Demystifying social media

As the marketing power of social media grows, it no longer makes sense to treat it as an experiment. Here’s how senior leaders can harness social media to shape consumer decision making in predictable ways.
APRIL 2012 • Roxane Divol, David Edelman, and Hugo Sarrazin Source: Marketing & Sales Practice

In This Article

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Exhibit: Social media enables targeted marketing responses at individual touch points along the consumer decision journey. About the author Comments (22)

Executives certainly know what social media is. After all, if Facebook users constituted a country, it would be the world‟s third largest, behind China and India. Executives can even claim to know what makes social media so potent: its ability to amplify word-of-mouth effects. Yet the vast majority of executives have no idea how to harness social media‟s power. Companies diligently establish Twitter feeds and branded Facebook pages, but few have a deep understanding of exactly how social media interacts with consumers to expand product and brand recognition, drive sales and profitability, and engender loyalty. We believe there are two interrelated reasons why social media remains an enigma wrapped in a riddle for many executives, particularly nonmarketers. The first is its seemingly nebulous nature. It‟s no secret that consumers increasingly go online to discuss products and brands, seek advice, and offer guidance. Yet it‟s often difficult to see where and how to influence these conversations, which take place across an evergrowing variety of platforms, among diverse and dispersed communities, and may occur either with lightning speed or over the course of months. Second, there‟s no single measure of social media‟s financial impact, and many companies find that it‟s difficult to justify devoting significant resources—financial or human—to an activity whose precise effect remains unclear. What we hope to do here is to demystify social media. We have identified its four primary functions—to monitor, respond, amplify, and lead consumer behavior—and linked them to the journey consumers undertake when making purchasing decisions. Being able to identify exactly how, when, and where social media influences consumers helps executives to craft marketing strategies that take advantage of social media‟s unique ability to engage with customers. It should also help leaders develop, launch, and demonstrate the financial impact of social-media campaigns (for insight into the world‟s biggest socialmedia market, see “Understanding social media in China”). In short, today‟s chief executive can no longer treat social media as a side activity run solely by managers in marketing or public relations. It‟s much more than simply another form of paid marketing, and it demands more too: a clear framework to help CEOs and other top executives evaluate investments in it, a plan for building support infrastructure, and performance-management systems to help leaders smartly scale their social presence. Companies that have these three elements in place can create critical new brand assets (such as content from customers or insights from their feedback), open up new channels for interactions (Twitter-based customer service, Facebook news feeds), and completely reposition a brand through the way its employees interact with customers or other parties.

5 million views on YouTube.” and asking them to document their experiences on various social channels. that influence their purchasing behavior. and Ford received 50. which have led to the creation of new varieties of its Mountain Dew brand. Marketing‟s primary goal is to reach consumers at the moments. primarily from non-Ford drivers.The social consumer decision journey Companies have quickly learned that social media works: 39 percent of companies we‟ve surveyed already use social-media services as their primary digital tool to reach customers. it began a broad marketing campaign called the Fiesta Movement. The ten most important responses. Depending on the company and industry. Almost three years ago. some touch points are more important to competitive advantage than others.000 requests for information about the vehicle.000 cars sold in the first six days. Since 2008. Videos related to the Fiesta campaign generated 6.3 What‟s more. A major element involved giving 100 social-media influencers a European model of the car. our colleagues proposed a framework—the “consumer decision journey”—for understanding how consumers interact with companies during purchase decisions.600 people to turn up at the company‟s stores— an example of social media‟s word-of-mouth effect. our work with dozens of companies adapting to the new marketing environment strongly suggests that the most powerful social-media strategies focus on a limited number of marketing responses closely related to individual touch points along the consumer decision journey. Learning from customers: PepsiCo has used social networks to gather customer insights via its DEWmocracy promotions. Yet countless others have failed to match these successes: knowing that something works and understanding how it works are very different things. range from providing customer service to fostering online . Targeting customers: Levi Strauss has used social media to offer location-specific deals. some 10. as their experience influences the brands they prefer and their potential advocacy influences others. we think it‟s time for leaders to remind themselves how social media connects with an organization‟s broader marketing mission. In one instance. from when they‟re pondering brands and products right through the period after a purchase.1 Fueling this growth is a growing list of success stories from mainstream companies: Creating buzz: Eighteen months before Ford reentered the US subcompact-car market with its Fiesta model. or online communities continues to grow. and that percentage is expected to rise to 47 percent within the next four years. Social media is a unique component of the consumer decision journey: it‟s the only form of marketing that can touch consumers at each and every stage.2 Expressing consumer behavior as a winding journey with multiple feedback loops. in late 2010. When it finally became available to the public. explore this interactive exhibit narrated by coauthor David Edelman. The fact that social media can influence customers at every stage of the journey doesn‟t mean that it should. the company has sold more than 36 million cases of them. Twitter feeds. having them complete “missions. As the number of companies with Facebook pages. A social journey For more on social media‟s relationship to the consumer decision journey. direct interactions with just 400 consumers led 1. or touch points. this new framework was different from the traditional description of consumer purchasing behavior as a linear march through a funnel.

