The big buzz in marketing today is about making the practice more accountable. We're hard-pressed to find a marketing bestseller that doesn't talk about ROI. The Association of National Advertisers, a trade association representing more than 300 companies with 8,000 brands that collectively spend over $100 billion on marketing communications and advertising, has made making marketing more accountable the theme for conferences and events in 2005. The business press has dedicated stories to it—most recently BusinessWeek. As that magazine reported, the accountability movement has "companies in every segment of American business obsessed with honing the science of measuring marketing performance." While we love the fact that marketers have embraced marketing-science-enabled metrics, we fear a preoccupation with measurement systems is steering the drive towards accountability in the wrong direction.

In just a few quick years, "Marketing has gone from being a cost or expense to an investment," observed Martyn Straw, chief strategy officer at BBDO Worldwide. "Call marketing an equity investment, and suddenly there's lot of accountability in the room." Marketing science more than kept pace with marketer's demands for metrics that meet and exceed senior management expectations for specific and precise ROI reporting. Advancing technology allowed the collection of much better data, subsequently improving measurement exactitude. The application of marketing science tools, sophisticated algorithms, and vanguard modeling techniques made what once seemed impossible—linking marketing investments in advertising, for example, directly to market share, sales, and profits—not only possible, but commonplace.

With all these options at their finger tips, you'd think marketers would be delighted. Strangely, in a recent survey of senior marketing executives, more than 80% indicated that they were, in fact, dissatisfied with their ability to measure marketing ROI. Fewer than 20% of marketers in a CMO Council poll said their companies employed comprehensive and meaningful metrics.

This high level of dissatisfaction does not stem purely from an inability to get to the hard measures CEOs and CFOs like—as we just discussed, the metrics are there. Instead, it's the results the performance measures report that are the real source of unhappiness. The data we've collected over the past decade about the performance of marketing programs from companies in a variety of consumer and b-to-b industries reveals that the vast majority return a negligible, if not negative, return on investment. No matter how sophisticated the measurement system, the results it reports are based on the inputs that go into it; a fuzzy market target, weak positioning, poorly configured product or service, mediocre advertising campaign, and C-grade customer satisfaction won't produce the kind of ROI that will knock the socks off the CEO and CFO.

Unfortunately, a metrics-equals-accountability mentality has marketers focused on what's wrong with the marketing measurement system instead of what's wrong with the underlying marketing strategy. Spending money on metrics is a waste if you aren't going to also spend at least equal time and money fixing what's leading to the bad results in the first place. Developing the financially optimal targeting, positioning, marketing communications, product or service configuration, pricing, distribution, etc., components of a marketing strategy leads directly to high performance plans and programs that produce impressive ROI results if implemented obsessively and compulsively.

Accountability is more than just showing numbers; it's about improving performance. To make the practice more accountable, marketers have to start with strategy first and use measurement systems that enable marketers to pinpoint, diagnosis, and treat strategic issues, as well as tactical problems. This is the approach that will finally earn them that much sought-after seat at the boardroom table.

We feel a bit like we've entered the fifth dimension when we look at the lay of the land in retailing today. Wal-Mart, the 800-pound industry gorilla, Fortune's most admired brand, and the poster-child of operational efficiency, for the first time in our memories looks vulnerable. While reports of the chain's demise are greatly exaggerated—it will register some $300 billion in sales this year, let's not forget—the firm's utter dominance of the retail landscape is much less certain than it was just a few months ago. As if that weren't strange enough, many Wal-Mart's big box competitors have done what was heretofore heretical: They aren't trying to out cheap Wal-Mart, they're instead trying to get and keep more profitable customers.

What happened to Wal-Mart is not unexpected in our minds. The retailer has very clearly positioned itself as the low-price provider. In fact, it's one of the few retailers out there offering a consistent and compelling (to many shoppers) reason-to-buy message. The company constructed an impressive inventory management system and pushed suppliers to cut costs (sometimes at the expense of quality) in order to deliver on their low price promise and still earn a margin higher than competitors selling similar goods. "Wal-Mart is about selling a commodity," explained über retail analyst Marshall Cohen, and they do this very, very well. That hasn't changed and we don't expect it to.

But, as our readers know, anywhere from 65%-85% of buyers in any category are looking for something other than just a low, low price. In many cases, these people want a better retail experience than what Wal-Mart offers or stylish, brand name merchandise that reflects their lifestyle. Competitors such as Target, Bed Bath & Beyond, and Best Buy weren't able to match Wal-Mart on price and stay in business, so they started to look for other points of differentiation. Target, for instance, promotes its hip, "cheap chic" merchandise and its relationships with leading designers such as Micahel Graves, Isaac Mizrahi, Amy Coe, and Liz Lange. Because electronics manufacturers were either unable or unwilling to bend to Wal-Mart's demands, the chain offers no-name and private-label brands for popular electronics items such as DVD players. Many consumers are unwilling to give a no-name brand as a gift during the holidays, no matter how low the price, so are going some place like Best Buy and not Wal-Mart to make a purchase.

Having seen the fruits of their labors to differentiate from Wal-Mart and avoid a price war, competitors have gotten increasingly comfortable with letting ultra-price-sensitive and otherwise unprofitable shoppers go. Best Buy, for example, the largest (in terms of sales) consumer electronics retailer in America, has launched a new strategy to weed out unprofitable customers. These folks represent approximately one-fifth of all of its customer visits per year and "wreak enormous economic havoc," according to Best Buy CEO Brad Anderson. Best Buy determined that these folks routinely buy products, apply for rebates, return the purchases, and then buy it back at returned-merchandise discounts. They stay on the look out for major "loss leader" price cuts on electronics like DVD players intended to boost store traffic, only to resell their purchase on eBay for a profit. As further salt in the wound, they scour the web and newspapers for the lowest prices and take it to Best Buy to demand the store make good on its lowest-price promise.

