1 " 111" I li " 111 FUNDAÇÃO GETULIO VARGAS ESCOLA DE ADMINISTRAÇÃO DE EMPRESAS DE SÃO PAULO PATRICK WILLlAM HERDE MARKETING PERFORMANCE MEASUREMENT: verview f appraches and practices fr high technlgy firms SÃO PAULO 2004
2 PATRICK WILLlAM HERDE MARKETING PERFORMANCE MEASUREMENT: verview f appraches and practices fr high technlgy firms Dissertaçã apresentada à Escla de Administraçã de Empresas de Sã Paul da Fundaçã Getuli Vargas, cm requisit parcial para btençã d títul de Mestrad Prfissinal em Administraçã de Empresas Camp de cnheciment.: Administraçã Mercadlógica Orientadr: Prf. André Trres Urdan FGV-SP / BIBLIOTECA SÃO PAULO 2004 ~
4 Herde, Patrick William. Marketing perfrmance measurement: verview f appraches and practices fr high technlgy firms / Patrick William Herde f. Orientadr: André Trres Urdan. Dissertaçã (MPA) - Escla de Administraçã de Empresas de Sã Paul. 1. Marketing. 2. Marketing - Administraçã. 3. Marketing - Planejament. 4. Marketing - Prcess decisóri. 5. Marketing - Aspects tecnlógics. 6. Administraçã de empresas -Indicadres. 7. Administraçã de empresas Prcess decisóri. 8. Tecnlgia. I. Urdan, André Trres. 11. Dissertaçã (MPA) - Escla de Administraçã de Empresas de Sã Paul Títul. CDU 658.8
5 PATRICK WILLlAM HERDE MARKETING PERFORMANCE MEASUREMENT: verview f appraches and practices fr high technlgy firms Dissertaçã apresentada à Escla de Administraçã de Empresas de Sã Paul da Fundaçã Getuli Vargas, cm requisit parcial para btençã d títul de Mestrad Prfissinal em Administraçã de Empresas Camp de cnheciment: Administraçã Mercadlógica Data de aprvaçã: I / Prf. Dr. André Trres Urdan (Orientadr) FGV-EAESP Prf. Rubens da Csta Sants FGV-EAESP Prf. Dirceu Trnavi de Carvalh FEARP-USP
6 ACKNOWLEDGEMENTS Gstaria de agradecer a Prf. André pela ajuda e pel esfrç na rientaçã deste trabalh. Fi um grande prazer participar da disciplina Estratégia de Marketing e itraba4har,cm vcê nesta mngrafia. Esper que a gente fique sempre em cntat. Também gstaria de estender grandes abraçs as meus clegas de marketing que 'cntribuíram cm entrevistas para esta dissertaçã. Aprendi muit mais de vcês d ~ue está capturad só nestas flhas.
7 RESUMO Um levantament de 320 executivs de marketing feit pel Cnselh CMO e divulgad em junh de 2004 indicu que pucas cmpanhias de alta tecnlgia (mens de 20% das empresas entrevistadas) têm desenvlvid medidas e métricas úteis e expressivas para as suas rganizações de marketing. Prém a pesquisa também revelu que cmpanhias que estabeleceram medidas frmais e cmpreensivas atingiram resultads financeirs superires e tiveram mais cnfiança d CEO na funçã de marketing. Esta dissertaçã prvê uma visã geral da infrmaçã precisa para executivs de marketing entenderem e implementarem prcesss para mediçã de perfrmance de marketing (MPM) em suas rganizações. Ela levanta questões para gerentes de marketing na industria de alta tecnlgia cm respeit às demandas para mair respnsabilidade final, valr de mediçã para melhrament ds prcesss de marketing, iniciativas para determinar a lucratividade ds investiments em marketing, e a imprtância das atividades de marketing ns relatóris crprativs. Esta dissertaçã defende a implementaçã de MPM, mapeand seus benefícis de mediçã para ambs gerentes de marketing e as suas empresas. trabalh lg explra alguns cnceits gerais de mediçã de marketing e investiga algumas abrdagens a MPM prpstas pela industria, pela cmunidade acadêmica, e pels analistas. Finalmente, a dissertaçã descreve algumas práticas que td gerente de marketing na industria de alta tecnlgia deve cnsiderar quand adtand MPM. As sugestões sã gerais, mas devem familiarizar leitr cm as infrmações precisas para habilitar prcesss e rigr na sua rganizaçã cm respeit a MPM. KEYWORDS: 1. Marketing. 2. Marketing - Administraçã. 3. Marketing - Planejament. 4. Marketing - Prcess decisóri. 5. Marketing - Aspects tecnlógics. 6. Administraçã de empresas - Indicadres. 7. Administraçã de empresas - Prcess decisóri. 8. Tecnlgia
