EMBARK ON THE ACCOUNTABILITY MARKETING JOURNEY THE FORBES MARKETING ACCOUNTABILITY INITIATIVE

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1 EMBARK ON THE MARKETING ACCOUNTABILITY JOURNEY A Proven Process For Continuous Improvement In Marketing Performance THE FORBES MARKETING ACCOUNTABILITY INITIATIVE Powered by

2 THE CHALLENGE: PROVE AND GROW THE VALUE MARKETING CREATES Most marketers lack the externally validated standards for measurement of media, brand and attribution needed to better connect marketing investment to business outcomes. There are many layers to marketing performance. It takes a complex portfolio of measures. Leadership tends to be overly obsessed with sales attribution and cost of acquisition without factoring important factors like brand perceptions, brand preference, or trust. David Edelman, CMO Aetna Growth - Support big growth strategy, trade-off, and growth investment decisions with facts vs. gut intuition Developing a collective understanding of how business functions work together to contribute to growth is important because growth has become a team sport. Thinking like a shareholder requires teamwork. You need to partner with IT, sales, compliance, service and product to drive sustainable growth quality relationships. Denise Karkos, CMO TD Ameritrade Financial Viability - Communicate and quantify how marketing investment contributes to enterprise value and growth investment Teamwork - Collaborate with other business units to allocate capital, investment and budget to optimize growth and ROI Without consensus measures of the value they create, CMOs face big credibility gaps and enterprise value creation suffers. MASB research found that most organizations fail to achieve these growth results because they fail to agree on a set of clearly defined, common sense, externally validated standards for measuring marketing performance. The linkage between marketing metrics and financial outcomes needs further development Deborah Wahl, the Vice Chair of the Association of National Advertisers Transparency - Data and metrics to provide staff, solution providers and the marketing services supply chain clear criteria, incentives and performance goals Metrics create value because they facilitate teamwork and help us define collective goals. Only when we have commonly agreed upon and externally validated metrics for marketing s contribution to enterprise value will we be able to work with the marketing services supply chain as a team, not suppliers. Elissa Fink, CMO Tableau 2

3 IMPLICATION: WITHOUT CONSENSUS MEASURES OF THE VALUE THEY CREATE CMOS FACE BIG CREDIBILITY GAPS AND GROWTH SUFFERS 97.4% 59% 78% of boards do not have CMO representation 2 of CMOs are under pressure from the CEO to prove the value of marketing 3 of CMOs feel the inability to communicate, quantify and optimize the value marketing creates hurts them personally and professionally 1 Sources: 1) Forbes CMO Research, 2) How Board Level Marketing Experience Improves Firm Value, Whitler, Krause, Lehman 2015, 3 Duke Fuqua CMO Survey

4 THE SOLUTION: MAP- To help Global 5000 organizations overcome the obstacles to growth and accountability, Forbes is offering select business leaders the Marketing Accountability Program. Member organizations who participate in the program lead change and accelerate growth in their organizations by improving the return on marketing investment and taking a team approach to growth. Through directengagement in continuous improvement programs and proprietary research workstreams, we work with our members to develop externally validated best practices, standards, benchmarks, and tools to help measure and manage the contribution of marketing investments and strategies to enterprise value. Fully participating members get proprietary peer-to-peer access to the insights of leading practitioners, academics, global standard setting bodies, and subject matter experts in the measurement and analysis of marketing performance. Working in inter-disciplinary teams, our organization identifies, validates and shares common sense and systemic ways members can improve marketing performance and growth. Our program is unique because our member organizations achieve concrete goals and generate measurable financial outcomes through continuous improvement in marketing performance and ever-rising thresholds of return. MAP members participate in: 1. Ongoing performance improvement programs that achieve concrete goals and measurable financial outcomes 2. Standards setting with global regulatory, media and measurement organizations 3. Member-defined best practices, project teams, and research initiatives focused on overcoming the top obstacles to marketing accountability and growth 4. Externally validated performance benchmarking to establish a baseline of where your organization stands on the marketing accountability journey 5. Professional development programs in Marketing Finance, Performance Measurement and Financial Reporting of marketing returns, operating assets and performance. 4 TEN BENEFITS OF THE PROGRAM 1. DEFINE COLLECTIVE GROWTH GOALS 2. IMPROVE RETURN ON MARKETING INVESTMENT (ROMI) 3. HAVE A VOICE IN STANDARDS SETTING 4. FACILITATE TEAMWORK WITH FINANCE 5. DEVELOP DATA-DRIVEN MEASURES 6. SUPPORT GROWTH STRATEGIES AND INVESTMENTS WITH FACTS 7. REDUCE THE TIME, COST AND COMPLEXITY OF MEASURING PERFORMANCE 8. GAIN EXTERNAL VALIDATION 9. GENERATE A FINANCIAL RETURN ON ANALYTICS 10. BUILD SKILLS AND CREDIBILITY

