Linking Marketing Metrics to Financial Performance - Emory ...

In terms of actual implementationsfor communicating the impact ofmarketing activities across themarketing function, as well as therest of the organization, manycompanies are engaged indeveloping visual representations,called “marketing dashboards”(Figure 7 is one example of amarketing dashboard motivated fromthe DuPont model). Using such a toolmakes it easy to see theinterconnections between marketingexpenditures and marketing metrics,the nature of the short-term effectson intervening constructs, such asawareness, preference, distribution,loyalty, brand value, as well as adirect impact on short-term sales.This way, one can understand the“flow” of marketing throughout thesystem, and its impact.Figure 7: The Marketing DashboardFarris and Reibstein, 2004From an industry-wideimplementation perspective, themetaphor of a dashboard is fitting:We drive a car with four or five realtimemetrics that capture theelements necessary to navigate amuch more complex system ofinterrelated functions. There aremany complexities operating underthe hood, and while all of them areimportant, to operate the car all weneed is to have our eye on a few ofthem. Companies that are investingin dashboard development are doingso in order to have (1) a clear andfinite set of objectives that arecommunicated throughout the firm,(2) an explicit articulation of howconstructs are interrelated, and (3)one place where all the measurescome together.In closing, we believe that shorttermmetrics such as ROMI are likelyto discriminate against long-termmarketing investments. Marketersmust therefore communicate thelonger-term benefits of growth andreduced vulnerability and volatility ofcash flows as an outcome ofmarketing actions within theaccounting-finance language using