8 ABSTRACT A June 2004 survey by the CMO Cuncil f 320 senir marketing executives indicated that few high techcmpanies (Iess than 20%) t date had develped meaningful, cmprehensive measures and metrics fr their marketing rganizatins. In fact ver 80% f the cmpanies surveyed expressed dissatisfactin with their ability t benchmark marketing prgrams business impact and value. Hwever, the survey als revealed that cmpanies that establish a frmal, cmprehensive measurement prgram achieve superir financiai returns and have higher CEO cnfidence in the marketing functin. This thesis prvides an verview f infrmatin required fr marketing executives t understand and implement marketing perfrmance measurement (MPM) prcesses at their rganiza:tins. It 'surveys the latest issues facing marketers in the high technlgy industry regarding the demands fr greater accuntability, value f measurement fr imprving marketing prcesses, initiatives t determine marketing return n investment (MROI), and the imprtance f marketing measures in crprate reprting. The thesis makes a case,fr MPM by utlining the benefits f measurement fr bth marketers and the crpratin. The wrk then scpes 'sme general marketing measurement cncepts and delves int appraches t MPM as prpsed by industry, academics, and analysts. Finally, the thesis enumerates a: few practices that every high tech marketer shuld explre when adpting MPM. "fhe tips are generalized, but shuld familiarize any CMO, vice president, r directr f marketing wh is tasked with bringing greater accuntability t her rganizatin with a general verview f what's needed t enable measurement prcesses and rigr with regards t MPM. KEYWORDS: 1. Marketing. 2. Marketing - Administratin. 3. Marketing - Planning. 4. Marketing - Decisin-making prcesses. 5. Marketing - Technlgical aspects. 6. Business Administratin - Indicatrs. 7. Business Administratin - Decisin-making prcess 8. Technlgy
9 TABLE OF CONTENTS 1 INTRODUCTION The prblem defined Scpe f this wrk Methd 4 2 SITUATIONAL ANAL YSIS The buzz arund MPM Marketing viewed as an investment t drive new business Marketing executives enhancing psitin at the budget table 8 thrugh MPM Marketing department imprving practices with MPM MPM and business prcess imprvement Increased scrutiny frm bards means mre marketing metrics in 11 crprate reprts 2.2 Marketers still d nt have the reprting that they need Agencies withut MPM are a drag n crprate marketing MPM deficiencies result in repeated mistakes Benefits f MPM Marketing can demnstrate its value as a result f MPM MPM prvides budget and cst justificatin MROI MPM addresses accuntability t senir executives and directrs MPM is fundamental fr e-business Firms are failing t implement MPM r failing in their 25 measurements
10 2:6.1 Implemented measures fail t capture marketing effectiveness 'Sils f market and custmer knwledge cnfund MPM 26 implementatin Marketing desn't have the expertise t implement MPM Change management required t win ver MPM detractrs Autmatin is nt the silver bullet fr MPM 28 3 DETERMINING WHAT TO MEASURE Scpe f marketing Pan-cmpany marketing Functinal marketing Marketing efficiency versus marketing effectiveness Diagnstics versus derivatives 'Financiai versus nn-financial measures Selecting measures Metrics Market share Innvatin Custmer satisfactin Marketing rientatin :5 Marketing assets List f metr,ics in use by firms 47 4 APPROACHES TO MPM Market-mix mdeling Reactin marketing Crrelative measurement Integrated marketing screcard 60
11 4.5 Chartered Institute f Marketing Benchmarking Assessment Philip Ktler marketing audit Web analytics 68 5 PRACTICES FOR MPM Hw t get started Measure perfrmance relative t strategy Track perfrmance relative t cmpetitrs Track perfrmance relative t custmers Track perfrmance ver time Mdel perfrmance Guidelines fr implementing MPM Timeline fr implementing MPM Dashbards Integrating MRM as part f a MPM initiative New technlgies make MRM a likely slutin fr MPM MRM and marketing budget tracking Advanced analytics, ptimizatin, frecasting Index f MRM slutins Marketers are driving the demand fr technlgy adptin in their 86 department 6 CONCLUSION 88 REFERENCES 90 ATTACHMENTS 97 Attachment A - Questins used during interviews with Silicn 97 Valley marketing executives
