Today, I'm in NYC to cover the Association of National Advertisers' Marketing Accountability Forum. In this session, Gordon Wade of the EMM group is speaking about metrics that members of the ANA use, and is discussing why marketing needs to be accountable as a whole. Wade states that at least 85% of CEOs and COOs of companies are not marketers by trade, leaving a major point of contention between those positions and the marketing departments of their respective companies. He points out that thinking about marketing as a cost center, as many executives do, is kind of unfortunate. I'll follow that by stating that even though marketing tends to get sacked first (along with finance, go figure), marketing IS a cost on the books, but a necessary one - most people aren't silly enough to not have some marketing effort for their company.

So what's accountability and proper metrics all about? More of Wade's comments and presentation after the jump, if you're into that sort of thing.

• Wade shows a graph showing what portion of year-over-year growth would "vanish" if no marketing was done in a prior year, and asks that we all realize that this is all that would happen should a marketing department shut down during that timeframe. Absolutely. If any marketer feels that he or she is so important that a company wouldn't make any money in year x if all advertising efforts were shut down is kidding themselves.
• As far as actual metrics go, Wade offers an project handled by the Australia Marketing Institute, the Marketing Metrics Project, as an excellent reference for companies or agencies to utilize in order to make sure they're following up on their marketing programs. You can find the papers here, although it'll cost you $88 (Australian, I presume) if you're not a member of the Institute.
  
• The metrics themselves are described in five major categories: relevant, credible, visible, sustainable and adaptable. I won't belabor each of them by describing how they relate directly to each and every marketing program and measurement plan, the categories are fairly self explanatory.
• A few of the common problems with measurement metrics that Wade outlines are data availability (absolutely, many companies just don't have data available at their fingertips to measure each and every program); following up on the competition to see how each are working in the market as a whole; linking the metrics to the planning process so they actually mean something long term
• One suggestion, and one that I don't believe companies do a good job of working on, is looking at your measurement curves when the return on investment for individual media mix items flattens out, and taking any monies you would like to add to that 'flatline' and placing it elsewhere. Too many brands overdo it with television or print or outdoor, because that's what they are comfortable with.
• Wondering how to measure your marketing efforts overall? Try this suggestion: Return on Marketing Investment = the Lifetime Value of the Customer in 2005 - Lifetime Value of the Customer in 2004 divided by your marketing expense. It's not quite as simple as a lift vs. baseline calculation, but it works.
• One of the most creative things I've seen in a while is one bullet point on a page of six of them - the customer's profit on a product produced by your company in a B2B scenario. Although I can see a pricing manager walk in the door and saying "well, we're obviously selling our item too low."