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Measuring and Improving Return on Marketing Investment with actionable dashboards: which marketing actions yield most returns in fast moving economies?

Final Report Summary - ROMIDASHBOARD (Measuring and Improving Return on Marketing Investment with actionable dashboards: which marketing actions yield most returns in fast moving economies?)

The struggle of companies around the world to measure return on marketing investment (ROMI) continues unabated, as this challenge was ranked the #1 senior management priority. In emerging markets, the lack of measurable results is even larger, and managers are unsure whether insights from mature markets translate into emerging markets (Burgess and Steenkamp 2006). Therefore, this research set out to achieve the following objectives:
1) to empirically model how marketing actions drive firm top-line and bottom-line financial performance;
2) to develop new dashboard tools based on this model to aid policy makers in organizations improve their return on marketing investment;
3) to compare and contrast the calculated return on marketing investment in fast-moving economies versus mature markets.
Through to this project, the researcher has been able to address all three objectives. First, based on data on European, Asian, North American and South American market, the researcher has empirically modelled return on marketing investment for the companies’ marketing actions. Second, the findings of these models have been translated into new dashboard tools, which communicate insights, allow managers to perform what-if analyses and inspire actions that generate top line and bottom line. Third, the researcher has empirically contrasted return on marketing investment in emerging versus mature markets and disseminated these insights in both an academic publication and a practitioner-oriented book.
Key insights from these activities include that (1) return on marketing investment systematically differs in emerging versus mature markets, (2) these differences can be largely explained by differences in customer attitude dynamics in these markets, and (3) tracking these customer attitude dynamics in a marketing dashboard enables decisions makers to improve return on marketing investment. First, the researcher finds that the returns on advertising and price are typically higher in emerging markets, while the returns on distribution increases are typically lower. Second, the researcher developed a new conceptual framework based on differences in consumer attitude dynamics, how they are affected by marketing and how in turn they affect sales. The results show that the emotional brand connection judged so important in mature markets (‘lovemarks’) is substantially less important than securing the brand’s spot in the consumers’ consideration set. Third, the researcher has created dashboard tools based on estimated return on marketing investment, which have been used by companies to conduct field experiments, substantially change their marketing resource allocation and obtain better profitability.
The socio-economic impact of this project is substantial in 3 ways. First, 2 companies in emerging markets successfully changed their budget allocation. Second, an SME in a mature EU market changed both the size and allocation of its marketing budget, and saw profits increase fourteenfold. This company also hired an employee responsible for dashboard and analytics. The project furthered the employment of the researcher and student assistants at 3 universities in emerging and mature European markets. Finally, the resulting publications advanced the careers of 7 researchers in the European Union, 2 researchers at the host university and 2 researchers at other Turkish universities.
Beyond disseminating insights to marketing academics, managers and policy makers, the Researcher also finalized his practitioner-oriented book (published by AMACOM in 2013) and website: www.marketdashboards.com. His contact information is Koen Pauwels, Professor of Marketing, ÖZYEĞİN ÜNİVERSİTESİ, Nişantepe Mah. Orman Sok.13 , 34794 Alemdağ – Çekmeköy / İSTANBUL, Sultanbeyli V.D. 7170240129, Phone: 0216 5649532, Email: koen.pauwels@ozyegin.edu.tr