New, Rigorous Approaches to Quantifying Marketing's Value

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While most executives recognize that effective marketing is a critical driver of success, it is also true that marketing investments are exceptionally vulnerable during cyclical downturns. On the surface, this is because marketing activities can be cut back for limited periods of time without directly affecting a company’s operations. But the more fundamental reason is a lack of accountability: The contribution of marketing to shareholder value is rarely demonstrated

Increasingly, Accenture is finding that C-level executives are interested in new, rigorous approaches to quantifying the value of marketing. Specifically, we have seen marketing’s contribution move beyond image, sales and market share into the realm of overall business growth strategies. By using econometrics and marketing investment allocation, marketing executives can now—with an unprecedented level of precision—identify the most effective marketing activities and even help forecast demand.

The result is not only a more fiscally disciplined approach to marketing but, as a number of companies have shown, sharpened marketing strategies, increased sales revenue and even lower inventory costs.

In today’s competitive world, it is no longer acceptable to let business intelligence walk out the door or for marketing data to lie fallow. That is why a number of analytical methodologies have recently become popular in the more innovative marketing organizations in the United States, Europe and Asia. These analytical methodologies, which include econometric modeling and marketing investment allocation, enable marketers to capture and translate vast amounts of data into business insights. The result? The potential for not just better marketing decisions but better business results.

Laurent Colard, is a manager of in the Accenture Customer Relationship Management division.