12 1 1 'INTRODUCTION The CFO 1 thinks that marketing is like a black hle. There's n way t systematically allcate dllars and track a return n marketing investment. Meanwhile, the CI0 2 thinks that marketing needs t rganize it systems better-getting rid f ad hc reprts and centralizing custmer infrmatin and sales resurces sil-ed n managers' laptps. And the VP f HR 3 is wndering if marketing is allcating its human resurces in the mst effective manner. In many rganizatins, the CM0 4 desn't have the capability t readily address any f these questins. - Management Cnsultant (BOUCHARD,2004) 1.1 The prblem defined Results f a survey f 320 senir marketing executives published in June 2004 by the CMO Cuncil 5 indicated that few high technlgy cmpanies (Iess than 20%) t date had develped meaningful, cmprehensive measures and metrics fr their marketing rganizatins. In fact, mre than 80% f cmpanies surveyed expressed dissatisfactin with their ability t benchmark the business impact and value f their marketing prgrams. Hwever, the CMO Cuncil als fund that cmpanies that establish "a frmal, cmprehensive measurement prgram achieve superir financiai returns and have higher CEO cnfidence in the marketing functin" (MEASURES, 2004, p. 1,7). 1 Chief Financiai Qfficer 2 Chief Infrmatin Qfficer 3 Vice President f Human Resurces 4 Chief Marketing Qfficer 5 The CMQ Cuncil is a Silicn Valley-based nn-prfit rganizatin dedicated t executive levei knwledge exchange, thught leadership and persnal relatinship building amng senir marketing and brand decisin-makers in the glbal technlgy industry. The Cuncil perates wrldwide under the auspices f GlbalFluency, which has mre than 50 ffices in 27 cuntries.
13 2 The CMO Cuncil reprt arrives at a challenging perid fr marketing executives wh are facing mre demand than ever fr demnstrating t the CFO and ther crprate fficers, bard f directrs, and ther internai and externai cnstituencies the quantitative value f their effrts. Marketing, which has traditinally thught f itself as mre f an art than a science, is "the last f the crprate functins t frmally develp and adpt prcesses and standards that can be tracked and measured quantitatively" (MEASURES, 2004, p. 2). Given the decline in technlgy spending at the beginning f the decade and the recurrent cst-cutting measures that are symptmatic f the industry's dwnturn, n marketer tday can avid having his feet put t the fire by the finance department. Nt surprisingly, the expertise required t implement rigrus measurement prcesses and perfrm cmplex data analyses t understand the links between custmer behavir attributes and marketing initiatives des nt typically reside in the marketing department. Marketers "have traditinally struggled with the quantitative measures f marketing prgrams and effrts" (MEASURES, 2004, p. 3), managing data with ad hc reprts in spreadsheets and s r summarized in Wrd dcuments and PwerPint presentatins. At the same time, perceptins that marketing perates like a black bx and that investments in advertising are like puring mney int a black hle serve nly t weaken the psitin f the Chief Marketing Officer (CMO) at the budget table-an unfavrable situatin during perids f recurrent budget slashing and cst cutting (BOUCHARD, 2004; FRANCISCOLO, 2004). The call t actin fr marketing executives tday is t adpt stringent prcesses fr measuring the utcmes f their investments with the bjectives f demnstrating a return n spend, ptimizing prgram and resurce perfrmance, and better cmmunicating the verall value f marketing regarding the achievement f crprate bjectives. Hwever, the questin n the minds f many marketers is just hw t devise and implement such prcesses.