”4 It has created a Chicago-based “war room” within its marketing department to monitor the brand in real time across social media. Back to top 1. The remaining nine responses. and to lead changes in the behavior and mind-sets of consumers. to amplify positive sentiment and activity. underpin efforts to use social media to respond to consumer comments. has been diligently working toward its goal of becoming the “largest participatory brand in the world. a sports drink manufactured by PepsiCo. One of those ten—monitoring what people say about your brand—is so important that we see it as a core function of social media. Monitor Gatorade. There are seats where team members can track custom-built data visualizations and dashboards (including terms related . organized in three clusters in the exhibit. relevant across the entire consumer decision journey.communities (exhibit).

to the brand. On Saturday. This kind of response can certainly be positive if it‟s done to provide customer service or to uncover sales leads. Last year. uploading a television commercial to YouTube. and honestly. and the message will differ depending on the situation. for example. Respond Valuable though it is to learn how you are doing and what to improve. This approach means more than merely reaching the end of planning a marketing campaign and then thinking that “we should do something social”—say. the average traffic to Gatorade‟s online properties. Even without engaging consumers directly. broad and passive monitoring is only a start. Every day.” The company continued to reinforce that message throughout the weekend. where the image rapidly went viral just before the weekend as was retweeted with the hashtag #seriouslymcdonalds. Pinpointing conversations for responding at a personal level is another form of social-media engagement. It turned out to be a working weekend for the McDonald‟s social-media team. transparently. design. the number of people who believed the image to be authentic had dwindled. public relations. Such brand monitoring—simply knowing what‟s said online about your products and services—should be a default social-media function. and other enthusiasts. By Sunday. A simple example is the way online deal sites such as Groupon and Gilt Groupe provide consumers with . 2. though. In the initial phases of the consumer decision journey. companies can positively influence consumer sentiment and behavior. such as communications. Responding in order to counter negative comments and reinforce positive ones will only increase in importance. the length of visitor interactions. It means that the core concepts for campaigns must invite customers into an experience that they can choose to extend by joining a conversation with the brand. It means offering experiences that customers will feel great about sharing. 3. referrals and recommendations are powerful social-media tools. and McDonald‟s stock price rose 5 percent the following day. The responsibility for taking action may fall on functions outside marketing. and viral sharing from campaigns have all more than doubled. when consumers sift through brands and products to determine their preferred options. responding is a part of crisis management. because they gain a badge of honor by publicizing content that piques the interest of others. By responding rapidly. even responding personally to concerned Tweeters. product. proactive monitoring of social media—on weekends too. No response can be quick enough. Most often. It means having ongoing programs that share new content with customers and provide opportunities for sharing back. companies can glean insights from an effective monitoring program that informs everything from product design to marketing and provides advance warning of potentially negative publicity. The hoax first appeared on Twitter. all of this feedback is integrated into products and marketing—for example. by helping to optimize the landing page on the company‟s Web site. It‟s also critical to communicate such feedback within the business quickly: whoever is charged with brand monitoring must ensure that information reaches relevant functions. the company‟s director of social media released a statement through Twitter declaring the photograph to be a hoax and asking key influencers to “please let your followers know. sponsored athletes. marketing. fellow users. taking place constantly. or risk. Since the war room‟s creation. a hoax photograph posted online claimed that McDonald‟s was charging AfricanAmericans an additional service fee. and the ability to act rapidly requires the constant. and competitors) and run sentiment analyses around product and campaign launches. Amplify “Amplification” involves designing your marketing activities to have an inherently social motivator that spurs broader engagement and sharing.

