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Measurement of return on marketing investment: A conceptual framework and the future of marketing metrics
Abstract
There is growing recognition that firms in the contemporary business environment derive substantial and sustained competitive advantage from a bundle of intangible assets such as knowledge, networks and innovative capability. Measuring the return on such intangible assets has now become imperative for managers. The present manuscript focuses on the measurement of the return on marketing. We first discuss the conditions that make this task a high managerial priority. We then discuss measurement efforts to date, both in general management and marketing. We then offer a conceptual framework that places measurement efforts in a historical perspective. We conclude with a discussion on where the future of marketing metrics lies.

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  • References (48)
  • Cited By (83)
  • References (48)
  • Cited By (83)
2005 in Harvard Business Review [IF: 4.37]
Randy L. Stone1
Estimated H-index: 1
,
Kevin J. Clancy1
Estimated H-index: 1
23 Citations Source
Christopher D. Ittner31
Estimated H-index: 31
(University of Pennsylvania),
David F. Larcker58
Estimated H-index: 58
(Stanford University)
The objective of this paper is to foster research on recent innovations in performance measurement by providing a rich description of emerging measurement practices and suggesting directions for future research. Using survey data collected by consulting firms and government organizations, we examine three measurement trends: (1) economic value measures, (2) non-financial performance measures and the balanced scorecard, and (3) performance measurement initiatives in government agencies. Existing ...
879 Citations Source
2004 in Harvard Business Review [IF: 4.37]
Darrell Rigby14
Estimated H-index: 14
,
Dianne Ledingham2
Estimated H-index: 2
215 Citations Source
Peter C. Brewer1
Estimated H-index: 1
,
Gyan Chandra1
Estimated H-index: 1
,
Clayton A. Hock1
Estimated H-index: 1
51 Citations Source
2004 in European Management Journal [IF: 2.37]
Patrick Barwise21
Estimated H-index: 21
,
John U. Farley39
Estimated H-index: 39
(Dartmouth College)
A study of marketing expenditure in five industrial countries found that most firms regularly report one or more of six marketing metrics to the Board. Market share (79 per cent) and perceived product/service quality (77 per cent) are most used, while estimated customer or segment lifetime value is reported used by only 40 per cent of firms. There are significant country differences, with German firms claiming to be the heaviest users and Japanese firms the lightest. There is a consistent patter...
80 Citations Source Cite
Michael D Houle1
Estimated H-index: 1
Economic Value Added (EVA), when applied properly in a company, impacts all departments and decisions. The equation for EVA as well as the adjustments that must be made to current accounting practices is the basis for an understanding of EVA. The success of EVA is displayed as companies that have implemented EVA to varying degrees are compared with companies that have not implemented EVA. Once the argument for the overall superiority of EVA is made, traditional performance measures and current a...
73 Citations Source
2004 in Harvard Business Review [IF: 4.37]
Roland T. Rust53
Estimated H-index: 53
,
Valarie A. Zeithaml40
Estimated H-index: 40
,
Katherine N. Lemon27
Estimated H-index: 27
Most executives today agree that their efforts should be focused on growing the lifetime value of their customers. Yet few companies have come to terms with the implications of that idea for their marketing management. Oldsmobile, for example, enjoyed outstanding brand equity with many customers through the 1980s. But as the century wore further on, the people who loved the Olds got downright old. So why did General Motors spend so many years and so much money trying to reposition and refurbish ...
127 Citations Source
2002 in European Management Journal [IF: 2.37]
Tomás Bayón7
Estimated H-index: 7
(International University, Cambodia),
Jens Gutsche4
Estimated H-index: 4
,
Hans H. Bauer21
Estimated H-index: 21
Research has shown that the market value of stock listed companies is to a large extent attributable to investors' value estimations of intangible assets. Among these, Customer Equity, the monetary value potential of a company's current and future customers, is of central importance. It is the key driver of shareholder value from operational business activity. For companies competing for investment resources, this means to consequently achieve and increase this value potential by following an ap...
99 Citations Source Cite
1996 in Harvard Business Review [IF: 4.37]
Robert C. Blattberg3
Estimated H-index: 3
,
John Deighton23
Estimated H-index: 23
656 Citations Source
Roland T. Rust53
Estimated H-index: 53
,
Valarie A. Zeithaml40
Estimated H-index: 40
,
Katherine N. Lemon27
Estimated H-index: 27
Contents Preface Acknowledgments Part I Beyond Brand Equity 1. The Case for Customer Equity 2. The Profitable Product Death Spiral 3. The True Lifetime Value of the Customer Part II The Customer Equity Framework 4. A Framework for Customer Equity 5. Driving Value Equity 6. Driving Brand Equity 7. Driving Retention Equity Part III Customer-Centered Strategy 8. Measuring Customer Equity 9. Evaluating Financial Impact 10. Strategic Analysis Part IV Managing Customer Equity 11. The Customer Pyramid ...