14 3 1.2 Scpe f this wrk This thesis prvides an verview f aspects related t implementing marketing perfrmance measurement (MPM) prcesses at firms. The wrk is rganized int fur majr chapters: a situatinal analysis f marketing measurement tday in the high technlgy industry, an verview f cncepts related t marketing measurement, summaries f a few appraches t measurement prpsed by industry, analysts, and academia, and finally prpsed practices fr implementing MPM. Chapter 2 ffers an analysis f the state f marketing measurement in the high technlgy industry, surveying the latest issues facing marketers regarding the demands fr greater accuntability, value f measurement fr imprving marketing prcesses, initiatives t determine marketing return n investment (MROI), and the imprtance f marketing measures in crprate reprting. The thesis implies that-as a result f measurement deficiencies-sme marketers d nt have the infrmatin that they need fr ptimal decisin-making. The thesis enumerates prblems caused by pr measurement and makes a case fr MPM by utlining the benefits f measurement fr bth marketing departments and the crpratin. Chapter 3 reviews a few basic cncepts f measurement, defining a scpe f what can be measured with respect t marketing and distinguishing between different kinds f measures. This chapter includes a sectin n financiai versus marketing measures and the increasing imprtance f marketing measures in crprate reprting. The thesis then defines in detail a few measures that are f use t the high technlgy industry. Finally, it charts a thrugh catalg f measures cmmnly adpted by marketers. Chapter 4 utlines a number f appraches t marketing measurement that have been prpsed by industry, analysts, and academia fr diverse areas f marketing. It is nt the purpse f this chapter t suggest that marketing managers shuld adpt these appraches r that these appraches in any way represent standards. Rather, examining these appraches prvides insight int the breadth and cmplexity f MPM. Studying their benefits and faults is infrmative when planning hw t custmize measurement prcesses fr individual rganizatins.
15 4 Finally, Chapter 5 enumerates a few practices-sme suggestins, timelines, and special attentin t the rle f sftware applicatins-that every technlgy marketer shuld cnsider when adpting MPM. The tips are generalized, but shuld familiarize any CMO, vice president f marketing, r directr wh is tasked with bringing greater accuntability t her rganizatin with a general verview f what's needed t enable measurement prcesses and rigr with regards t MPM. 1.3 Methd This thesis surveys a wide array f research with regards t MPM frm bth industry and academia. Its thrugh bibligraphy includes resurces frm academic jurnals such as Marketing Management, Juma/ af Targeting, Measurement and Ana/ysis fr Marketing, Marketing Science, and Juma/ f Marketing. The thesis pulls extensively frm high tech industry analyst reprts frm surces such as IDC 6, Frrester 7, and Gartner, Inc. 8, amng thers, as well as frm bks, presentatins, and articles by marketing measurement and MROI gurus such as James Lenskld and Tim Ambler. The research is runded ut with news frm recent trade publicatins such as Marketing News and CRM Magazine. N publicatin referenced is mre than ten years ld. Balancing the mre theretical and cnceptual infrmatin prvided by the library research, seven senir marketing executives frm leading Silicn Valley based cmpanies in the semicnductr, enterprise sftware, applicatin service prvider, and management cnsulting sectrs were interviewed fr this thesis. The rientatin f the interviews was explratry and prbed executives' pinins as they related t the 6 IDe is a glbal market intelligence and advisry firm in the infrmatin technlgy and telecmmunicatins industries. It analyzes and predicts technlgy trends s that its clients can make decisins n IT purchases and business strategy. With 40 years in business, IDe has ver 700 analysts in 50 cuntries. 7 Frrester is an independent technlgy research cmpany that prvides advice abut technlgy's impact n business. Business, marketing, and IT prfessinals wrldwide wrk with Frrester t align their technlgy investments with their business gals. The firm was established in Gartner, Inc. is a leading prvider f research and analysis n the glbal IT industry. Gartner helps its clients make infrmed technlgy and business decisins by prviding in-depth analysis and advice n virtually ali aspects f technlgy. The company has been in business fr 25 years.
