London

BEWARE THE SILVER METRIC: MARKETING

PERFORMANCE MEASUREMENT HAS TO BE

MULTIDIMENSIONAL

TIM AMBLER AND JOHN ROBERTS1

Centre for Marketing Working Paper

No. 05-709

September 2005

1

Senior Fellow and Professor, respectively, London Business School. John Roberts also has a joint

appointment as Scientia Professor at the Australian Graduate School of Management, The University of

New South Wales.

Beware the silver metric: marketing performance

measurement has to be multidimensional

Tim Ambler and John Roberts2

Report Summary

Since the accountability spotlight fell on marketing, researchers have been seeking a single

indicator, or “silver metric”, that can summarize marketing performance in much the way that

shareholder value is held by some to be the bottom line for public companies. This paper

shows why no silver metric can adequately summarise marketing performance and how firms

should best come to terms with the small mix of financial and non-financial indicators that are

needed. Firms also need to be wary of the dangers of using forecasts of future uncertain

rewards in evaluating the performance of past marketing activity.

In this paper, marketing is taken to be what the whole firm does to source and harvest cash

flow as distinct from what the specialist marketing department (if any) does. Different firms

task their marketing departments with different responsibilities toward the firm’s overall

marketing.

Marketing performance is essentially multi-dimensional. A firm needs at least as many

metrics as it has goals of which short-term survival and long-term growth are the most

common. And even for a single goal, progress may need to be assessed in multiple ways.

Reducing multiple metrics to a single index denies the multidimensional nature of the market

with which the firm is dealing. The greater the potential for these objectives to move in

different directions, the greater is the danger of this simplification.

Some firms brush theory aside and look nevertheless...