5 A PROCESS FOR CONTINUOUS IMPROVEMENT IN MARKETING PERFORMANCE Establish a Consensus Executive Charter For Marketing Accountability a. Build a management consensus about the size and nature of the opportunity to improve the return on marketing and grow firm value b. Establish clear charter with executive sponsorship for a continuous process improvement program c. Establish a cross functional team of marketing, finance, analytics with executive sponsorship from the Chief Marketing Officer to lead change in your organization d. Achieve a shared understanding on the key milestones and financial objectives along the marketing accountability journey THE MARKETING ACCOUNTABILITY JOURNEY SM Benchmark Where Your Organization Stands on the Marketing Accountability Journey a. Establish a baseline benchmark of where your organization stands against 12 core measurement and accountability competencies of best in class organizations b. Formal onboarding process with the core team using a structured current state analysis to: Document and rank the top barriers to marketing accountability and growth Quantify the size of the opportunity to improve marketing return on investment (ROMI) and financially viable measures of success Inventory current growth and productivity initiatives Align the program with current P&L, planning, budgeting, and financial reporting structures Define specific performance improvement priorities and quantifiable goal milestones a. Identify process and performance improvement goals individualized to your organization b. Establish performance improvement priorities including: Identifying low hanging fruit opportunities to improve accountability and growth performance Generating measurable financial return from investments in analytics and data platforms. Collaboratively execute continuous improvement initiatives with peers and mentors a. Fully participating members are matched with strategically aligned MASB project teams and subject matter expert mentors in key areas of opportunities for their particular organization. b. Engage directly with peer organizations to share practices and compare performance c. Set progress milestones for quarterly improvement in financial return d. Align and adapt the role and scope of marketing and the CMO with the key drivers of growth and value. Measure and Track Success Against Ever Rising Thresholds of Performance a. Track and measure progress against a common set of finance approved metrics for evaluating marketing performance across a variety of paid, owned and earned marketing investments. b. Properly value marketing operating assets that drive value and growth including the brand and owned marketing assets c. Establish ever rising thresholds of performance to drive profit and share price improvement d. Improve financial reporting of marketing return on investment and operating assets based on externally validated global standards 5

6 THE FORBES MARKETING ACCOUNTABILITY INITIATIVE Powered by The Forbes Marketing Accountability Initiative powered by MASB is an exclusive member organization where Marketing, Finance And Analytics leaders work together with academics, experts and peer practitioners to measure and continuously improve the value of marketing contributes to the business. Our members are dedicated to proving the value of marketing and helping business leaders achieve a consensus on common-sense business practices for evaluating, measuring and growing the contribution of marketing to shareholder value, and informing critical growth investment decisions. Working in partnership with the Marketing Accountability Standards Board (MASB) and a Marketing Executive Advisory Council, we seek to establish benchmarks, methods and standards to better connect marketing strategies, investment and actions to business outcomes, growth and value creation. Our goal is to work with leading marketers, academics, standard-setting bodies and experts to come up with practical solutions to the top measurement challenges facing CMOs, including: Maximizing the Return on Marketing Investments And Assets Supporting Strategic Trade-Off Decisions with Facts and Data Optimizing the Performance of an Expanding Marketing Investment Portfolio Closing the Marketing Performance Credibility Gap We invite you to join our membership of performance-oriented CMOs and collaborate with your peers in Finance and Analytics to establish a consensus and externally validated framework for measuring, communicating and maximizing the contribution of marketing investment to shareholder value and growth. To learn more visit our web site at or contact Stephen Diorio at sdiorio@forbes.com or Tony Pace at tonypace@themasb.org 6