16 5 relevance f MPM in marketing and crprate management as well as appraches t measuring varius areas f marketing. The infrmatin captured frm these interviews was qualitative in nature, but nnetheless f high value t understanding the issues and appraches t MPM. The interviews prvided practical pints f view that guided much f the rganizatin and the cnclusins f this thesis. Due t the cnfidential nature f the interviews, legal implicatins related t the use f trademarks, and respect fr infrmatin ffered that culd be f high cmpetitive value, the thesis des nt divulge either the cmpanies represented r transcripts f the interviews. Hwever, the wrk cites the subjects extensively, and a list f the questins used in the interviews is included as Attachment A. The cntent f this wrk is slanted twards the interests f the high technlgy industry, a particular prfessinal interest f the authr. As a result, much f the research fcused n MPM specifically as it relates t marketing high technlgy prducts and services. (As mentined abve, ali f the executives interviewed fr the thesis wrk in the technlgy industry.) Hwever, the thesis ffers infrmatin and cnclusins f high relevance t marketers in ther sectrs as well. The practices fr MPM prpsed in Chapter 5 are applicable hrizntally acrss industries.
17 6 2 SITUATIONAl ANAL YSIS I learned that it really requires patience t tlerate the cycles f a develping business lng-term. Success wuld be rted in ur custmer relatinships and ur ability t build the brand ver time. - Directr f Marketing (GONZALEZ, 2004) 2.1 The buzz arund MPM The glbal Infrmatin Technlgy (IT) slump f the last few years put technlgy marketers under intense pressure t demnstrate results justifying every prgram and campaign dllar budgeted. The drught in IT spending and resulting industry cnslidatin, lay-ffs, and budgetary cut-backs nt nly frced tech marketers t demnstrate MROI, but "[u]nstable market cnditins and intensifying cmpetitin in the [...] industry [...] frced marketing t prve itself as an peratin whse effrts clearly generate strategic and tactical results t the bttm line" (REVERS, 2004, p. 6). As a result, n marketing executive tday can escape "having his feet put t the fire by the CFO and having t justify dllars" (MADDOX, 2003). Withut a dubt, MPM is a trend that is very much n the mind f mst executives as "IDC has reprted that 50% f CMO's are under a direct mandate t prvide better metrics and measurement fr the marketing department" and the CMO Cuncil reprts that "70% f cmpanies with revenues greater than US$500 millin rank marketing measurement a high pririty" (MEASURES, 2004, p. 1, 2, 6). Indeed, marketers tday face far greater crprate demands fr accuntability and prven return n investment than ever. Gne are the heady days f the late 1990s when a "marketer culd execute a campaign withut tying it back t bttm line financiais"
18 7 (MEASURES, 2004, p. 1, 2). In the current ecnmic climate, "marketers relying n metrics like reach r market share that dn't shw return n investment are like factries reprting hw many widgets they made but ignring hw many were actually sld" (VANBOSKIRK, 2001, p. 5). Greater demand fr metrics is cmplicated by the fact that marketers "traditinally lacked visibility and insight int their [...] prgrams and activities" (COLLlNS, 2004, p. 1). These days, marketers strain t articulate the value f their effrts given nly "limited data and lack f data granularity" t supprt gut feelings r ad hc analyses regarding the impact f their prgrams (AMBACH, 2000, p. 23). Nt surprisingly, marketing-which has traditinally thught f itself as mre f an art than a science-"has been the last f the crprate functins t frmally develp and adpt prcesses and standards that can be tracked and measured quantitatively" (MEASURES, 2004, p. 2). Cmpanies that are driven by research and develpment (R&D) and technlgy innvatin have a strng need fr marketing. The ability t cmmercialize innvatin int new prducts that capture end-users' needs and preferences is a basic determinant fr the lng-term success f a technlgy firm: "marketing capability strngly influences the width f applicability f innvatins, Le., a firm's marketing capabilities enhances its ability t generate innvative technlgies that have applicatins acrss a range f industries" (DUTTA, 1999, p. 547). At the same time, "a past track recrd f cnsistent innvatin is a credible signal t [...] custmers f the firm's cntinued excellence in a technlgically evlving market" (DUTTA, 1999, p. 547). Given their rle influencing custmers, technlgy marketers are generally well-resurced in their missin t "infrm custmers f the technlgical excellence f their firm" (DUTT A, 1999, p. 547). Given its externai perceptin as being a black bx peratin that cnsumed a high percentage f crprate spending, marketing has always represented an early and smewhat easy target fr crprate cst-cutting initiatives (CLARK, 2000, p. 357). Dnvan Neale-May, executive directr f the CMO Cuncil cnfirms that "[m]arketing is a significant line-item cst fr mst technlgy cmpanies, and there is a lt mre pressure n cmpanies t justify thse expenditures" (COMPTON, 1 July 2004).