This ability to gain productdevelopment insights from customers in a relatively inexpensive way is emerging as one of social media‟s most significant advantages. this may involve boosting brand awareness by driving Web traffic to content about existing products and services. In the early stages of the consumer decision journey. Marketers also can use social media to generate buzz through product launches. For example. Online menswear company Bonobos. the company‟s ambition was to increase its reach and relevance to both men and women. Starbucks said that the effort was “the difference between launching with millions of dollars versus millions of fans.”5 Marketers also can foster communities around their brands and products. 4. Lead Social media can be used most proactively to lead consumers toward long-term behavioral changes. and the company has employed user comments to make dozens of significant changes to its software. When Starbucks wanted to increase awareness of its brand. companies can use social media to amplify their engagement and foster loyalty.com). experience. Converting knowledge to action Despite offering numerous opportunities to influence consumers. In addition. providing winners with a $20 gift card. Our research shows that such direct recommendations from peers generate engagement rates some 30 times higher than traditional online advertising does.credit for each first-time purchaser they refer. provided an incentive for its Twitter followers by unlocking a discount code after its messages were resent a certain number of times. for example. when consumers are ready to buy. during the US National Football League‟s 2010 Super Bowl.200 percent return on investment in just 24 hours. and shows ideas actively under consideration by the company and those that have been implemented. companies can promote timesensitive targeted deals and offers through social media to generate traffic and sales. as Ford did in launching its Fiesta vehicle in the United States. it got more than 19 million hits across all platforms.com to collect its customers‟ views about improving the company‟s products and services and then aggregates submitted ideas and prominently displays them on a dedicated Web site. social media can solicit consumer input after the purchase. for example.” on mckinseyquarterly. it launched a competition challenging users to be the first to tweet a photograph of one of the new advertising posters that the company had placed in six major US cities. Intuit. both to reinforce the belief of consumers that they made a smart decision and to provide guidance for getting the most from a purchase. Finally. for example. Once a consumer has decided which product to buy and makes a purchase. almost 100 consumers bought products from the site for the first time. Starbucks uses MyStarbucksIdea. for example. social media played an integral role in the success of “Small Business Saturday. in our experience. That site groups ideas by product. The campaign delivered a 1. for example. The result? Users rather than Intuit employees answer about 80 percent of the questions. and year-on-year sales for the company‟s products jumped by 27 percent within six months. When grooming-products group Old Spice introduced its Old Spice Man character to viewers. and involvement. As a result of this effort. This social-media brand advocacy effort delivered a marketing punch that significantly outweighed its budget. Many chief marketing officers say that they .” the US shopping promotion created by American Express for the weekend immediately following Thanksgiving (for American Express CMO John Hayes‟s perspective on that launch. Software company Intuit. social media still accounts for less than 1 percent of an average marketing budget. ranks user participation. launched customer service forums for its Quicken and QuickBooks personal-finance software so users could help one another with product issues. The commercial became a phenomenon: starring former player Isaiah Mustafa. see “How we see it: Three senior executives on the future of marketing. has its community forums.

