Two of my MBA professors, Paul Farris and Ron Wilcox, along with a newer Darden professor Raj Venkatesan, have a new book which examines marketing analytics through cases. (Raj also runs the marketing analytics initiative at Darden). The cases describe scenarios relevant to numbers based marketing. For example, they allow readers to see the benefits of customer analytics in the retail banking world. Beyond the cases the authors share some advice on conjoint analysis and logistic regression while also sharing helpful notes on marketing experimentation and the challenges of ascribing causation in marketing activities.
The book finishes with thoughts on how to implement marketing analytics. This is important, my experience suggest that many marketers want to be more analytical they just don’t know where to start.
“Marketing analytics powered by “big data” holds the promise to shift marketing strategy from an intuitive discipline to a fact-based, decision-making process.” (Venkatesan, Farris and Wilcox, 2104, page 282). Managers can certainly benefit from improving the way they measure the effectiveness of their marketing. The professors outline some ways to get to improved analytics and show, in the cases, how firms have, or could, use marketing analytics to drive success.
One helpful suggestion in the book is: “It is important that organizations decide the metrics for evaluating the effectiveness of marketing spending up front and share those metrics widely” (Venkatesan, Farris, and Wilcox, 2014, page 284). This matters because with so many metrics to choose from if you don’t specific which you care about in advance you are bound to find ones that look good. So what should we choose? On specific metrics they suggest that, “Return on Investment (ROI) is, however, the most common metric in assesing the value of marketing tools because it is the easiest to use in analytical marketing mix models” (Venkatesan, Farris, and Wilcox, 2014, page 284).
It seems to me that marketers are a long way off where we might be using marketing analytics. Hopefully with this, and similar books, we’ll get there.
Read: Raj Venkatesan, Paul Farris, and Ron Wilcox (2014) Cutting-Edge Marketing Analytics, Pearson