Positioning master Al Ries, writing in AdAge, has come out strongly against a metrics-only approach to marketing and business. The article, "Metric Madness: The Answer to Mathematical Failure Seems to Be More Math," can be found here. (Registration may be required.)
Some excerpts:
What is Metric Madness? It's the notion you can run anything by the numbers, and it's become the hottest concept in business today.
The marketing community eats this stuff up. Nobody generates more data than they do.
Perhaps it takes mathematical skills to run a major corporation today. But if the CEO loads up the company with similar people, he or she will squeeze the life out of the organization.
If you run a company by the numbers, you'll eventually run the company into the ground. You might be successful in the short term, but never in the long term, as the financial crisis demonstrates.
Left-brain managers are verbal, logical and analytical. Nothing wrong with that, as long as management also takes the remedy to counteract its overemphasis on mathematics.
The antidote to management, to paraphrase Club Med, is marketing.
Almost everything about marketing is the opposite of the typical manager's approach to running a business. Marketing is illogical and definitely not analytical. Marketing is intuitive and holistic.
We're concerned, however, that this message is being ignored by the marketing community, who seem to be drifting from the right to the left -- from a right-brain approach to a left-brain approach.
Take the current emphasis on marketing ROI, return on investment. In most cases, to determine the ROI of a marketing program is an expensive exercise with little or no value.
An experienced marketing executive, in my opinion, instinctively knows whether a marketing program is working or not. Does Apple need to waste money trying to determine the ROI of its marketing efforts?
What Apple is doing is working. What Microsoft is doing is not. You don't need ROI numbers to figure this out.
Then there are many situations where the ROI is zero and yet the marketing expenditures are worthwhile. Take leadership, for example.
Nothing about a brand is more valuable than its market leadership. If a brand loses its leadership, it loses its most significant advantage in the marketplace. That valuable position is worth protecting. And advertising is the best way to protect it. Nike in athletic shoes. Heinz in ketchup. Rolex in watches.
Suppose a leading brand spends $50 million a year on advertising. And suppose that brand's market share doesn't budge at all. Was that $50 million wasted? Not necessarily.
Advertising is more like insurance than it is like an investment. What's your "return on investment" of a five-year term life insurance policy if you don't die? Zero.
But, of course, you don't buy an insurance policy to make money. You buy an insurance policy to protect your family in case you die.
The overall practice of marketing is not mathematically based, although subsets of the discipline may be: direct marketing, research, media selection.
Marketing is certainly not 70% mathematics. It's not even 1% mathematics. (As a math major in college, I don't think I've ever used integral calculus or differential equations or any other mathematical concept in our marketing practice.)
Marketing is a discipline that can only be learned by exposure to marketing case histories over an extensive period of time.
Mathematics is logical. Marketing is not. That's why marketing is so difficult to learn.
Mr. Ries makes a number of different points. Readers, what do you think? Where is he on target, and where is he off?
May 5, 2009
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7 comments:
Kudos on a great article. I've been struggling for years to eloquently make this point to my clients. But I usually begin with a stutter and end with a deep sigh. Thanks for the ammunition!
I agree with a lot of this article; great marketing is never about numbers, rather the influence it has on your customers and prospective customers.
Apple is a perfect example- you know the marketing program is working because you can see it reflected in our culture. It was the same with Nike during the "Like Mike" days.
The part I disagree with his article is that he compares insurance to advertising to make the case to advertise in order to maintain brand leadership. The problem with this is that holding insurance will never hurt you; however, he fails to mention that advertising done incorrectly will hurt your brand a lot, way more than not advertising at all.
Look no further than KFC Grilled Chicken for a perfect example of this.
Dino, glad you enjoyed!
Alex, great comment about advertising done incorrectly. You make a very astute point - any advertising is not necessarily better than no advertising.
Thank you both for your comments!
First the 'dream', then the numbers. Without the dream, you will never build anything new.
Without the numbers, you will join the 80% of executives who report that they perform in the top 10%.
You cannot build a house without measuring, but you can't build the house by just measuring.
Thanks for your comment, Melch. I love the house analogy, and share your view that some measurement is necessary and appropriate, but not to the exclusion of everything else. Great stuff!
I rarely disagree with Al and I only do so here in his intensity. Numbers can be very useful. In particular, they can help you learn what isn't working and if you stumbled on a false market or poor positioning. Marketing types must be comfortable with numbers and use them as a tool and not an end. ROI may not be the only way to judge marketing effectiveness, but it can be a great guide in some circumstances. Look at what you can do today with Google analytics and key words to measure your campaign effectiveness. Metrics can also tell you whether your product / service experience is actually living up to your brand promise which can help you stave off an authenticity issue early.
Where I agree with Al wholeheartedly is the impact of instinct and creativity. Great marketing doesn't materialize from surveys. The masses didn't know that Think Different! or Just Do It! or FedEx's business model would drive purchase decisions. These were all authentic brand positioning strategies that were new, creative, executed well and fulfilled by the companies. What everyone knew at the time is that they changed the way people thought about the category and company and they paid handsome dividends whether an ROI could be gauged or not. Ideas drive marketing. Metrics help you know when to adjust, change course or accelerate.
Bret, thanks for such a thoughtful comment. I usually agree with Al as well, and in a way, I appreciate his intensity in this article, because it reflects the other end of the pendulum-swing. However, having been a brand manager myself, I can't agree with his assertion that marketing is "not even 1% mathematics." He's more in line in the prior paragraph, when he says subsets of the discipline may in fact be numerically driven.
And you make a great point about the power of ideas. I would add to that the power of the overall brand experience, which is difficult to "test" or measure.
Readers, you can find more thinking by Bret and his colleagues at another great resource: www.AllAboutBranding.com.
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