Rust (2004b) Measuring Marketing Productivity

Rust (2004b) Measuring Marketing Productivity - 76 /...

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Unformatted text preview: 76 / Journal of Marketing, October 2004 Journal of Marketing Vol. 68 (October 2004), 76–89 Roland T. Rust, Tim Ambler, Gregory S. Carpenter, V. Kumar, & Rajendra K. Srivastava Measuring Marketing Productivity: Current Knowledge and Future Directions For too long, marketers have not been held accountable for showing how marketing expenditures add to share- holder value. As time has gone by, this lack of accountability has undermined marketers’ credibility, threatened the standing of the marketing function within the firm, and even threatened marketing’s existence as a distinct capa- bility within the firm. This article proposes a broad framework for assessing marketing productivity, cataloging what is already known, and suggesting areas for further research. The authors conclude that it is possible to show how marketing expenditures add to shareholder value. The effective dissemination of new methods of assessing mar- keting productivity to the business community will be a major step toward raising marketing’s vitality in the firm and, more important, toward raising the performance of the firm itself. The authors also suggest many areas in which further research is essential to making methods of evaluating marketing productivity increasingly valid, reli- able, and practical. Roland T. Rust is David Bruce Smith Chair in Marketing, Chair of the Mar- keting Department, and Director of the Center for e-Service, Robert H. Smith School of Business, University of Maryland (e-mail: rrust@rhsmith. umd.edu). Tim Ambler is a senior fellow, London Business School (e-mail: tambler@london.edu). Gregory S. Carpenter is James Farley–Booz Allen & Hamilton Professor of Marketing Strategy, Kellogg School of Manage- ment, Northwestern University (e-mail: g-carpenter@kellogg.northwest- ern.edu). V. Kumar is ING Chair Professor and Executive Director of the ING Center for Financial Services, University of Connecticut (e-mail: vk@business.uconn.edu). Rajendra K. Srivastava is Roberto C. Goizueta Chair in e-Commerce and Marketing, Goizueta Business School, Emory University (e-mail: raj_srivastava@bus.emory.edu). The authors thank Don Lehmann for his wise guidance and insightful ideas. M arketing practitioners and scholars are under increased pressure to be more accountable for and to show how marketing expenditure adds to share- holder value (Doyle 2000). The perceived lack of account- ability has undermined marketing’s credibility, threatened marketing’s standing in the firm, and even threatened mar- keting’s existence as a distinct capability within the firm. The Marketing Leadership Council (2001, p. 27) reports that 70% of advertising budgets are in decline, compared with 51%, 47%, and 44% for human resources, information technology, and general counsel functions: “Having exhausted cost-saving opportunities in virtually every other function,” marketing is “next in the line of fire.” There are three challenges to the measurement of mar- keting productivity. The first challenge is relating marketingketing productivity....
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Rust (2004b) Measuring Marketing Productivity - 76 /...

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