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Six Steps to Stop Marketing Waste

By Guy Powell, Author, “Marketing Calculator: Measuring and Managing Return on Marketing Investment”

Is half your marketing wasted and you just don’t know which half? Are you a follower of John Wanamaker and don’t know whether your marketing is working or not? In any organization, marketing is one of the most difficult functions. There’s always too much to do and too little time.  And if you’re like most organizations after the campaign is done, you can’t answer the simple question, “How much revenue did it bring in?”

Here are six steps to help fix this problem: 


     Step 1) Get your costs accounted for. Determine how much you’re spending on each marketing activity. Put in place a cost tracking system that can relate all direct and indirect costs to specific campaigns. For BtoB marketers, this includes the costs that the sales team, support and the channel spends to promote your product/brand in the marketplace. For consumer marketers, capture the specifics of your marketing campaign plans into a single spreadsheet showing where each dollar is being spent for each week of the next quarter or year. Track creative development, production and insertion costs.  Compare actual execution to planned purchases.

     Step 2) Track your activities. Just as you need to track costs, you also need to keep track of what activities took place and when they took place. How were GRPs, impressions and clicks purchased and delivered? What media channel was used? What activities were done at resale or with your sales team? With a good tracking system in place, you can now start to look at ways to analyze this data to support your strategic and tactical marketing decisions.

     Step 3) Understand your consumer. If you understand how your consumers process media, make purchase decisions and consume your product, you will be able to make certain you are measuring the right things not just the easy things. For BtoB marketers it’s very easy to measure the sales cycle, but it’s much more important to measure the purchase cycle. Consumer marketers must understand how brand awareness and consideration translate at some point in the future into purchase and consumption?

     Step 4) Track results. Marketing results take place at two levels. Interim results, such as Web visits, engagement, leads developed, brand awareness and consideration as well as units and dollar value (or other currencies) sold at point of sale. Interim results should mirror how consumers act in the marketplace and should not be a reflection of your internal organization. If you track results with the consumer at the central focus of your metrics, you will be much more successful than if your metrics only reflect your own organization.

     For point of sale data in many industries, this means purchasing syndicated data, such as Nielsen, IRI or others. Put these data into a time series, so that you can see how your activities drive incremental  changes in the ‘results’ at some point in the future. Don’t forget to include your competitors’ actions, their pricing, channel, advertising and product activities (the 4Ps).

     Step 5) Choose your analytical method. Your environment and the availability of data determine the kinds of analytical tools to use to start connecting the dots between marketing inputs and outputs. Statistical modeling is certainly one approach to develop a robust marketing mix model. Others can include split cell testing or agent-based modeling. Even tracking the direct response from your marketing activities can lead to some great insights.

     Step 6) Question your results but then act on them. Make certain they truly represent how your consumers responded to your marketing controlling for consumer trends, exogenous factors, competitive actions and channel changes.  If you’ve done your homework right, your results will be robust and you will be able to make significantly better decisions. If you’re still not comfortable, start with an in-market test or other research to revalidate your conclusions.

     Bonus Step 7) Look for areas of improvement. Once you start to make better decisions you will realize the value of improved data sources. It will make sense to invest further into more detailed information in order to make better and better decisions. Your risk will be lowered and your forecasts will be more accurate. The rest of the company will finally understand the value of marketing.

How do you know you’re on the right path? 
There are a couple of sure signs that you have begun to institute a culture of marketing effectiveness. Probably the first and easiest one is whether you have a specific line item in the budget called marketing measurement or marketing metrics. Without this it’s obvious you’re not serious about marketing effectiveness. You’re always going to be wishing you had money (and time) to measure results. You will always be the first to get your budget cut.

Can’t get management approval to fund measurement?
Here are two simple questions to ask the CEO/CFO:

  1. How much do you spend tracking cash? Are there personnel involved, software systems in place and procedures that need to be followed? If there are, then why can’t we spend the same level of effort tracking the effectiveness of marketing?
  2. Would you ever build a building and not know where 50% of the budget went? Would you be able to keep your job after that? If you can make any major investment and spend money managing the project, why wouldn’t you do the same for marketing? 


Marketers need systems just as much as any other department in the company to manage the business of marketing. If you’re investing money in marketing it’s also worth the investment to track the results and make certain they are driving incremental revenue.

If you can execute these steps, you’ve been able to go a long way to measure your results, drive more revenue, profit and share and make better decisions. The time to stop wasting half your marketing budget is NOW.



Over the last 20 years Guy R. Powell, has trained and/or presented his findings and methods to thousands of marketers all across the globe. All of the concepts found in his recent book (www.Marketing-Calculator.com) have been honed and improved through his consulting and training activities to make sure they can be specifically applied to just about any company, regardless of size, industry, category, target customers or country.  His company, DemandROMI (www.DemandROMI.com) has built a strong reputation helping marketers and business executives to take these critical concepts and implement them within his client organizations. He manages the Marketing ROI and Effectiveness group on www.LinkedIn.com.