Measuring and Allocating Marcom Budgets: Seven Expert Points of View

This report, prepared with the support of MSI and the Yaffe Center, is being sent to you for your information and review. It is not to be reproduced or published, in any form or by any means, electronic or mechanical, without written permission from the Institute and the author. Introduction This joint report of the Marketing Science Institute and the University of Michigan's Yaffe Center for Persuasive Communication contains the points of view of seven experts in the area of marketing communication, responding to the question , How should companies think through the challenge of how to use marketing communication resources most effectively? The seven experts are Paul Farris of the thank them all for their insightful contributions. The idea for this project came from a challenge posed to Rajeev Batra, director of the Yaffe Center, by Jan Valentic, vice president of global marketing at Ford, who sits on the Yaffe Center's industry advisory board, and many of the other Yaffe board members. Ford, like most other companies, is faced with the challenge of deciding how to best allocate its marketing communication dollars across not merely the traditional media of print, television, radio, and outdoor, but also across such media as event marketing, public relations, database and direct marketing , and the Web. If it is hard to measure marcom effectiveness within one medium , it is even harder to do so in many different media, especially in a way that allows comparisons of relative efficiencies and returns, postulating some kind of optimal allocation. How then might companies think through this task? That is, what metrics, tools, and criteria might be the most appropriate in making these allocations? Since this question involved both marketing metrics and marketing communications efficiency, which are priority topics for MSI, Rajeev approached Dave Reibstein, then MSI's executive director, with the suggestion that MSI and the Yaffe Center launch a joint research initiative in this area. MSI's traditional approach to promoting research in any priority area is to solicit and fund single studies in that topic area. While this is obviously useful, we thought it might be interesting at this early, exploratory phase to try something very different: to approach experts and ask them for their " orienting perspectives " on this broad, somewhat unstructured, question, and to then use their responses to target future research funding more tightly. We invited academic experts with well-established credentials …