From the Summer 2008 issue of the Institute's newsletter, Marketing Matters.

As budgets tighten at companies around the globe, executives are looking to their marketing teams for accountability, hoping to learn the true value of marketing actions. Chief Marketing Officers, in fact, frequently cite proving the value of marketing to others within their firms as their greatest challenge. The absence of commonly agreed-upon metrics to measure the success of marketing actions is a pressing problem confronting practitioners.

Carlson on Metrics, the Institute for Research in Marketing's third annual conference, brought together practitioners and academics from around the country to discuss the latest thinking in academia and industry on marketing metrics in five broad, thematic areas. Conference presenter Cesar Brea of Monitor Group reported that he was impressed with the "balanced mix of perspectives - top marketing research and analytics executives from some of the world's leading brands combined with leading academics in the field and leavened with some trusted advisors with deep roots in the business and the research and data sets to show for them."

This two-day, 14-session conference featured marketing experts from the University of Minnesota's Carlson School, Harvard Business School, UCLA's Anderson School, and the University of California at Davis, as well as industry leaders from Monitor Group, American Airlines, Wells Fargo, GfK Custom Research North America, General Mills, 3M, Cisco Systems, Kraft Foods, CVS Caremark, UnitedHealth Group, Carlson Marketing, and Millward Brown - several of which are Institute Advisory Board member companies. Considering the illustrious roster, session chair and board member Patricia D. Hughes, GfK, commented on both the high quality and the candor of the speakers, noting that "they seem far less guarded on the content at the university than at industry events." This free-flow of ideas and information made Carlson on Metrics a valuable gathering.

Creating effective metrics

The Anderson School's Dominique M. Hanssens kicked off the conference with a discussion of the long term impacts of marketing spending, arguing that "the long run" has no fixed end-point and smart marketers ensure that single marketing actions pay for themselves. Firms can get permanent lift from a temporary action, Hanssens pointed out, making those promotions potentially effective in both the short and long-term. Linda Vytlacil of Carlson Marketing expanded on Hanssens' theme, looking at brand health metrics, customer perceptions and behavior, and the drivers of consumer loyalty, engagement, and relationship strength. Vytlacil focused, specifically, on Carlson Marketing's RSx relationship strength metric and their proprietary research series, Carlson Relationship Builder. The program explores the role of marketing efforts in building customer relationships and those relationships' roles in driving business results. James S. Henney of Wells Fargo presented on evaluating the business impact of brand perceptions focusing on the impact and outcome. Rounding out the session, Gordon Wyner of Millward Brown spoke on the measurement of marketing effectiveness beyond just ROI.

Leveraging data

Once they have good data, how can practitioners make the most of their metrics? This afternoon session linked rich customer data to best practices on everything from pricing strategies to marketing communication development. Adrian Sosa of CVS Caremark, in particular, knows how to manage a wealth of customer information; with approximately 1 in 6 American consumer enrolled, CVS/pharmacy's ExtraCare is the largest retail loyalty program in the U.S. Citing ExtraCare as "the biggest differentiator for CVS," Sosa discussed the company's process to leverage this enormous database for swift and rigorous tests of marketing offers. Harvard's Sunil Gupta took the consumer focus to the web, presenting his more recently developed model for determining the customer lifetime values of "free customers" in user-to-user markets such as Monster and eBay. David Krajicek of GfK Custom Research North America introduced the subject of practical metrics in linking consumer data to business metrics. The University of Minnesota's Mark Bergen closed Thursday's sessions with a presentation on his decades of research on pricing, an often-overlooked strategic advantage.

Optimizing outcomes

In presentations highlighting advertising budgeting and allocation and multi-channel marketing optimization, Prasad Naik of the University of California, Davis, and Brea considered metrics as corporate planning tools. Their Friday morning presentations emphasized the relevance of wide-ranging data for marketing professionals from top executives - marketing's advocates within firms - to the campaign organizers who select and measure the results of individual advertising efforts. While Brea commented that "our technological reach seems to exceed our organizational grasp," Naik gave concrete examples of managing a portfolio of branding efforts at the venerable Ford Motor Company. The Carlson School's marketing department chair George John, a world-renowned expert on channel partners, closed the session with a presentation on guidelines for channel metrics.

Moving forward

With a panel discussion on the Metrics of Growth, the Carlson School's Rajesh K. Chandy, General Mills' Jeff Hunter, Kraft Foods' Gregory Michaels, and United Health Group's Tom Sullivan tackled the role of metrics in helping or hindering growth and innovation, sharing lessons-learned and new guidelines for creating metrics to pace and direct firms' initiatives. Then, following his presentation on the use of marketing metrics to orchestrate a turnaround plan for American Airlines, advisor to the chairman Robert Britton joined te conference's final session, a panel discussion on Metrics in a New World, alongside 3M's Lisa L. Love and the Carlson School's Jane E.J. Ebert. Ebert, also the session chair, presided over this exploration of the future of metrics, and Love and Britton addressed the challenges and opportunities involved in designing novel marketing metrics to keep up with the ever-changing, fast-growing world of global marketing.

Delivering what Brea called the "right content at the right time," Carlson on metrics proved a fantastic confluence of research and practice and a sociable, productive way to cap another year of innovative work on marketing at the Carlson School.