it benchmarked its efforts against approaches used by other companies known to be successful in social media. and then gauging the result against total costs. while the company took a risk by shifting emphasis toward social-media efforts before it had data confirming that this was the correct course. it‟s perhaps not surprising that so many CEOs and other senior executives don‟t feel comfortable when their companies go beyond mere “experiments” with social-media strategy. As a starting point. 7 If social sharing is effective. This approach can give executives the confidence and focus they need to invest more money. In socialmedia terms.8 The company then tested its options. such as helping to launch a new product or to mitigate negative word of mouth. social media may have a more specific role. and resources in social media. In other cases. If both of these assumptions hold true. and talent across multiple functions. New capabilities abound. To do so—and then ensure that social media complements broader marketing strategies—companies must obviously coordinate data. What‟s more. identifying clear roles—for all involved in social-media strategy. added clicks and traffic should result in higher search placements. the challenges center less around justifying funding and more around organizational issues such as developing the right processes and governance structure. and the company‟s senior executives wanted more than anecdotal evidence that the strategy was paying off. several promotional campaigns built around social contests. Without a clear sense of the value social media creates. and social-media best practices are barely starting to emerge. and an active response program to engage with people speaking about the brand. in fact. it spent less money on conventional advertising. the analytic baseline now in place has given the company confidence to continue exploring a growing role for social media. and it modeled the rising positive sentiment and higher search positions just as it would using traditional metrics. We do know this: because social- . and traffic. At various times. the bet paid off. senior business leaders must open up their agendas and recognize the importance of supporting and even undertaking initiatives that may traditionally have been left to the chief marketing officer. “we‟re all marketers now. One problem is that a lot of senior executives know little about social media. tools. correlating that with sales or renewals (or whatever the key metric may be). and improving performance standards. technology. to ensure that the company was doing a quality job designing and executing its social presence. time. But the main obstacle is the perception that the return on investment (ROI) from such initiatives is uncertain. from marketing to customer service to product development—and bolstering the talent base. Yet we can measure the impact of social media well beyond straight volume and consumer-sentiment metrics. especially as social-media activity ramped up. It then advanced the following hypotheses: If all of these social-media activities improve general service perceptions about the brand. social-media activity should help drive sales—ideally. The company concluded that social-media activity not only boosted sales but also had higher ROIs than traditional marketing did. The company had launched Twitter-based customer service capabilities. we can precisely determine the buzz surrounding a product or brand and then calculate how social media drives purchasing behavior. a fan page with discounts and tech tips. the investment was relatively large. that improvement should be reflected in a higher volume of positive online posts. In many cases. Similar types of analyses can focus on mixing the impact of buzz. Thus.   want to increase that share to 5 percent. As these social-media activities gain scale. As our colleagues noted last year. search. at a rate even higher than the company could achieve with its average gross rating point (GRP) of advertising expenditures.”6 Consider the experience of a telecommunications company that proactively adopted social media but had no idea if its efforts were working.

MAY 2012 • David Court. Social media is extending the disruptive impact of the digital era across a broad range of functions. and the chief marketing officer is wading through his inbox. Here are five questions executives should ask to help maximize the bang for their bucks. the fear. how will you respond rapidly and openly—and when should you do so outside the traditional service organization? Senior executives across the company must recognize and begin to answer such questions. Jonathan Gordon. Executives can identify the functions. communication must take place between as well as within functions. Meanwhile. most of all. The time is ripe for executive-suite discussions on how to lead and to learn from people within your company. Article 2 Measuring marketing‟s worth You can’t spend wisely unless you understand marketing’s full impact. how will you identify and disseminate that information efficiently and effectively—and then ensure that it gets used? If you spot an opportunity to have a meaningful conversation with a key influencer. “What‟s going on with our brand image?” she . how will you quickly engage the right senior executive to follow through? If you recognize a fast-moving service concern.media influences every element of the consumer decision journey. marketers outside it. If insights from monitoring social media are relevant to nonmarketing functions such as product development. A board member has e-mailed him about an opportunity to invest in an emerging digital platform. touch points. the chief financial officer appears in the doorway: “The boss wants to sign a big sponsorship deal. The CEO is calling. Minutes later. the perceived lack of metrics. That complicates lines of reporting and decision-making authority. and goals of social-media activities. and the limited sense of what‟s possible are eroding. as well as craft approaches to measure their impact and manage their risks. and Jesko Perrey Source: Marketing & Sales Practice In This Article   About the authors Comments It’s 8 AM. It looks cool. and. but it‟s speculative and not cheap. for instance. Can we drop out of TV for a couple of months to pay for it?” The CMO has barely started to explain what happened the last time the company went dark on TV—an aggressive rival grabbed market share—when his assistant interrupts. your customers.

