or the
cost of acquiring a new customer. Finance, on the other
hand, has a shorter-term focus on line-item budget
performance and quarterly results. Marketing operations
interprets marketing metrics in a language familiar to
finance and operates a “marketing dashboard” to
facilitate translation between budgets, marketing
activities, and accomplishments.

5) Create the environment for a “measurement

mindset.” Acceptance for fact-based mROI analysis will
not just “happen.” Marketing operations, in its financial
governance role, should construct and maintain an
environment that allows marketing leaders to better use
marketing metrics and analysis. Over time and in
tandem with the deployment of a technology
infrastructure, training and change management, the
marketing organization will adopt a “measurement
mindset” and use mROI as a key measure to guide
decision-making.

Summary About the Author

Marketing is more complex than ever, and under
increasing pressure to be more transparent and
demonstrate the value it contributes to the organization.
Companies are creating marketing operations teams to
focus sharply on achieving operational efficiencies, “to
do more with the same, or less.” Combining
responsibility for project management, systems
infrastructure, and financial governance, marketing
operations is the logical entity to create the framework,
tools, training and environment that facilitates
measuring and reporting the value received from the
investment a company makes in its marketing.
Mayer G. Becker
National Practice Director, Enterprise
Marketing
Mayer G. Becker has over 25 years
of marketing experience, including
executive roles with United Airlines,
Tribune Company, Computer Associates, ITT Corp. and
ADP. He is a member of the American Marketing
Association Chicago Chapter, Direct Marketing
Association and the Marketing Executives Networking
Group. Mayer has been featured by the AMA, Aquent,
Henry Stewart, and others in numerous presentations
and seminars. He is an acknowledge thought leader in
the field of marketing operations. He can be reached at
mayer.becker@marketsphere.com.

For more information on the Center of Excellence visit

www.marketsphere.com/improvingmarketing.

© 2009 MarketSphere Consulting, LLC 4