Positioning master Al Ries, writing in AdAge, has come out strongly against a metrics-only approach to marketing and business. The article, “Metric Madness: The Answer to Mathematical Failure Seems to Be More Math,” can be found here. (Registration may be required.)
What is Metric Madness? It’s the notion you can run anything by the numbers, and it’s become the hottest concept in business today.
The marketing community eats this stuff up. Nobody generates more data than they do.
Perhaps it takes mathematical skills to run a major corporation today. But if the CEO loads up the company with similar people, he or she will squeeze the life out of the organization.
If you run a company by the numbers, you’ll eventually run the company into the ground. You might be successful in the short term, but never in the long term, as the financial crisis demonstrates.
Left-brain managers are verbal, logical and analytical. Nothing wrong with that, as long as management also takes the remedy to counteract its overemphasis on mathematics.
The antidote to management, to paraphrase Club Med, is marketing.
Almost everything about marketing is the opposite of the typical manager’s approach to running a business. Marketing is illogical and definitely not analytical. Marketing is intuitive and holistic.
We’re concerned, however, that this message is being ignored by the marketing community, who seem to be drifting from the right to the left — from a right-brain approach to a left-brain approach.
Take the current emphasis on marketing ROI, return on investment. In most cases, to determine the ROI of a marketing program is an expensive exercise with little or no value.
An experienced marketing executive, in my opinion, instinctively knows whether a marketing program is working or not. Does Apple need to waste money trying to determine the ROI of its marketing efforts?
What Apple is doing is working. What Microsoft is doing is not. You don’t need ROI numbers to figure this out.
Then there are many situations where the ROI is zero and yet the marketing expenditures are worthwhile. Take leadership, for example.
Nothing about a brand is more valuable than its market leadership. If a brand loses its leadership, it loses its most significant advantage in the marketplace. That valuable position is worth protecting. And advertising is the best way to protect it. Nike in athletic shoes. Heinz in ketchup. Rolex in watches.
Suppose a leading brand spends $50 million a year on advertising. And suppose that brand’s market share doesn’t budge at all. Was that $50 million wasted? Not necessarily.
Advertising is more like insurance than it is like an investment. What’s your “return on investment” of a five-year term life insurance policy if you don’t die? Zero.
But, of course, you don’t buy an insurance policy to make money. You buy an insurance policy to protect your family in case you die.
The overall practice of marketing is not mathematically based, although subsets of the discipline may be: direct marketing, research, media selection.
Marketing is certainly not 70% mathematics. It’s not even 1% mathematics. (As a math major in college, I don’t think I’ve ever used integral calculus or differential equations or any other mathematical concept in our marketing practice.)
Marketing is a discipline that can only be learned by exposure to marketing case histories over an extensive period of time.
Mathematics is logical. Marketing is not. That’s why marketing is so difficult to learn.
Mr. Ries makes a number of different points. Readers, what do you think? Where is he on target, and where is he off?
About Matthew Fenton: Matthew founded Three Deuce Branding in 1997 with a simple mission: “To help good people build great brands.” He’s a former CMO who repeatedly led underdog brands to dramatically outpace the market, and now he does the same for the clients he serves. Businesses with revenues of seven to ten figures trust Matthew to help them achieve “brand clarity” through core brand strategy and positioning. Matthew is also a highly-rated speaker. Contact Matthew here. He’s based in Chicago.
Copyright 2009 – Matthew Fenton. All Rights Reserved. You may reprint this article with the original, unedited text intact, including the About Matthew Fenton section.