Foreword

Despite its importance, marketing is one of the least understood, least measurable functions at many companies. With sales force costs, it accounts for 10 percent or more of operating budgets at a wide range of public firms. Its effectiveness is fundamental to stock market valuations, which often rest upon aggressive assumptions for customer acquisition and organic growth. Nevertheless, many corporate boards lack the understanding to evaluate marketing strategies and expenditures. Most directors—and a rising percentage of Fortune 500 CEOs—lack deep experience in this field.

Marketing executives, for their part, often fail to develop the quantitative, analytical skills needed to manage productivity. Right-brain thinkers may devise creative campaigns to drive sales but show little interest in the wider financial impact of their work. Frequently, they resist being held accountable even for top-line performance, asserting that factors beyond their control—including competition—make it difficult to monitor the results of their programs.

In this context, marketing decisions are often made without the information, expertise, and measurable feedback needed. As Procter & Gamble’s Chief Marketing Officer has said, “Marketing is a $450 billion industry, and we are making decisions with less data and discipline than we apply to $100,000 decisions in other aspects of our business.” This is a troubling state of affairs. But it can change.

In a recent article in The Wall Street Journal, I called on marketing managers to take concrete steps to correct it. I urged them to gather and analyze basic market data, measure the core factors that drive their business models, analyze the profitability of individual customer accounts, and optimize resource allocation among increasingly fragmented media. These are analytical, data-intensive, left-brain practices. Going forward, I believe they’ll be crucial to the success of marketing executives and their employers. As I concluded in the Journal:

“Today’s boards want chief marketing officers who can speak the language of productivity and return on investment and are willing to be held accountable. In recent years, manufacturing, procurement and logistics have all tightened their belts in the cause of improved productivity. As a result, marketing expenditures account for a larger percentage of many corporate cost structures than ever before. Today’s boards don’t need chief marketing officers who have creative flair but no financial discipline. They need ambidextrous marketers who offer both.”

In Marketing Metrics, Farris, Bendle, Pfeifer, and Reibstein have given us a valuable means toward this end. In a single volume, and with impressive clarity, they have outlined the sources, strengths, and weaknesses of a broad array of marketing metrics. They have explained how to harness those data for insight. Most importantly, they have explained how to act on this insight—how to apply it not only in planning campaigns, but also in measuring their impact, correcting their courses, and optimizing their results. In essence, Marketing Metrics is a key reference for managers who aim to become skilled in both right- and left-brain marketing. I highly recommend it for all ambidextrous marketers.

John A. Quelch, Lincoln Filene Professor of Business Administration and Senior Associate Dean for International Development, Harvard Business School