Drivers
Identifying High Performance Indicators
What Drives Efficiency and Effectiveness in Managing Marketing Expenses? 13% of the variation in the level of total marketing expenses is explained by the factors from the A&C Ecosystem. Only 18% is attributable to expertise managing marketing expenses. The predictors together explain some level of variation in the performance measure. The higher the variation explained, the more the predictors are actually predicting performance. In this case, more than two-thirds of variation in marketing expense levels is random. Marketing Expense allocations may attract somewhat less attention and focus in terms of organizational objectives, leading to higher levels of random variation and lower levels of intellectual capital developed by organizations.
The greater the error in measurement – i.e., sloppy or inconsistent reporting -- the greater is the proportion of unexplained variance that will ultimately end up in the random error component. Inconsistent measurement across organizations in terms of what constitutes a marketing expense versus program, development, education or volunteer expense may be a partial cause. With respect to attention and objectives, how many arts organizations view marketing as an integral part of organizational success? At the executive level, do they allocate resources and effort to careful analysis of what marketing resources are necessary given revenue objectives or return on marketing? Or do they allocate a fixed amount or fixed percentage to marketing efforts each year or for each event, assuming that marketing will need the same resources for the same direct mail campaigns, list swaps, and occasional newspaper ad that they have always implemented? The relatively low Marketing Expense KIPI suggests that less attention is paid to marketing budget allocations.