How Marketers Spur Business Transformation Through Best-in-Class Measurement

Call it a mantra among the best marketers and C-suite executives. Meeting a company's strategic goals depends on ensuring every commercial activity is aligned with driving the best incremental business results. It's not about revenue or profit alone, but how marketing leaders and their colleagues maximize the value — and value perception — of their brands' products, services, and business operations. How they deliver profitable growth for the long term by making the best use of their resources to produce results beyond those that would have happened anyway. But the challenges are often short term.

It's a conundrum that can result in businesses struggling to balance sustainable, incremental outcomes for the long term with the need to prove year-over-year, or even quarter-over-quarter growth. This can also lead marketers to prioritize tactics that don't serve the company's long-term financial and strategic goals. Think aggressive discounting versus strategic pricing or cost cutting versus investment.

Managing complex, multi-layered operations — while remaining accountable to stakeholders and markets — requires a steady grip on the big picture and how each tactic employed contributes to it, from media to creative, assortment to promotions, and product to brand. It's an unenviable task for the C-suite with so many moving parts to corral and a temptation to incentivize short-term gains to demonstrate the continual growth Wall Street analysts and shareholders voraciously demand.

So, what if marketers could craft one measurement and analytics system to support these decisions and find the right balance between both short- and long-term financial goals, from long-range planning, to predicting the outcomes of spend reallocations, and to test-and-learn execution in campaigns?

What if marketing mix modeling (MMM) — traditionally considered a tool to measure the past performance of media and ad spending — could capture all the drivers of commercial performance and be a vehicle for business transformation?

Indeed, through a modern approach that switches focus from a backward-looking, annual appraisal to forward-looking, strategic insights, CMOs, CCOs and marketing leaders can unlock a powerful capability to stimulate a wide range of commercial and market possibilities — and confidently drive growth. The foundation needs a shared set of principles, language, and measures so that all decision-making across the business, encompassing both strategy and tactics, delivers growth through actions that deliver both short- and long-term incrementality.

Turn the Page

Every business is unique when it comes to aims, opportunities, and challenges. That's why it's key that any holistic measurement and analytical capability settle on the most effective KPIs, using the same common source and language of business performance, to serve the decision-making needs of multiple stakeholders across the enterprise.

It's also crucial to manifest change in organizational structures and employee relations to ensure this insight that alters the corporate mindset can successfully be acted upon, from global budget steering to local initiatives. A companywide learning culture is integral, ensuring decisions are cross-functional, based on driving growth.

Developing this insight engine requires marketers to be change agents, in the following areas:

• Seek C-suite buy-in. CMOs and marketers need to refashion their decision-making process. Insights are often delivered on a "fire and forget" basis, poorly socialized, and contained within a single department or team, easily ignored by others. Delivering insights across the organization not only engenders learning from the top-down but also exposes gaps in the organizational structure.

• ‍Define decisive moments and decision-makers. Marketers must ensure insights align with the rhythm of wider decision-making. For example, insights that support long-range planning and identifying investment cases need to align with the C-suite's multi-year strategic planning and how much is invested, where, and with what expected returns aligns with annual financial planning. Execution decisions should exist in line with campaign planning and intra-campaign steering. CMOs also need to make clear who is making each decision. While decisions must be driven top-down, marketing teams still need autonomy to make decisions that cyclically lead back to the strategy — from the bottom-up.‍

• Build a transformation program. The effort should encompass the commercial and strategic objectives of the C-suite, the data and modeling infrastructure that underpins analytics, and how to drive companywide engagement. The result will be the ability to support both micro and macro decisions from broad brand and portfolio objectives to specific product and service objectives at both local and global levels.

While many organizations continue to use methods that describe what happened in the past for media planning, there is a growing movement to engage stakeholders in more forward-looking approaches — steeped in sophistication — that leverage those retrospective approaches to predict the future.

The methodology is still grounded in marketing mix modeling and optimization (MMM/MMO), but the objective is to support a wide range of commercial decision-making through forecasting and scenario simulation techniques to understand the likely future impact of changing investments in different levers, from typical marketing remits, such as pricing, to decisions further up and down the value chain, such as distribution.

Flex Marketing Muscle

The LEGO Group helps illustrate how marketers can use measurement to spur change. In the last two years, the toy manufacturer has quietly yet quickly built a brand-new global measurement solution. It guides decisions from strategy to tactics, spanning a highly complex range of marketing activities, channels, franchises, partnerships, and audiences.

As the LEGO Group continues to create memorable cultural moments, such as its partnership with Formula 1, the company's ability to isolate the impact of individual investments when numerous short- and long-term effects overlap ensures it can drive incremental business growth, despite the complexity of its activities.

The program, which is a major departure from typical MMM efforts, has resulted in a complete shift in how data and insights are delivered and acted upon across the business, making unified marketing effectiveness a central business concern. The capability continually evolves, building deeper knowledge and broadening reach.

So how do marketers help make such transformational change a success? There are a few ways to alter the setting:

• Make a global change. Piloting in regions or specific to products is difficult. Start by tackling a particular commercial challenge, such as how to determine the best product mix for each store globally.

• Establish continuous learning as a key cultural need. Define what you need to learn, test, and change to keep improving substantial commercial outcomes, with strong leadership to drive learning forward.

• Drive adoption. Make sure team structures and hierarchies align to how you have defined decision-making collaboration and autonomy within your new processes. Celebrate pioneers and use them to support wider adoption.

Business transformation depends on a culture of collaboration and flexible relationships, both internally and between the right external parties that can make change happen and fostering a business environment in which people are as important as the technology, working in unison to deliver meaningful change.

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Ekimetrics is a partner in the ANA Data, Tech, and Measurement Partner Program.