Outlook 2006: The Measurement Obsession: Going Too Far?
For the past few years, marketing has shown this level of obsession with measurement. You can hardly pick up an industry magazine, read an article online or go to a conference without being berated to do more and better measurement.
Don't get me wrong. I love measurement. I started in the direct marketing business, so I love the thrill of sending out a mailing and going to the mailbox to pick up the checks.
But here is where marketing's measurement obsession turns unhealthy: trying to measure everything by the single metric of how many sales each activity drove. Quantify the sales. Boil it down to numbers: sales = success; low sales = failure.
Marketing just isn't that simple.
People aren't that simple, and, after all, changing people's behavior is what marketing is all about. Different tactics reach consumers at different points in the decision cycle and succeed when they set that consumer on the path to purchasing your product, even if he or she doesn't buy it right then and there.
Knowledge Networks discovered this in the early 1990s in work it did for General Mills. Maximizing sales meant more trade promotions and freestanding insert coupons. But these actions drove the wrong kind of sales: the deal seekers, the "whatever's on sale this week" buyers.
Advertising drove more repeat sales, at higher price, more frequently. An online brokerage told me that eliminating online branding ads decreases clickthrough rates and new accounts from "button" ads on sites like Marketwatch.com.
These examples show that marketers can achieve a better balance, applying a variety of metrics appropriate to different elements of the marketing mix without going back to the fluffy metrics of awareness or recall.
So the cure to this obsession is to regain balance between qualitative and quantitative, to bring a mix of "high-tech/high-touch" to marketing (for those of you old enough to remember John Naisbitt's "Megatrends").
There are hopeful signs. The increasing use of ethnographic research puts structure around qualitative observations of consumer behavior. The Advertising Research Foundation's work on the emotional impact of advertising and consumers' engagement with ads moves beyond measuring just distribution (e.g., gross rating points, reach) to true communications impact. Its ongoing work to link that effect to sales impact will let brand marketers prove their contribution to brand value.
But this is really a back-to-the-future recommendation. David Ogilvy was a strong proponent of data-led marketing insight. His recommendation was to study the client's brands, its markets and its audiences intently. Then go off and garden. Or jog. Or whatever activity unhooked that rational, conscious part of the brain and let the subconscious digest the data intuitively to bubble up new insights. Data, combined with intuition, creates winning strategies.
The cure for the measurement obsession isn't to abandon data and go back to the couch-potato metrics of old. Combine the numbers that new measurement techniques and technologies provide with your knowledge of your consumers. Then ask yourself, "What else do these results tell me about the wants, needs and motivations of my consumers?"
Then go for that jog. But don't ask me to come along. I'll be gardening.