Brave New World Of Marketing - InformationWeek

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9/11/2003
03:48 PM
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Brave New World Of Marketing

Now more than ever, operations management could be key to your company's success

The corporate mantra today is loud and clear: Do more with less but better than everyone else. For corporate marketing departments, this philosophy signals a revolution. The days when marketing budgets operated in the dark, without clearly contributing to key strategic business goals, are gone. Now companies face external regulations that shed light on previously hidden marketing expenses. In addition, businesses want greater accountability for marketing budgets and more cost containment. As a result, executives must understand how marketing-campaign budgets are spent on a line-item basis, as well as the overall effectiveness of their companies' campaigns.

The Sarbanes-Oxley Act, the accounting-reform and investor-protection legislation passed last year, mandates that internal audit and finance-reporting processes be subjected to a level of scrutiny never before envisioned. Companies with multilevel marketing organizations running multichannel campaigns supporting multiple lines of business can be particularly challenged in providing the low-level cost detail needed for compliance. Even the simplest campaign can involve multiple resource components such as internal staff, agency staff, outsourcing fees, printing costs, creative materials, and media costs. Sarbanes-Oxley has raised the level of urgency for monitoring, tracking, and reporting all marketing costs and resources, whether or not they're generated internally.

Most cost-tracking systems are manual and homegrown, often consisting of spreadsheet files on the PCs of individual members of the marketing staff. The level of internal automation to plan, develop, track, and report on these resources and costs is typically siloed within the marketing department itself, with little integration with the primary corporate financial and accounting systems. But companies need to monitor the costs and resources of outside advertising, print, database marketing, and other third parties involved in the development and execution of campaigns.

To better understand how well the ongoing operations of the business support its strategic goals and match established key performance indicators, companies are investing in business-intelligence tools that require all units to report their business performance and are measuring performance data against established strategic corporate and departmental objectives. As a typical high-cost component of large companies, marketing is a key operational component that needs to be part of this reporting process. Because successful marketing campaigns can have a direct impact on performance indicators, such as growing new markets and expanding wallet share in key customer segments, marketing executives are being pressured not only to produce enhanced cost reporting but also to more clearly demonstrate how their finely designed and executed campaigns support business goals. The fact that they also need to roll up this data from multiple departments in near real time only adds to the challenge.

Luckily for today's marketing executives, who are under pressure to demonstrate the impact that their departments have on both the top and bottom lines, software that addresses these concerns is available.

Systems to manage marketing operations allow you to manage, track, and report the costs, resources, and business goals of multiple marketing programs and campaigns across lines of business. A comprehensive marketing-automation system that includes marketing-operations management should allow you to incorporate the strategic goals of your business that marketing campaigns support, while providing a method of tracking all costs and resources associated with these campaigns to facilitate marketing budgeting and cost control. This functionality should let multilevel marketing organizations combine reporting on business goals and financial measurements, giving management complete visibility into the marketing process.

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