Balance attention to metrics with intuition

June 1, 2007

BY MICHAEL KRAUSS

Rob Duboff went to Harvard Law School and became a great marketer. Now he’s using his legal training and his marketing acumen to argue that the craze toward precision marketing might be sending us in the wrong direction.

“Anybody who grows up as an argumentative, logical thinker ought to go to law school,” says Duboff, the author of ROI for Marketing: Balancing Accountability with Long-Term Needs recently published by the Association of National Advertisers. “I always felt law school was better preparation for a career in business than attending business school.”

Duboff has taken on a challenging task in his new book. Today, more than ever before, CMOs face intense pressure to manage costs and justify the return on marketing investments. Duboff thinks we need a careful approach that balances the new reliance on metrics with the traditional reliance on intuition when it comes to fine-tuning our marketing investments.

Duboff’s just the right person for the task. He spent his career as a market researcher, management consultant and marketing educator. While still in school at Harvard, he launched a political polling firm that backed Eugene McCarthy’s 1972 presidential campaign. As a young analyst wearing blue jeans, he convinced the white-shoe founders of management consultancy Temple, Barker & Sloan Inc. to make him general manager of Lexington, Mass.-based Decision Research Corp. His early research for Arthur Andersen guided the formation of what would later become Hamilton, Bermuda-based Accenture Ltd.

He became the global chief marketing officer of Mercer Consulting and later Ernst & Young. He has taught on the faculty of Boston College in Chestnut Hill, Mass., MIT’s Sloan School of Management in Cambridge and, currently, Northeastern University in Boston. Duboff served two terms as chairman of the board of the Advertising Research Foundation. Today, he’s founder and CEO of HawkPartners LLC, a Cambridge, Mass.-based marketing consultancy.

Duboff’s been a successful entrepreneur and corporate executive, but his passion has always been in solving thorny problems. That’s why he’s turned his focus to the debate over the proper way to approach ROI techniques in marketing. “The issues and the work is what motivates me,” Duboff says.

Duboff’s book is not a wholesale defense of the softer side of marketing. He’s not an advertising junkie who urges clients to trust in the power of creativity and believe in unending investments in brand equity. Duboff is a data geek who likes to roll up his sleeves and crunch the numbers. He knows all about the impact of technology and the precision measurements today’s online tools provide.

Duboff worries that our fascination with online measurement approaches and the promise of technology that provides metrics may send us down the wrong path. He thinks marketers can be “precisely wrong” and should strive to be “generally correct.”
What he means is this: If we rely too much on the elements of the marketing mix, we can overtly measure and shy away from using the tools of marketing that require intuition—such as advertising, public relations and sponsorships—and thus we’ll make bad marketing investment decisions.

“The quickest way to make a sale is to lower your prices,” says Duboff, who remembers the days when marketers pushed heavily into coupons and purchase incentives because they were measurable at the expense of advertising budgets. “If you do too many price promotions on Michelob, pretty soon you don’t have a premium brand,” he says.

Duboff points to BMW’s investment in online videos featuring Madonna as yet another example. “Those videos created considerable awareness,” Duboff says. “Can you imagine anyone quantifying that investment in advance?”

“We have to carefully apply the discipline and techniques of ROI,” says Duboff, who cautions that human behavior is highly variable. He fears we will build marketing investment models based solely on historic results; those models may not predict the future.

“I do not believe the prospective tools exist,” Duboff says. “That’s why I argue with precision marketing advocates.”
Duboff believes there is a middle ground: “I think there is a pendulum. Marketers should be in the middle.”

Duboff believes marketers should operate between two ideas. At one pole is the concept of complete reliance on the power of technology-based measurement techniques to guide future investments. “We can measure everything precisely today, and therefore do it prospectively (fine-tune future marketing investments with certainty),” is what one school argues, according to Duboff.

“On the other side of the pendulum are the apologists for advertising, sponsorships, public relations and other tactics where the benefits are hard to measure,” he says. “(It’s) anything you do in marketing that has ‘Trust me, this is good for the brand,’ in the equation,” he adds.

“I want us to be in the middle between those two schools of thought,” Duboff says. “I want us to be generally right and not oversell the precision of the tools we have. I also don’t want us to blindly say, ‘Believe me.’ ”

Duboff argues that CEOs should pay attention to the marketing ROI debate. “CEOs should be demanding,” he says. “They should require better information on what’s working in their advertising. That should happen. They should be thinking about ROI. Let’s just measure it the right way.”

Duboff’s book is worth a read, and his arguments are a reminder that great marketing blends science with art and intuition with analysis.

Michael Krauss is president of Market Strategy Group, based in Chicago, and can be reached at Michael.Krauss@Mkt-strat.com or news@ama.org.

 

 

 ©2007 Marion Consulting Partners