McKinsey Quarterly just published “Measuring marketing’s worth” (free subscription necessary). All of us marketers struggle with answering this—not because we cannot measure outcomes, but because we don’t have good traceability: inputs are difficult to connect to outcomes (often because of cross-channel marketing activities). Or as the saying goes: 50% of marketing dollars are wasted; we just don’t know which 50%.

In short, the article posits the following “five basic questions”:

1. What exactly influences our consumers today?
Marketers must be ready to use the findings to debunk accepted wisdom and legacy rules of thumb. In today’s fragmented media world, only by knowing how the way consumers interact with your company has evolved can you begin to make more cost-effective marketing investments that truly influence purchase decisions.

2. How well informed (really) is our marketing judgment?
Data remain only as useful as the expertise you bring to bear, and good judgment will remain a hallmark of the best marketers.

3. How are we managing financial risk in our marketing plans?
Managing risk is critical, and marketers shouldn’t be shy about putting this issue squarely on the table. With thoughtful scenario planning and cross-functional participation, such discussions can be extremely rich and rewarding.

4. How are we coping with added complexity in the marketing organization?
First, you’ll require a number of specialists. Second, you’ll need somebody who both integrates marketing efforts across channels and communications vehicles and focuses on the bottom line. Finally, you’ll need absolute clarity in processes, roles, and responsibilities not only within the marketing organization but also throughout your company (across functions and business units) and externally (with agencies and external vendors).

5. What metrics should we track given our (imperfect) options?
The volume of data available today should make it possible to find metrics and analytic opportunities that take advantage of your unique insights, are understood and trusted by your top team, provide proof of progress, and lay a foundation for more sophisticated approaches to tracking marketing ROI in the future.

Again, you really should read the whole article, rather than just the truncated excerpts above.

After that you have to read John Stauffer‘s “Social Brand Planning” article (Journal of Brand Strategy, April-June 2012, Volume 1, Number 1). John wrote the must-read (!) marketing article of the year so far: very strategic with excellent tactical guidance.

Specifically, John Stauffer explains in detail what and how brand planners need to execute:

  • Actively listen to slow and fast culture.
  • Identify their biases early on in order to break down some of their barriers to empathy that exist within brands and agencies.
  • Apply insights from social media upstream into the major arteries of brand planning.
  • Build consensus on a cross-practice measurement model designed to yield a realistic and timely assessment of marketing and communication efforts.
  • Lead an enterprise-wide planning model that acknowledges consumers do not think of a brand in discrete categories of marketing, communications, public relations, or advertising.

Run, do not walk, to your nearest library, and demand a copy of the journal. Or just buy it. Then you can answer the five questions McKinsey has thrown at you.