Marketing Effectiveness

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Marketing Effectiveness is the measure of how effective a marketing plan is at optimizing spending to achieve positive short and long-term results.It is related to marketing ROI.[1]

The concept of marketing effectiveness first came to prominence in the 1990s with the publication of Improving Marketing Effectiveness Shaw,R which won the 1998 Business Management Book of the Year Award. In the book "What Sticks", authors Rex Briggs and Greg Stuart calculated that marketers waste 37% of their marketing investment. Reasons for the waste include failure to understand underlying customer motivations for buying, ineffective messages and inefficient media mix investment (pg 19-20). What Sticks was named the #1 Book in Marketing by Ad Age and is required reading at leading Universities including Wharton School of the University of Pennsylvania and Harvard, suggesting that the Marketing Effectiveness continues to be an important business topic. A preferred marketing effectiveness analysis is marketing mix modeling.

Factors Driving Marketing Effectiveness[2]

  • Corporate: Each company operates within different bounds. These are determined by their size, their budget and their ability to make organizes act in similar ways leading to the need to segment them. Based on these segments, they make choices based on how they value the attributes of a product and the brand, in return for price paid for the product. Consumers build brand value through information. Information is received through many sources, such as advertising, word-of-mouth and in the (distribution) channel often characterized with the purchase funnel, a McKinsey & Company concept. Lastly, consumers consume and make purchase decisions in certain ways.
  • Exogenous Factors: External factors such as weather, interest rates, government regulations, etc. that lie outside of marketers' immediate control and may impact marketing effectiveness. Understanding the impact these factors have on consumers can help in designing programs that take advantage or mitigate the risk of these factors and the impact they may have on a marketing campaigns. Therefore, exogenous factors often influence how marketers strive to improve their results such as leveraging the factors noted above (i.e. seasonality, interest rates, regulatory environment) in an effort to improve marketing effectiveness.
  • Marketing Strategy: Improving marketing effectiveness can be achieved by employing a superior marketing strategy. By positioning the product or brand correctly, the product/brand will be more successful in the market than competitors’ products/brands. The match-up between the product, the consumer lifestyle, and the endorser is important for effectiveness of brand communication. Even with the best strategy, marketers must execute their programs properly to achieve extraordinary results.
  • Marketing Creative: Even without a change in strategy, better creatives can improve results. Without a change in strategy, AFLAC was able to achieve stunning results with its introduction of the Duck (AFLAC) campaign. With the introduction of this new creative concept, the company growth rate soared from 12% prior to the campaign to 28% following it. (See references below, Bang). Creatives are an integral part of any marketing campaign, as it establishes the corporate identity and plays a significant role in brand recollection. These may include designing point of purchase displays, brochures or even product packaging. Apart from communicating the brand, consistency in design across various mediums helps reinforce a specific offering in the minds of the audience. Using typography, imagery and color, marketing creatives evoke emotion related to a brand.
  • Marketing Execution: By improving how marketers go to market, they can achieve significantly greater results without changing their strategy or their creative execution. At the marketing mix level, marketers can improve their execution by making small changes in any or all of the 4-Ps (Product, Price, Place and Promotion) (Marketing) without making changes to the strategic position or the creative execution marketers can improve their effectiveness and deliver increased revenue. At the program level marketers can improve their effectiveness by managing and executing each of their marketing campaigns better. It's commonly known that consistency of a Marketing Creative strategy across various media (e.g. TV, Radio, Print and Online), not just within each individual media message, can amplify and enhance impact of the overall marketing campaign effort. Additional examples would be improving direct mail through a better call-to-action or editing web site content to improve its organic search results, marketers can improve their marketing effectiveness for each type of program. A growing area of interest within (Marketing Strategy) and Execution are the more recent interaction dynamics of traditional marketing (e.g. TV or Events) with online consumer activity (e.g. Social Media). (See references below, Brand Ecosystems) Not only direct product experience, but also any stimulus provided by traditional marketing, can become a catalyst for a consumer brand "groundswell" online as outlined in the book Groundswell.
  • Marketing Infrastructure (also known as Marketing Management): Improving the business of marketing can lead to significant gains for the company. Management of agencies, budgeting, motivation and coordination of marketing activities can lead to improved competitiveness and improved results. The overall accountability for brand leadership and business results is often reflected in an organization under a title within a (Brand management) department.

Metrics to Measure Marketing Effectiveness[3]

  • Marketing contribution to revenue: This is the big one — what percentage of overall company revenue can be traced back to your marketing team’s efforts? Obviously, the higher the number here, the more effective your initiatives. That said, there’s a lot that goes into telling this story and it doesn’t necessarily tell the whole story, as some areas of effectiveness, like brand awareness and website activity, may take longer to translate into revenue or may benefit the company in non-monetary ways.
  • Pipeline growth and acceleration: How do your marketing activities help grow and accelerate the pipeline? How does this growth and acceleration change from one month or quarter to the next? Your team’s ability to regularly fill the pipeline with new leads and to keep those leads moving down the funnel is a critical component of overall effectiveness. Additionally, it’s important to pay attention to both growth and acceleration, as having one without the other can be a warning sign that something isn’t working as planned and/or that you need to re-focus your efforts to keep the pipeline both full and flowing.
  • Conversion rates: Conversion rates can tell a number of different stories depending on where you’re looking. For example, you might measure conversion rates based on channel to determine the effectiveness of efforts on any one channel or you might measure conversion rates based on stage in the buyer’s journey to determine the effectiveness of particular campaigns to move leads down the funnel. In cases where the end goal is to spur further action (which should be the case for most marketing activities), both of these are critical in determining how well you’ve done.
  • Cost per lead, cost per opportunity: Your marketing team might surface a lot of quality leads and do a good job of converting those leads, but if the cost of doing so is extremely high, how effective are those efforts really? Yes, you’re achieving the desired results, but are you doing so in the most effective way possible? Are those leads worth the price tag? (Note that the answer could very well be yes here, but it is a question you need to ask.) On the flip side, you might find that investing more upfront yields higher quality (re: more valuable) lead and opportunities and, therefore, a better ROI. Your goal should be to find the sweet spot that balances cost with quality and results.
  • Brand awareness: Understanding brand awareness is especially important in industries with longer sales cycles and even just in general, as buyers today tend to do far more research on their own before ever reaching out to a company for more information. It’s important to note that often times the results of brand awareness are more long term, so don’t expect an immediate return here. One way to frame the effectiveness of your brand awareness is to consider it in conjunction with your pipeline. For example, if you find that you have strong brand awareness but your pipeline is lacking, you should ask what you else you can do to use that awareness to fuel more conversions.

See Also


  1. Defining Marketing Effectiveness Alexa
  2. Factors Driving Marketing Effectiveness Wikipedia
  3. 5 Metrics to Measure Marketing Effectiveness Sales Fusion