The art and science of marketing

art or science?

Of course marketing is a bit of both. But how much art and how much science?

The CMO of an Australian software firm believes that marketing today is 70% science, 30% art. His point: Every business should be using science (sophisticated analyses, big data, etc) to support decisions about marketing. At the same time, the creativity of art is key to developing marketing that touches hearts and minds.

Science is vital for targeting, in particular. A Google marketing exec points to the quest for 'right place, right time, right message' and how science can inform decisions about place and time. Yet art is needed for marketing that creates 'brand magic', in his words.

The CMO of an auto insurance firm observes that many marketers 'are so proud of their art but they don't know their science'. This firm is serious about the science of marketing, doing media buying in-house for tight control over targeting and timing. Still, given the intense competition in the insurance business, this CMO looks to art for the edge: 'We're not going to out-pend anybody. We're going to out-create them'.

Creativity is necessary to achieve breakthrough marketing campaigns that are memorable and drive results. And sometimes, as one agency exec notes, marketers have to take a chance and use intuition even when 'we know measurement is thin'. 

The bottom line is, in reality, the bottom line--science (metrics and KPIs, for instance) can tell us how well the marketing is working. Creativity in marketing, the art, must have a purpose. Through science (planning, testing and evaluating) we can determine how well the art delivered on the marketing objectives. Art and science in marketing!

Most popular posts of the past 7 years

In a few days, my blog celebrates its 7th anniversary. It's time to see which posts were the most popular during the first 7 years.

Above, the results via Google's stats: Yes, competitors are stakeholders is clearly the winner--by far. Nearly 10% of the visitors to this blog want to know whether competitors are stakeholders (or want to see the arguments in favour). It's an important and relevant topic, with good arguments on both sides.

Tesco is one of the largest retailers active in international retailing. It's also a case study in many college classrooms, and my book analyses its marketing activities, so two of my many posts about the retailer are among the most-viewed of all time.

Key performance indicators (KPIs) attract many views, as do product lifecycle and sustainability posts.

Thank you for reading. Welcome to my 8th year of blogging about marketing in the UK and around the world.

Keeping up with key performance indicators (KPIs)

Key performance indicators (KPIs) are specific financial and non-financial measures that a company, governmental agency or NGO uses to determine whether its marketing strategy is moving the organisation in the direction of its short- and long-term goals.

Different industries rely on different KPIs to assess marketing performance. Banks--including Metro Bank, based in London--want to increase the number of account-holders, increase the number of services utilised by each customer, increase deposits and retain customers for years. Performance is measured by KPIs that indicate progress towards those goals.

Metro Bank, a 'challenger bank' competing with long-established banks on the high street, differentiates its neighborhood 'stores' on the basis of responsive, in-person service while offering online and mobile banking for customers who want tech options. Measuring the results of Metro's marketing strategy requires KPIs that link back to the goals, such as growth in customer deposits. Another KPI is profitability--so far, a goal that Metro Bank is moving towards but has yet to achieve.

What about KPIs for retailers? Online grocery retailer Ocado seeks to increase customer spend, among other goals, which translate into KPIs such as growth in average order size. As the above table from Ocado's recent results indicates, other KPIs include average number of orders per week, average deliveries per van per week and on-time delivery performance. Product wastage is not just a financial measure--it affects Ocado's sustainability performance, as well.

Keeping an eye on key performance indicators (KPIs)

'Our KPIs measure how we are doing across the Group in terms of both operational and financial performance in the context of the key elements of our strategy'. - Tesco 2012 Annual Report

Key performance indicators (KPIs) are specific measures that a company like Tesco uses to determine whether its marketing strategy is moving the organisation toward its short- and long-term goals. In the case of Tesco, KPIs include certain measures of profitability, growth in store sales, market share and customer satisfaction.

Royal Mail Group analyses results based on KPIs in four areas: people, performance, financial and customers. 'People' KPIs such as safety and customer focus relate to what Royal Mail's employees do on the job. 'Performance' KPIs such as revenue show how the organisation is progressing toward overall performance objectives. 'Financial' KPIs such as profit and costs measure financial outcomes that are vital to Royal Mail's long-term viability. 'Customer' KPIs, including satisfaction and complaints, bring the customer's perspective into an assessment of whether Royal Mail is successful.

BT monitors KPIs according to specific areas of focus, including: customers (such as customer satisfaction and average revenue per customer household), employees (employee engagement index), suppliers (ethical trading), improving society (investments in social responsibility), environment (reducing carbon footprint) and integrity (ethics/anti-corruption).

The choice of KPIs depends on the organisation's mission, goals, strategic choices and implementation. Because no organisation has unlimited resources, KPIs keep management focused on making a difference in vital areas--and help management pinpoint possibilities for improvement when actual KPI measurements don't match expectations.