by Kapil Jain, Academic Director, CCIMS
In response to a suggestion during the Marketing Advisory Council meeting in Fall 2010, CCIMS chose to focus its Spring 2011 roundtable on “Excellence in Marketing Operations: Tools, Technologies, and Measures that Matter.” Increasing complexities of the marketplace coupled with accelerating rates of change have underscored the importance of instituting efficient and measurable marketing processes. During the half-day event held on April 15, 2011 at the McCombs School of Business, Jeff Urbanek (AT&T), Prof. Raji Srinivasan (McCombs), and Brian Graham (Walmart) shared their experiences and thinking via presentations and were later joined by Christine Cutten (Deloitte Consulting) and Kapil Jain (CCIMS) in a panel discussion.
Jeff Urbanek, AVP Consumer Marketing at AT&T, emphasized the importance of managing the marketing investments via a lifecycle approach. The cycle ranges from optimization to planning to design to creation and execution to measurement. Leveraging process and technology to refine econometric media mix models allows AT&T to optimize the allocation of budgets against marketing priorities. Planning and design of the numerous campaigns, that may exceed ten thousand in number and cross multiple channels, requires blending the science of a bottom-up approach with the art of a top-down perspective. Finally, continuous measures at various levels ranging from campaign ROI to Program Budgetary Levels to Executive Dashboards, are an integral part of AT&T’s process.
Raji Srinivasan, marketing professor at McCombs, shared research findings suggesting the Return on Marketing Investments is affected by a concurrent and coordinated view of investments in various firm functions including marketing and operations. Her research probes the phenomenon of “interdependent spending,” the idea that spending in one function (say advertising) may be influenced (positively or negatively) by spending in another function (say R&D). Complementary spending patterns exist when increases in one department’s spending are accompanied by increases in another department’s spending as well. Substitutive spending occurs when one department increases spending while a second departments reduces it. Focusing on advertising-related results, her investigation using longitudinal data from single division firms in the high-tech sector showed that superior firm performance is associated with (i) complementary patterns of spending between Advertising and R&D (ii) when inventory is set as a complement to advertising, and (iii) when advertising is set as a substitute to inventory.
Brian Graham, senior director of Marketing at Walmart, highlighted the difference between a manufacturer’s perspective on marketing operations excellence and that of a retailer’s. From the retailer’s perspective, key distinctions include a different asset base, numerous retail locations and shelf-space rather than product portfolios, a shorter time horizon, and the distinction between marketing programs that build the firm’s brand and reputation versus business programs that consist of events and promotions.
The panel discussion addressed the challenge of using metrics appropriately. Christine Cutten, principal at Deloitte Consulting, suggested that beyond the need for a consistency in language and metrics across the various functions, it is important to recognize that “every metric is potentially a strategic driver.”