Yet salespeople. Over that period. especially in emerging markets. for example. had for years relied heavily on traditional marketing. While the influence of advertising had declined for existing products. These questions. Time and time again. Although companies have access to terabytes of data about these behavioral changes. the impact of TV remained strong for some new products. Concerned about the growth of new media. In today‟s fragmented media world. is critical for making real progress rather than becoming bogged down by excessive firefighting and ultimately futile debates about the precision and certainty of measurement. such as television and print ads. What exactly influences our consumers today? The digital revolution and the explosion of social media have profoundly changed what influences consumers as they undertake their purchasing decision journey. but he‟s not looking forward to the conversation. these trends were not universal. the company decided to research just what was influencing the choices of consumers—and found that only 30 percent of them cited traditional advertising. we described in a McKinsey Quarterly article how many traditional mass-marketing advertising models were under attack and suggested some approaches to make marketing investments count in an increasingly complex environment. the company was able to construct a marketing allocation model that factored in both the consumer importance and costeffectiveness of different points of interaction. cut to the heart of the quest to drive returns on marketing spending. both by geography and in relation to specific product situations. In fact. The solution is usually to commission research that gets at the heart of understanding the consumer‟s decision journey. and gaining alignment across the C-suite. Most are making progress. Yet we are consistently struck by the power of asking five seemingly basic questions.asks. marketers are striving to exploit new-media vehicles and to measure their impact through new analytic approaches and tools. once critical to actually closing deals.” The CMO promises a full debriefing later in the day. Armed with insights such as these. “The latest monitor report looks bad. Coming to grips with them. as new kinds of media have grown in importance and mobile communications have created new opportunities to reach consumers. only by knowing how the way consumers . they read online reviews and compare prices. Marketers must be ready to use the findings to debunk accepted wisdom and legacy rules of thumb. Seven years ago. The number and strength of such competing pressures has been growing. and the reasons are tough to manage: factors such as bad experiences with intermediary retailers and mediocre word of mouth. In addition. Brand scores are down. when digital advertising was still in its infancy and long before social media had become a marketing force. we have been fortunate enough to see more than 200 organizations tackle the difficult issue of how to improve marketing‟s return on investment (ROI). 1. Such foundational work must shine a light on the touch points and messages that actually influence consumer behavior. Once in stores.1 Since then. detailed in this article. and a still-challenging economic environment. had declined in importance because consumers regarded Internet reviews as more objective. they become reviewers themselves and demand ongoing relationships with products and brands. This enabled much sharper decisions about its marketing mix. the ROI challenge has become more intense. In the face of growing complexity. we find that companies are aware of the growing importance of touch points such as earned media but don‟t understand the true magnitude of their effects or how to influence them. they search for deals with mobile devices and drive hard bargains.2 When considering products. in-store interactions with consumers were more important in communicating the company‟s message and driving potential buyers to consider its products. many still can‟t answer the fundamental question: how exactly are our customers influenced? One global consumer products company. And after the purchase. relentless financial pressure.

