I've read the original WSJ story by Aaron Patrick and a couple of commentaries, but I don't think many people are grasping the significance of econometrics to marketing. All my life as a marketing professional, I've been frustrated by our inability to 'prove' that advertising and marketing expenditures are effectively driving the business. By the time the revenue numbers are in, thousands of outside events and interferences have muddied the results. Econometrics offers hope that we may be able to sort out the relative influence of the business environment from the marketing investment.
It's perfectly appropriate for Chuck Porter and other creative directors to ignore econometrics because it can never help them come up with the next big idea. But it's equally appropriate for Sorrell and chief marketing officers to be very excited about the possibility they can demonstrate the positive effect of increasing marketing budgets on corporate profits. Big ideas demand risky behavior and risky behavior takes a bigger budget and if econometrics helps marketers demonstrate the value of bigger budget, econometrics may make Chuck Porter's life a little easier by providing more resources. But not a lot easier--big money doesn't always lead to big ideas anyway. No easy answers.
WSJ.com - Econometrics Buzzes Ad World As a Way of Measuring Results by Aaron O. Patrick (subscription required)
Sharing the stage with Sir Martin [Sorrell, CEO of agency conglomerate WPP] at an advertising conference last month in Cannes, France, was Chuck Porter, chairman of Miami ad agency Crispin, Porter Bogusky. In response to comments from Sir Martin advocating a more scientific approach to measuring the effectiveness of ads, Mr. Porter said, "I don't understand what we're talking about." The audience cheered and clapped.