615 Citations Source
  • References (48)
  • Cited By (83)
Lutz Hildebrandt15
Estimated H-index: 15
(Humboldt University of Berlin),
Henning Kreis5
Estimated H-index: 5
Die Forschung zur Messung der Wirkung von Marketingstrategien auf den Unternehmenserfolg hat sich in den letzten Jahren durch die Verfugbarkeit von differenzierteren Datenquellen (z.B. Businessdaten von J.D. Powers), der verstarkte Nutzung von quantitativen Indikatoren im Marketing - sog. Metrics (Farris et al., 2006 [13]) - und durch die Verfolgung von wertorientierten Modellierungen (Doyle, 2008 [10]) entscheidend verandert. Insbesondere die Berucksichtigung von Paradigmen wie dem Ressourcen B...
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Carlos María Souto , Carlos Casanueva Nárdiz (Technical University of Madrid)
Los programas de fidelizacion han ocupado un lugar destacado entre las estrategias de marketing de las organizaciones que gestionan clientes. Sin embargo, existe poca evidencia de la eficiencia de este tipo de programas. Este trabajo compara los resultados de dos carteras de clientes administrados con programas de fidelizacion con otras dos que se gestionan sin ellos, en terminos de utilizacion, contribucion y distribucion de la rentabilidad. 1. Introduccion A pesar de que el concepto de marketi...
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Anastasia Mariussen2
Estimated H-index: 2
(Oxford Brookes University)
A number of measurement frameworks have been developed to help organisations assess the effectiveness of their marketing activities. Yet, the approaches provided by these frameworks seem to be largely linear and outdated. Whilst effectively explaining cause-and-effect relationships between marketing efforts and performance in the offline domain, the existent marketing performance measurements frequently fail to capture a full spectrum of marketing influences online and, therefore, fail to portra...
2 Citations Download PDF
David Bowie4
Estimated H-index: 4
(Oxford Brookes University),
Alexandros Paraskevas13
Estimated H-index: 13
(University of West London),
Anastasia Mariussen1
Estimated H-index: 1
(Oslo School of Management)
Although the measurement of offline and online marketing is extensively researched, the literature on online performance measurement still has a number of limitations such as slow theory advancement and predominance of technology-and practitioner-driven measurement approaches. By focusing on the widely employed but under-researched affiliate marketing channel, this study addresses these limitations and evaluates the effectiveness of practitioner-led online performance assessment. The paper offer...
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Joel Järvinen1
Estimated H-index: 1
,
Aarne Töllmen1
Estimated H-index: 1
,
Heiki Karjaluoto1
Estimated H-index: 1
This study investigates how the online environment allows industrial companies to overcome traditional marketing communication measurement challenges. Specifically, it examines the perceived benefits of web analytics (WA) and social media monitoring (SMM) with regard to solving the measurement difficulties in three global industrial companies. In order to illustrate the challenging operational environment encountered by industrial businesses, we compare the results with experiences from within t...
2 Citations Source Cite
This thesis has been created as a response to the growing interest among small and medium-sized business-to-business software developers to internationalise in order to grow their businesses. The initial study of the problem lead to the insight that a strategic mix of communication channels is a key success factor for an internationalisation. The purpose of this thesis was therefore determined to be to explore what and how different factors influence the effectiveness and efficiency of a busines...
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University of Tampere School of Management, marketing Author: SAARINEN, KIMMO Title: Utilization of customer online data in customer acquisition Case Surf Master’s thesis: 77 pages, 8 appendix pages Date: May 2015
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Saurabh Mishra1
Estimated H-index: 1
(Indian Institute of Information Technology, Allahabad),
Madhvendra Mishra1
Estimated H-index: 1
This paper is designed to understand current status of marketing measurement and accountability against marketing investment in today's competitive scenario and what are the standard methods are available to measure marketing performance measurement in financial aspects, as well as paper suggests a process for developing links between promotional marketing and its financial outcome. Key words : ROI, Marketing Promotion, Metrics, Branding, BTL.
1 Citations Source
Levent Kosan2
Estimated H-index: 2
(Mersin University)
Accounting, especially strategic management accounting, provides significant contributions to companies for decisions in environments of intense competition. Accounting, which has positive effects of company strategy development and management, has become a required facet of marketing, another area that has gained significance. The aim of this study is to assess the contributions of accounting to marketing performance management and other areas related to marketing development and to evaluate th...
1 Citations Source
Don O'Sullivan9
Estimated H-index: 9
(University of Melbourne),
Andrew V. Abela8
Estimated H-index: 8
(The Catholic University of America),
Mark C. Hutchinson6
Estimated H-index: 6
(University College Cork)
Purpose – The research aims to test whether the ability to measure marketing performance affects the actual performance of firms, in the context of the European high‐tech sector. It also aims to test whether performance‐reporting frequency and size of marketing budget mediate the relationship between measurement ability and performance.Design/methodology/approach – Survey responses collected from 157 marketers were supplemented with firm performance data.Findings – Results show that marketing pe...
52 Citations Source Cite

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