The only option for accountability and optimized global demand:

System thinking applied to marketing

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Market ContactAudit (MCA) / Marketing Information System (MCA/System) 2012 by Integration Marketing and Communications Limited. All Rights Reserved.

In the rst of three white papers that address CEO concerns, Integration looks at how only system thinking can achieve accountability in marketing.

The only option for accountability and optimized global demand: System thinking applied to marketing

The ultimate goal: delivering sustainable demand generation , everywhere, globally.

Introduction
Marketing and communications absorb large slices of business investment. Yet research by the Fournaise Marketing Group 1 shows that a surprising number of CEOs are still very uncomfortable when it comes to understanding what they are getting for their marketing and communications (marcoms) money. Although the performance of different parts of the business can be analysed using data, getting the same level of transparency from marketing functions remains a problem. Whats worse is that senior management often has a feeling that the marketing teams themselves are elusive. How could this be in the age of integrated marketing and communications? Deloittes experience with Integration technology the Market ContactAudit
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(MCA) System shows that account-

ability and transparency in marketing is entirely possible to achieve quickly and everywhere. The MCA System empowers management by generating a quantiable, comprehensive overview of the effectiveness of a brands marketing communications from the consumers perspective . It does this by systematically tracking and analysing the inputs and outputs of marketing functions. So management can work with indicators that are meaningful and that can be used to align with and optimize marketing and communications operations. It also provides marketing teams with a transparent and accurate appraisal of their contribution to the ultimate end-goal: delivering sustainable demand generation everywhere, globally.

Which marcom activities actually drive the results in sales and the bottom line?

Hits and misses: who did what?

No matter how much they try, marcom spend remains a fuzzy zone for many organisations, from regional players to multinationals. The problem is inherent to the marketing functions. The resulting disconnect between marketing departments and management is a reality in many companies, leading to misunderstandings, guesswork and often a very poor level of effectiveness and efciency. Business managers would love to be able to get a better grasp on what is happening at a brand level, with metrics they can compare and analyse. They can clearly see the sales and bottom line. They can also see a number of marketing yardsticks. But which of them actually drove the results in sales and the bottom line? Who or what is most responsible for the hits or misses? Can we learn from this and leverage it as best practice across the organisation? When we talk about accountability and transparency, the only question that truly matters is: how can we align the output to the input? Accountability can be dened simply as the ability to determine what the marcom functions have generated for the business in terms of output and at what cost. For this, you need: The activities and actual spend in marcom: the input to the system; Robust data concerning the results of all marcom initiatives and their respective contribution to the business, the output.

How many executives actually follow the paper trail to the local spend and its link to the output in time?

What gets measured, gets improved

Most executives in the Fournaise report want to see clearer links between activities and results. How does this currently work? The reality is that many organisations are unable to drill down to a local level in marketing budgets. Marketing communications are essentially atomized. Once budgets are signed off at corporate level, the actual implementation is handled by brand managers that make decisions based on the local context, needs and opportunities. The responsibility for spending is gradually decentralized to a degree that makes it very difcult to reconcile with the original budget. The other glaring problem is that marketing communication activities are intrinsically unlike any other company functions, and are hard to analyse until after the event, when it is too late Furthermore, consumers are bombarded by messages all day long from different sources. What do we currently know about the output? What can we say about the share of media, sponsorship, digital, PR or POS? The awkward reality is that we are working from incomplete information that does not capture data across media in time for it to be of use. How many executives actually follow the paper trail to the local spend and its link to the output in time? Yet demanding that marketing ofcers provide accountability is unfair and simply doesnt work. After all, Formula 1 drivers are not asked to provide metrics when negotiating hairpin turns at 200 km/h for a very good reason. You cant analyse a process while you are actively trying to achieve difcult goals.

The contribution of the marketing function to the business cannot be measured without specic tools.

System thinking: nally applied to marketing

As demonstrated by W. Edwards Deming3, the only way to achieve accountability in marketing, as in any function, is to apply system thinking and move this mission away from the functions themselves. Doing this: Liberates the marketing experts to focus on strategy and the execution of creative thus effective marcom initiatives; Assigns the job to experts in accountability and system thinking; Enables all the participating stakeholders to equally contribute to and be aware of the accountability system. Yet the contribution of the marketing function to the business one denition of accountability in marketing - cannot be measured or reported on without specic tools that enable:

Comprehensive data-gathering; INPUT A link with marcom spend via activity-based costing; Consistency across the board; A holistic outcome measurement for appraising the overall inuence of marcom or the brand experience; OUTPUT Multi-contact measurements reported in a single, robust currency that enables the comparison of each marcom activity; Validated and robust measurement that is understandable across all corporate functions, categories and markets.

Clearly understand what is contributing to brand experiences that sell , what needs improvement and what needs to be re-considered.

Accountability in motion
Currently, only one validated system ticks all the boxes for CEOs looking for the systematic gathering of spend data and the measurement of multi-contact marketing activities: the MCA System. Developed over 17 years, this solution quanties the ability of the whole marketing system to generate sustainable demand through: Marcoms ability to impact the target audience; The ability to convert this impact into market shares. Management and marketers around the world are using the MCA System to clearly understand what is contributing to brand experiences that sell, what needs improvement and what needs to be re-considered. They can move rapidly from data collection to effective indicators. Use of the MCA System transforms the marcom departments across the organisation into an effective, efcient function. For those that implement system thinking in marketing, the result is an ability to draw on the energy of tides rather than having to count on the effect of individual waves.

The 7 principles of accountability

To achieve transparency in marketing, managers must deploy practices that meet the 7 principles of accountability:

1 2 3 4 5 6 7

System Thinking: the whole is more important than the part.

Compulsory practice: early warning indicators are not optional. They serve as a basis for the enterprise and brand executives to manage marcoms with facts.

Comprehensive process: any / all funded marketing & communications activities need to be reported in their contribution to the effective and efcient generation of brand equity and sales.

On-going practice: must be gathered and reported frequently & timely for insightful decision making.

Universal practice: must be applied for all brands in our markets.

Operational process: must deliver actionable metrics for each stakeholder: KBIs for business managers & diagnostics for brand/marketing teams.

Technical & Empirical process: helping each stakeholder to understand and achieve contribution to the business.

NOTES 1 Fournaise Marketing Group, July 11, 2012 2 The Market ContactAudit (MCA) is a proprietary method to audit and track all marketing and communications activities from the consumers perspective. 3 http://en.wikipedia.org/wiki/W._Edwards_Deming

In the next papers about accountability in marketing we will look at:

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Starting with the right data: A company must decide what information it needs to operate its affairs, otherwise it will drown in data. (...) Businesses will have to learn that they must build their communication system on information up rather than information down. The structure must be based on the upward communication of information that enables those at the top to know what goes on at the bottom, at the sharp end. - Peter Drucker

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Repeat after me: Management Must Manage - Harold Geneen Discover the ultimate challenge to accountability in marketing. The MCA System delivers information-up data from the consumers perspective. Compliant with best practices in process management, the system is easy to calibrate and deploy, globally. All at a fraction of a dollar per thousands of dollars invested in marcom. The key? Management must manage.

If you have ideas or questions or would like to challenge the ideas outlined in this paper, I would love to hear from you Oscar Jamhouri, CEO ojamhouri@integration-imc.com