Looking to external agencies is little help. or even whom they influence. One insurance company. While its customer research suggested that significant changes were required in the way it allocated marketing spending. We‟ve seen efforts that result in short-term sales dips: a retailer moving too quickly away from circulars and a consumer-goods player reducing TV spending too fast. they‟re in the same boat. marketers have mitigated the risk of failure through years of trial and error about what makes great advertising. Yet while spending on new media is a risky bet. Yet it‟s difficult to integrate all of this information in a way that not only provides answers that you trust but can also inform smart marketing changes. most senior marketers justifiably had great confidence in their judgment on spending and messaging. while some of the newest marketing platforms have been around for months or even weeks. How are we managing financial risk in our marketing plans? Successful communication requires hitting the right audience with the right message at the right time: a small.” and the analytics were too complicated for business leaders to understand. and some companies have sophisticated analytical tools. That‟s when the internal dialogue shifted from “should we be spending on marketing at all?” to “what‟s the optimum marketing spending needed to hit our targets?” We are excited by the possibilities that “big data” and advanced analytics create—no question. there‟s no analytic approach that can singlehandedly tell you when you have a great piece of creative work. That‟s not the case with today‟s new media. It was only when the company articulated specific questions it was trying to answer.interact with your company has evolved can you begin to make more cost-effective marketing investments that truly influence purchase decisions. when marketers should apply them. Yet output from the model “felt wrong. for that matter. executives didn‟t want to choose an excessively risky path. Marketers often hear that the answer to improving their judgment in this rapidly changing environment is data. spent a year working on a complex demand model to try to understand the impact of its growing marketing spending in light of declining sales. the degree of ROI risk—getting the sales results you want from a given amount of marketing spending—has increased. and designed targeted modeling exercises to prove or disprove them. moving target. it‟s hard both to make a rational investment case for additional marketing spending and—in the same breath—to admit that you are really making a passionate guess. when traditional advertising was all that mattered. and there is little accumulated experience about which messages work. That‟s hardly surprising: marketers have been perfecting the TV playbook for decades. But data remain only as useful as the expertise you bring to bear. We counsel a return to what creates great marketing judgment: start by formulating hypotheses about the impact of changes to your marketing mix and then seek analytical evidence.3 2. And given the money required. The global consumer products company we mentioned earlier offers an alternative approach. But it can be tough to admit publicly that your judgment is incomplete or out-of-date. too little. A decade ago. that it was able to eliminate a lot of “noise” in the data and uncover a clear relationship between marketing spending and business results. how they can be scaled. With traditional media. They therefore set risk parameters . Today. At a basic level. it‟s a bet companies feel compelled to make. many privately confess to being less certain. and good judgment will remain a hallmark of the best marketers. Influence can shift rapidly. So the question becomes how much risk is too much—or. We‟ve also seen companies feel the heat from investors for rapidly ramping up spending on digital channels without cutting it elsewhere. 3. How well informed (really) is our marketing judgment? Marketing has always combined facts and judgment: after all. for example.

