Peter Drucker, the eminent philosopher/consultant who wrote the book on marketing, said that getting new customers and innovation were the only two parts of a business that could be realistically called profit centers, as everything else is purely a cost center. Getting new customers he defined as the job of marketing, and he called out the tight relationship between getting new customers and innovation, making the Chief Marketing Officer also the person responsible for envisioning the innovations which could bring new customers.
Yet some years ago it became obvious to my great friend Meg Blair, who left us in 2018, that CMOs were not taken seriously enough by the CEO and the rest of the C suite. In 2007 Meg told me that she was creating a thing called the Marketing Accountability Standards Board (MASB) in order to change that situation forever, and to establish the pre-eminent importance of the CMO as the person responsible for the demand chain, driving growth for companies. Later that year Meg did create the MASB, and I attended from the first meeting. I brought Karen Ebben, my client at General Motors for many years, to the second meeting, knowing that Karen would be an immensely valuable contributor/leader, as she has been to the MASB ever since.
Meg, as founder/CEO of the ARS Group (known for their innovation in measurement of effectiveness for pretesting of ads, which is now part of MSW Research), was the first copy tester to use third-party validation of the sales effects predicted by her ARS scores. Her third-party validator was IRI. Prior to those landmark studies, ROI and pretesting existed in different universes. So naturally she was the person who founded an entity aimed at unification of the industry's demand side metrics, just as Einstein sought, and now many others still seek to unify all of physics.
MASB has done great work to establish rigor and interoperability to the measure of brand equity, although that work is not yet completed. As Joanna Seddon comes aboard, she is setting out to do a lot more than that. Joanna is Managing Partner of Presciant, a data-driven brand consultancy, dedicated to helping companies unleash the power of their brands to drive revenue, margin and financial value growth. Prior to starting Presciant, she was a founding partner of FutureBrand and went on to create Kantar's and then Ogilvy's brand consulting practice, which she built up very successfully over 10 years.
Linking brands to financial outcomes is the foundation for all her brand work. She originated the BrandZ ranking of the world's most valuable brands and has conducted hundreds of brand valuations across just about every industry. She also reinvented and chairs the Marketing Hall of Fame.
When one meets Joanna, there is a strong impression of her boundless experience, insight and determination. She is a self-actualized person, doing her passion work. These are good signs for the future of MASB and of our industry.
I interviewed Joanna for this column and here is a precis:
Bill: How do you define the problems or the challenges CMOs are facing today?
Joanna: In the beginning, CMOs used to be the trusted strategic advisors to CEOs. But CMOs dumbed down their roles to focus on creative strategy, making good commercials. Instead of holistically considering brand purpose, innovation, target segmentation, creative and media, context effects, price/promotion, and all the rest, they wound up limited to creative, painting themselves into a shallow corner. MASB's Mission is to walk back that diminution.
Bill: Other than benefitting the CMO what is the benefit to the enterprise?
Joanna: Growth is the universal target. As you've often pointed out in your work, most of the major brands are shrinking, not growing, as a result of private labels, DTCs and new microbrands entering the market and taking advantage of the widespread distrust of large institutions. Creating growth for the brands of major corporations will require holistic and unified vision, brand purpose, innovation and integrated marketing. And it will require that CEOs give the approvals needed for the bold new plans of CMOs. To get that, and regain the trust of CEOs, CFOs and Boards, it is essential to link brand and marketing to financial outcomes and establish clear principles and standards to guarantee the quality of marketing measurement. MASB's mission and my personal mission is to elevate marketing leaders and equip them to fulfill their rightful role as the path to the CEO position. Marketing and innovation are the engine of growth. The marketing function is where future CEOs should come from.
Bill: Is there any reason to believe that now is the right time for this agenda to succeed?
Joanna: The supply chain is topped out in terms of efficiency. The only place to go to get growth in profits is the demand side. Also, with all the turbulence and the acceptance of change by business leaders, and all the adoption of new digital and AI technologies, the stage is set to enable other shifts that would have seemed impossible just a few years ago.
Bill: I feel that some of the problem in the last few decades has been the lack of trust in the marketing ROI measurement tools. Would you comment on that?
Joanna: People who use black boxes usually have something to hide. There must be a bright line separating appropriate trade secrets and transparently knowing exactly how something is calculated on which one is expected to make multimillion-dollar investment decisions. I believe in robust measurement and transparency.
Bill: What specific types of metrics need, in your estimation, to be perfected by means of standards-setting?
Joanna: Traditional brand equity metrics, which are in a state of disarray, a customer funnel and CLV model reimaged for the digital age and linked to sales and profits, a rethinking of the whole idea of attribution, and a holistic approach to measuring long term and short term marketing ROI, which clearly delineates the role and impact of brand investment vs. lead generation and promotional activities. All these and their interactions must be solved for and adapted to each product category and to the situation of each brand. Your own work at RMT has shown that media effects and creative effects interact together, and one cannot be optimized without the other. Ultimately, we must see the whole equation in which all these vectors fit.
Bill: Hear, hear! Along the way I think one of the tools that can help establish trust for ROI and brand measures is to tie them back to the brand's actual bank account. Too often I've heard CMOs and others complain that all (or too many of) the brand lift studies, MTA, single-source and MMM studies show such high lifts that they do not jibe with the actual bank deposits. At TRA I called this constant comparing of our results with their own "bank account validation," and it worked to bring us 77 major brands who knew for sure that they could bank on our ROI estimates and media recommendations.
Joanna: That is a good principle to keep in mind. Thanks!
Bill: One other tool that has been underused is in-market experimentation, random control trials (RCTs) -- also known as A/B tests and as holdout studies. Digital has made better use of these than TV because of addressability, but now TV streaming "levels that playing field" and should open the door to more in-market experimentation. In the ARF Research Review of TRA the ARF was pleased that TRA recommended our findings should be used to know what is worth testing by RCTs, not as the final numbers to make decisions upon.
Joanna: That's another good idea. I look forward to working with you in the MASB process to open minds and equip all companies to grow and improve performance in the future far better than in recent years.
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