Linking Marketing Metrics to Financial Performance - Emory ...

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Figure 4: Elements of Firm ValueValueTraditional Focus of ValueTangible AssetsIntangible AssetsCash Inventory Other Other, e.g.,R&D talent poolMarketing Driven AssetsBrand EquityCustomer EquityChannelRelationshipsIntellectualProperty (IP)*Individual Marketing CampaignsThe Marketing Relevant Focus of Value* Not influenced only by MarketingZyman Institute of Brand Science 14
This next level of linkages isexplored in Figure 5. For eachrelevant intangible asset, we focuson three different measures – itscurrent value, its expected futurevalue, and the variability (a measureof risk) with its expected futurevalue. Understanding each of thesethree measures is vitally importantin making the case for long termhealth of the company. Within thisframework, one can safely say thatmost of how marketing is evaluatedis by measuring its impact only onthe short term, whereas most ofwhere marketing really makes adifference is in terms of its impact onthe value in the long term, andreduction of variability of theexpected value in the long term.Note, for example, that mostmarketing mix models measuremarketing expenditures’ impact onsales, but not on baseline orvariance of sales. Past marketingexpenditures (e.g., advertising andchannel development) should resultin “marketing stock” (e.g., brandequity) that can help raise baselinesales, enhance the productivity ofcurrent expenditures (higher equityand better established brandsrequire lower levels of marketingsupport; Boulding, Lee and Staelin1994). Further, marketing supportfor products often results in higherlevels of product availability anddistribution support, indirectlyincreasing sales and profitability(Sinha et al 2006). Finally,marketing support for new productswill result in multi-period effects—stronger brands enjoy lower rates ofvalue deprecation and sales decay.Figure 5: Linking Marketing Metrics to Financial ConsequencesMarketing Driven Intangible AssetsBrand EquityCurrent ValueFuture Expected ValueVariability (risk)Customer EquityCurrent ValueFuture Expected ValueVariability (risk)ChannelRelationshipsCurrent ValueFuture Expected ValueVariability (risk)IntellectualProperty (IP)*Current ValueFuture Expected ValueVariability (risk)Campaign Relevant Marketing Metrics: e.g., for a Promotional CampaignFirst PurchasesRepeat Purchases…Individual Marketing CampaignsAdvertising Promotions ………Past SpendingCurrent SpendingPast SpendingCurrent SpendingFinancial MeasuresROIROABeta…Zyman Institute of Brand Science 15
Page 1 and 2: Zyman Institute ofBrand ScienceZIBS
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Page 5 and 6: contrary, over the past few decades
Page 7 and 8: way in being accepted as a standard
Page 9 and 10: cash flow from an opportunityadjust
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Page 13: 3.1 Our conceptual frameworkTo outl
Page 17 and 18: imagined, and moreover, notimperati
Page 19 and 20: proposed above? We illustrate below
Page 21 and 22: One interesting example in thiscont
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Page 25 and 26: assets. They represent investmentsw
Page 27 and 28: discounted cash flow analyses. To b
Page 29 and 30: REFERENCESAaker, David (1991), Mana
Page 31 and 32: Farris, Paul, and David Reibstein (
Page 33 and 34: Mizik, Natalie, and Robert Jacobson
Page 35 and 36: Veliyath, Rajaram, and Stephen Ferr
Page 37: Contacts:For further information, p

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