Metrics and CEOsA few words about metrics and CEOs (and other senior managers). CEOs rarely pay attention to marketing metrics. And when they do pay attention, they don't think about marketing metrics in the same way marketing people do. Let's put those statements in context. What are the main responsibilities of a CEO? Set strategy, make big decisions, allocate resources, communicate with the board. The ROI QuestionTo a great extent, a CEO's job consists of allocating resources. Most of the questions a CEO must answer boil down to:"Should we do this? Why? If we do it and do it well, what will we gain?" Essentially that is the ROI question: "If we invest a dollar in this, how many dollars of gross profit will we gain as a result?" Like it or not, that is how a typical CEO thinks. It's probably how your CEO thinks. So, marketing metrics and CEOs do not often cross paths. CEOs may care that advertising and PR properly reflect the approved corporate strategy. Or they may get an ego boost out of ad/PR. Marketing Metrics at the Country ClubBy the way, that's a big reason why they tend to like institutional advertising as opposed to direct-response advertising, even though direct-response is much more profitable.Institutional wins the admiration of other executives. People at the CEO's country club may say admiringly, "Jim, I saw that great ad you ran during the Super Bowl." But nobody at the country club will ever mention direct-response advertising: "Jim, I really liked that great sales letter you've been mailing lately." And that is about it, so far as marketing metrics and most CEOs are concerned. And what about ROI? Well, the typical CEO pays little or no attention to the ROI of advertising or public relations. Usually the budgets are too small for him to worry about, compared to other budgets that get his attention. For proof, consider that, when a CEO does pay attention to the ROI of advertising or PR, it's almost always advertising. Bigger budgets than PR. Often five, ten or twenty times the size of PR. In most large companies, PR is a small fraction of one percent of sales. Hardly visible at all. But when a CEO or other senior manager does get interested in the profitability of advertising or PR, you must be ready to talk the language of senior management. Being unprepared can be dangerous.
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