Not only has the company declared its new customer targeting strategy, it's taking steps to implement it in the field. Best Buy has retrofitted and merchandised stores to appeal to the needs and likes of "good" customers in local market areas and sales associates are trained to distinguish the good from the bad in stores, spending time showing additional products and services that would likely appeal to the more profitable folks.

Again, we don't expect to see Wal-Mart disappear from the retail scene anytime soon and there are plenty of retailers still focused on out-cheaping the competition, but it sure feels like a whole new retail world.

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Everyday, millions of American women leave their children at daycare or with nannies and babysitters to make the trek into work. In fact, 70 percent of women with children under the age of 18 work outside the home—a 45 percent jump from 20 years ago. Many have little choice but to go back to work, but even those who do have a choice agonize over the decision. According to the Census Bureau, nearly half of women with children are back at work within a year of a child's birth, yet only half of all women believe they can adequately fulfill their responsibilities to their children if they work full-time. Just 13 percent of working women with children want to work full time, regular hours, although 52 percent of them hold full-time jobs.

Concerns about the lasting developmental and emotional effects of leaving a child to return to work contribute to a working mom's often overwhelming feelings of guilt. As a check on these concerns, we decided to take a closer look at the opinions and attitudes of people who reported their mothers worked while they were growing up and discovered they are far more progressive than those with stay-at-home moms on many important social issues.

Our analysis of data from a recent National Opinion Research Center General Social Survey, which includes interviews with more than 1,800 men and women over the age of 16, found that in terms of education and income, both groups were similar. They do differ attitudinally, however, with those with working moms expressing more liberal opinions than their stay-at-home counterparts. A majority of people with working moms, for instance, support euthanasia in the case of terminally ill patients and increased government spending on environmental protection. Members of this group are also more likely to support the legalization of marijuana and see less of a problem with homosexuality. The offspring of working moms also appears more web-savvy and dedicated to careers, with the vast majority saying they would continue working even if they became rich.

People who reported that their mother did not work while they were growing up, on the other hand, are more likely to have lived in a traditional family during their formative years, with 81 percent reporting they lived with both their mother and father when they were 16. A more conservative group, they are more likely to take issue with homosexuality and government responsibility for childcare. They also have a negative view of their financial situation with a majority reporting it has not improved over the past few years.

Here are some of the discriminating characteristics we found:

For more insightful marketing discoveries, visit http://www.copernicusmarketing.com/discover/index.htm

Have a hot discovery for our next release? Contact us at info@copernicusmarketing.com

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The American Marketing Association Foundation (AMAF), the non-profit arm of the American Marketing Association (AMA), named Trading Up: The New American Luxury (Portfolio), by Michael J. Silverstein and Neil Fiske, as the 2004 winner of the Berry-AMA Prize for the Best Book in Marketing. The award, established by Dr. Leonard L. Berry, a distinguished author and professor at Texas A&M University, annually recognizes the top books in marketing in the past three years that present innovative ideas and have a significant impact on the practice.

Trading Up explores the willingness of America's middle-market consumers to "trade up", paying a premium price for goods and services that are emotionally important to them and deliver perceived values of quality, performance and engagement. Silverstein and Fiske examine the demographic and behavioral changes that drive the trading-up phenomenon and offer examples of how companies create a successful mass luxury product or service.

The AMAF also named four additional Berry-AMA Book Prize finalists as runners-up:

• How Customers Think: Essential Insights into the Mind of the Market (Harvard Business School Press), by Gerald Zaltman
• Marketing ROI: The Path to Campaign, Customer, and Corporate Profitability (McGraw-Hill), by James D. Lenskold
• The Influentials (The Free Press), by Ed Keller and Jon Berry
• The Rule of Three: Surviving and Thriving in Competitive Markets (The Free Press), by Jagdish Sheth and Rajendra Sisodia

All five books are available for purchase through the AMA's website at: www.marketingpower.com/amabookstore and discounts are available for AMA members.

Our congratulations to Trading-Up and to the runners-up.

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The Institute of International Research's Return on Marketing Investment, The New Era of Accountable Marketing, conference takes place on January 12-14, 2005, in Miami. Not only will Copernicus Chairman and CEO Kevin Clancy give what is sure to be one of the most talked about presentations of the year, "Beyond STM and Marketing Mix Modeling: The Evolution to Marketing Navigation Stations," but marketing gurus including the dean of American marketing professors Phil Kotler also will share important insights for making the practice more accountable.

As a subscriber to The Copernicus Mzine, you're entitled to a 15% discount off the standard fee. Use priority code SPKRM1721CM, when registering to get the special discount. Click this link for the full agenda and registration information: http://www.iirusa.com/accountablemarketing/

The agenda for the American Marketing Association's Strategic Marketing Conference, Six Sigma Marketing: Turning the Dream into Reality with the Best Ideas in Marketing Today, features an all-star line-up of speakers including Jagdish Sheth and Rajendra Sisodia, authors of The Rule of Three: Surviving and Thriving in Competitive Markets; Michael Silverstein, author of Berry-AMA Book Prize winner Trading Up; Ed Keller, author of The Influentials; James Lenskold, author of Marketing ROI: The Path to Campaign, Customer, and Corporate Profitability; and more.

The AMA conference will take place on May 9-11, 2005, at the lovely Fairmont Hotel in downtown Chicago. The 2004 conference sold-out in record time, so register early to reserve your spot at the 2005 conference. For more information, visit: http://ecommerce.ama.org/strategic.htm

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