Marketing Effectiveness: It's More Than Just ROI

Millward Brown's POV, February 2008

Linking marketing to financial performance is not now - nor has it ever really been - solely about return on investment (ROI). Quantifying the return achieved by marketing activities is a necessary step in the process of connecting marketing to finance, but is not, in itself, sufficient for understanding how marketing helps to achieve business objectives or how its contribution can be improved.

The task of tying marketing investment to business performance is serious business, but too often it is reduced to buzzwords. Terms like ROI, customer value, and optimization all have meaning and relevance, but are often used imprecisely to promote very specific solutions to broad business issues. Decades ago, when few were paying attention to the need to connect marketing to finance, it may have been excusable to use such semantic hooks to grab attention. But now that there is an accepted mandate to understand and measure the financial impact of marketing, it’s time to take a more disciplined approach.

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