Measuring Marketing Productivity

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An important task of marketing research is to assess the efficiency and effectiveness of marketing activities Marketers increasingly are being held accountable for their investment and must be able to justify marketing expenditures to senior management. In a recent Accenture survey, 70 percent of marketing executives stated that they did not have a handle on the return on their marketing investments. Another study revealed that 63 percent of senior management said they were dissatisfied with their marketing performance measurement system and wanted marketing to supply prior and posterior estimates of the impact of marketing programs. With marketing costs already high and continuing to rise, senior executives try to limit unsuccessful marketing, failed product launches and expensive ad campaigns, extensive sales calls, and elaborate promotions.

Marketing research can help address this increased need for accountability. Two complementary approaches to measure marketing productivity are:

1. Marketing metrics to assess marketing effects and
2. Marketing-mix modeling to estimate causal relationships and how marketing activity affects outcomes.