There was a maximum percentage for spending on unproven vehicles. Finally. and marketers shouldn‟t be shy about putting this issue squarely on the table. Marketers historically had only a handful of communication vehicles. You can‟t get the skills and knowledge you need in just one person. First. By undertaking this exercise. and learning. In packaged-goods companies. Geared to brand managers. and responsibilities not only within the marketing organization but also throughout your company (across functions and business units) and externally (with agencies and external vendors). That approach also can help with scenario planning: one media provider developed a straightforward decision support tool for precisely that purpose. You just will. given the company‟s growth priorities. this was—and may still be—the role of brand managers. so must the internal environment. This proliferation has led to the emergence of both external and internal specialists. with accumulated experience not only in media channels (such as social media) but even in individual vehicles (such as Facebook). you‟ll need somebody who both integrates marketing efforts across channels and communications vehicles and focuses on the bottom line. but the basic requirement is that it must be done bysomeone. 4. now they have dozens of them. but examining the implications of several generally accepted trends in consumer behavior and media consumption habits made some bold forecasting possible. The trust-based relationship between companies and agencies isn‟t at risk. Senior executives at one North American consumer-packaged-goods company. but everyone will have to accept that roles are changing. tried to sketch out their own “future of marketing” with an eye to how they would need to work differently over the coming five years. you‟ll need absolute clarity in processes. see “Five „no regrets‟ moves for superior customer engagement. mitigating risk while providing breathing room for piloting. the tool used simple response curves that allowed the marketer to simulate different scenarios of marketing spending. from cost to effectiveness to risk. and the number is growing rapidly. not postdoctoral researchers. you‟ll require a number of specialists. This simple allocation model ensured a gradual move to emerging media. The tool was embedded in an easily used PowerPoint slide and proved invaluable for settling on marketing approaches that hit the sweet spot for a number of variables. With thoughtful scenario planning and cross-functional participation. How are we coping with added complexity in the marketing organization? As the external marketing environment becomes more complex. as well as limits on annual spending reductions in some channels or increases in others.com.) Addressing complexity in a comprehensive way requires a dedicated effort. (For more on organizational moves companies should make in a world of more pervasive marketing. No one pretended to have a crystal ball. We‟ve found three things that are always true in managing complexity within the marketing organization. and you‟re not likely to get everything you need internally. The exponential growth in marketing complexity seems unending and needs to be managed. for example. testing. Managing risk is critical. roles. Finally. The company then debated the future of brand managers and specialist centers of excellence and what that future implied for resources required centrally and in business units. They stimulate dialogue about real trade-offs and help to manage expectations across business units and functions whose cooperation is often critical when companies change the broader commercial mix. Such decision tools do more than provide marketers with valuable information. the consumerpackaged-goods company saw how it could keep its marketing headcount and budget relatively flat. such discussions can be extremely rich and rewarding.” forthcoming on mckinseyquarterly. it asked what should be stopped or dramatically deprioritized. while . for example. Second.that enabled some changes in the marketing mix but limited the total shift in any given year.

Nothing approaches a definitive metric for social media and other emerging communication channels. and on sales leads and revenue. we find that marketers who have good answers to the five basic questions are better equipped to do battle for the effectiveness of marketing and to win the war for growth. one consumer-packaged-goods company uses econometric analysis and frequent brand tracking to assemble a scorecard of returns in the short term (average and marginal marketing ROIs within 12 months) and the longer term (progress on brand equity and brand loyalty for periods of more than 12 months). for example. the financial returns and the ability of all forms of communication to influence consumers would be precisely calculated. members of the company‟s board were similarly reassured. So the company adopted a simple three-step approach: measuring the impact of advertising on consumer recall. are understood and trusted by your top team. not marketing jargon. faced this necessity after committing more than $200 million to rebrand itself following a series of acquisitions. Metrics are rarely perfect. In reality. and the capabilities of specialist and generalist resources. and deciding the marketing mix would be simple. there are multiple. That‟s nonnegotiable. Yet time and time again.versus long-term trade-offs and to deliver complete answers to “show me the money” requests. Yet the volume of data available today should make it possible to find metrics and analytic opportunities that take advantage of your unique insights. provide proof of progress. marketers should move toward an apples-to-apples way of comparing returns across a range of media. on the public‟s perceptions of the business. 5. Yet you must have a way to track progress and hold marketers accountable. . One international logistics company. How do you do it? Even in the absence of a single way of measuring ROI for different channels. The marketing environment continues to change rapidly and often feels like a moving target that‟s impossible to hit. What metrics should we track given our (imperfect) options? In an ideal world. Senior executives wanted proof that the effort was working—and in a form they could readily understand.massively shifting senior leadership‟s role. It‟s genuinely difficult to overemphasize the magnitude of the change or the challenge. Because the metrics were developed internally. the culture of marketing. and usually imperfect. ways to measure most established forms of marketing. and no single metric can evaluate the effectiveness of all spending. The company is tantalizingly close to its ultimate goal of truly being able to make decisions about short. and lay a foundation for more sophisticated approaches to tracking marketing ROI in the future. such as marketing-mix modeling. With these data in hand—and proof that the rebranding effort was ultimately improving performance—members of the Csuite had the assurance they needed to reaffirm the investment and to commit themselves to more complex measurements. Likewise.

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