19 8 Tday, MPM "is attracting academic and managerial attentin with an urgency and scpe previusly unprecedented in the field's histry" (CLARK, 1999, p. 711). The buzz arund marketing perfrmance measurement represents a cnvergence f several develping trends as marketers wrk t make a science ut f the art and develp a strnger discipline f internai measurement (MEASURES, 2004). These tendencies are treated in the fllwing sectins: Marketing viewed as an investment t drive new business After years f dwnsizing and cnslidatin thrugh the IT slump, technlgy firms are reaching a pint f diminishing returns n increasing prfits simply by cutting csts and increasing peratinal efficiencies (AMBLER,?). Marketing, especially amng firms that invested in innvatin thrugh the dwnturn, is seen as a driver f new sales and grwth. At the same time, firms are taking unprecedented precautin in evaluating the benefits f each new marketing dllar invested (CLARK, 1999). CFOs are taking the marketing department t task n the "imprtance f develping useful, accurate metrics that culd effectively demnstrate the value f marketing as an investment fr which the crpratin" receives a slid return (REVERS, 2004, p. 3-4). In essence, marketing investment is being judged n the same fundatin as ther peratinal expenditures Marketing executives enhancing psitin at the budget table thrugh MPM Marketing executives are frustrated by traditinal measures that prly cmmunicate the value f their effrts. In budget negtiatins with their peers, marketers are anxius t strengthen their psitins with the kind f analytical supprt and financiai justificatin that in the past wuld have been expected nly frm an peratinal r financiai executive (CLARK, 1999).
20 9 It may seem cunterintuitive, but research demnstrates that marketers reprt 17% mre metrics in use than their finance peers. Accrding t recent studies, with "the exceptin f sharehlder value and number f new custmers, finance [...] reprted use f a given metric was always lwer than marketers" (AMBLER,?, p ). These studies seem t indicate that while marketers' familiarity with their wn measures is high, awareness f adpted marketing measures utside f the 'black bx' f marketing may be lw. Thus, by systematizing the recrding and cmmunicatin f measures already in use, the marketing department can gain better credibility in negtiatins with ther departments. Histrically, the CFO fund it easy t cut the marketing budget because he culd never quantify its value. With a renewed fcus n measurement addressing wider crprate demands fr accuntability, executives benefit with imprved infrmatin regarding marketing successes. In ther wrds, MPM nt nly enables marketing t quantify perfrmance, it als enables marketers t value and cmmunicate marketing's wins. Beynd mere accuntability, MPM prvides real substance behind marketing activities (COMPTON, 1 July 2004). This enables.imprved psitining fr the marketing department during debates when prgrams may be n the budgetary chpping blck Marketing department imprving practices with MPM Marketers are analyzing with greater detail prgram and campaign perfrmance "t assess prgress and identify key areas f imprvement" (CONNOR, 1999, p. 734). While imprving practices shuld be a basic learning frm every marketing prgram, autmatin and analytics are enabling marketers t delve int the data f their prgrams fr richer detail than ever n what's wrking and what's nt-hlding nt nly crprate managers accuntable, but als agencies, mail-huses, prductin firms, and ther partners f the crprate marketing department. Technlgy marketers in the enterprise sftware sectr, fr example, are under intense pressure frm senir management t prve the perfrmance f their campaigns:
