Posted by Chad Mitchell on May 19, 2010
Hi Marketing Leaders,
“Do less with more.” How’s that for a marching order from your CEO? Well, it’s a common phrase we hear every day from CMOs and marketing leaders. The Great Recession has created The Great Obsession with return on marketing investment.
My next report, “Owning Up To The Marketing Mix, focuses on marketing effectiveness and the increased accountability facing CMOs. The report guides CMOs on the value and limitations of marketing mix optimization. A former colleague and Forrester analyst, Julie Katz, who served Customer Intelligence managers, defined marketing mix modeling as:
>The process of using statistical analysis to estimate, optimize, and predict the impact of multichannel promotional tactics on future business revenue.
That is a great definition and highlights the scope (multichannel) and value (optimize and predict) of data-driven marketing allocation. During my interviews for this report, it is evident that marketing and media mix modeling have evolved as CMOs search for a more strategic tool to manage marketing as investment versus an expense.
Today, CMOs are more focused on what will work tomorrow versus what worked in the past. The idea of continuous improvement is a critical dimension of marketing effectiveness, as CMOs leverage more data, more channels (mobile and social) and new measurement techniques to understand marketing effectiveness and efficiency. In addition, CMOs must understand how marketing impacts growth of the entire business beyond tactical promotional efforts. Vendors now offer technology-enabled services guiding CMOs on future marketing investment versus a point-in-time econometric analysis. This gives CMOs insight into broader variables like market development, product development and competitive strategies.
I would like to push the definition further by getting your thoughts on Strategic Marketing Allocation:
A technology-enabled service incorporating vast amounts of data; complex statistical modeling; and business intelligence software helping marketing leaders optimize, simulate and measure the impact of integrated marketing on a firm’s growth and strategic position in a continuous learning environment.
Too long, but it’s a start.
How do you define it?
Strategic Marketing Allocation isn’t a crystal ball. CMOs and vendors talk candidly about its limitations. You can’t measure everything – it’s a directional tool. And you don’t want to have efficiency remove all creativity or instinct from good marketers. But, we could all use a little friendly advice on “what might happen in the future.” Especially, when the future becomes your boss' Great Obsession!
I look forward to your feedback.