21 10 b-t-b marketers are demanding mre sphisticated measurement services frm their agencies and media utlets. They want t see tangible results frm their marketing and advertising - nline and ftline - including leads generated, sales clsed and behaviral data (such as where the prspect is in the purchasing cycle). (MADDOX, 2003) Imprved MPM enables management t identify what are the least efticient prgrams r strategies, reducing nging expsure t lw-return activities and increasing investments in high ptential activities. Management uses MPM as a "systematic apprach t benchmarking which pinpints prblems s that they can be seen and remedied" (WOODBURN, 1999, p. 793). Withut measurement "management has a rather small range f tls in the tlbx with which t analyse [day-t-day] marketing implementatin" (WOODBURN, 1999, p. 793) MPM and business prcess imprvement Ppular new strategies fr business prcess imprvement (BPI) such as the balanced screcard 9 are frcing executives t select what marketing measurements shuld be included as part f dashbards reprting crprate perfrmance. Thrugh the prcess f implementing BPI, firms adpt screcards aligning marketers in terms f setting bjectives and determining strategies. As a result f the new prcesses, cnsistent metrics are available fr benchmarking histrical marketing perfrmance and that f cmpetitrs (REVERS, 2004). In mst firms, the task f marketing, which is primarily cncerned with generating business, is usually delegated t middle managers (AMBLER, 2000). MPM is the 9 Balanced screcard is an apprach t strategic management develped in the early 1990's by Drs. Rbert Kaplan (Harvard Business Schl) and David Nrtn. Recgnizing sme f the weaknesses and vagueness f previus management appraches, the balanced screcard apprach prvides a clear prescriptin as t what cmpanies shuld measure in rder t 'balance' the financiai perspective. The balanced screcard is a managenient system (nt nly a measurement system) that enables rganizatins t clarify their visin and strategy and translate them int actin. It prvides feedback arund bth the internai business prcesses and externai utcmes in rder t cntinuusly imprve strategic perfrmance and results. When fully deplyed, the balanced screcard transfrms strategic planning frm an academic exercise int the nerve center f an enterprise (BALANCED).
22 11 prcess required t make thse managers accuntable. When middle managers measure marketing, they typically fcus n prgram r campaign levei measures. Intelligence frm such measures enables management t make cnsidered revisins in strategy and tactics that imprve marketing results. In rder t imprve business prcesses and thus drive better results, MPM is structured arund measures that lend t management bjectives: an "rganisatin's measurement system strngly affects the behavir f managers and emplyees" (DAVIDSON, 1999, p. 771). MPM discurages "shrt-termism" by frcing bth management and marketers t answer t analyses ver time (AMBLER, 2000, p. 60). It can als make a firm mre market-riented which has lng-term benefits as "custmer-fcused cmpanies are mre prfitable in the lng term than thse primarily cncerned" nly with utput (AMBLER, 2000, p. 60). Fr example, a technlgy cmpany with a grwth strategy shuld align its marketing measures accrdingly: "If cmpany reprting metrics fcus mre strngly n activity that influences future success, managers may give these areas mre attentin, and be less inclined t cut back [...] the 'the mtrs f grwth.' Such a change culd make cmpanies mre custmer and future driven" (DAVIDSON, 1999, p. 771) Increased scrutiny frm bards means mre marketing metrics in crprate reprts Research suggests that crprate bards devte nly abut 10% f their time t custmers, spending mre time n hw a firm uses cash than hw it generates it. Bards that "want t knw what the cmpany's future cash flw willlk like are starting t examine where the mney cmes frm: the market" (AMBLER, 2000, p ). Since marketing is the surce f a firm's future cash flws, the marketing department is gaining increased visibility with crprate bards. III-advised advertising initiatives during the late 1990s were a determining fact r in sme failures amng technlgy cmpanies after the April 2000 stck market crash.
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