Beware of the McNamara Fallacy When Creating Your Marketing Strategy

Most of you have probably heard the story about the inebriated man who had lost his house keys and is searching for them under a street light. A police officer comes over and asks what he's doing.

"I'm looking for my keys," the man says. He points to a spot about 20 feet away and says, "I lost them over there."

The police officer looks puzzled and asks, "Then why are you looking for them all the way over here?"

The man replies, "Because the light is so much better over here."

For the past several years, marketers have faced relentless pressure to prove the value of their activities and programs. In response to these pressures, they are placing greater emphasis on measuring the performance of marketing tactics, channels, and programs, and many marketing leaders are allocating budgets and basing marketing mix decisions on performance data.

Overall, this has been a good thing. It's hard to argue that marketers shouldn't measure the performance of their activities and use performance metrics to guide marketing investments. Common sense says this should lead to better decisions.

But, marketing performance measurement can also have a dark side. The problem arises when the ability to easily measure a marketing tactic becomes the primary criterion for determining its value.

When taken to the extreme, this way of thinking can lead marketers to choose marketing tactics based primarily on how easy they are to measure. Not that long ago, marketers accepted as fact that they couldn't tell which half of their budget was wasted. Today, some marketers seem to believe if it can't be easily measured, it isn't worth doing.

I can understand why marketers are tempted to think this way. In an environment where proving the value of your work can mean the difference between keeping or losing your job, marketing methods that are easily measured can appear to be the safe choice.

But making measurability the main criterion for determining the value of a marketing tactic or channel is short-sighted and ultimately dangerous. It's a classic example of the McNamara Fallacy.

The McNamara Fallacy was named for Robert McNamara, the U.S. Secretary of Defense during the Vietnam War. McNamara believed that the success of the U.S. war effort in Vietnam could be measured using quantitative metrics, particularly body counts. To put it bluntly, if you consistently inflict more casualties on your enemy than your forces sustain, you will win the war.

The term McNamara Fallacy was coined by the noted social scientist Daniel Yankelovich, who described it this way:

"But when the McNamara discipline is applied too literally, the first step is to measure whatever can be easily measured. The second step is to disregard that which can't be easily measured or given a quantitative value. The third step is to presume that what can't be measured easily really isn't important. The fourth step is to say that what can't be easily measured really doesn't exist. This is suicide." -Daniel Yankelovich, "Interpreting the New Life Styles," Sales Management The Marketing Magazine (November 15, 1971).

Ironically, some of our efforts to improve marketing performance measurement can also exacerbate its dark side. Most marketers have become focused on measuring the impact of marketing activities on revenue. So, we construct multitouch attribution models to assign revenue dollars to specific marketing activities.

Measuring the performance of marketing activities that produce quick results is relatively easy. It's much harder to measure the impact of marketing activities that may not bear fruit for months or even years.

For example, the content that you create and publish this year can produce a positive impression in the mind of a potential buyer, and that impression may influence a buying process that occurs months or years in the future. Likewise, some of the sales you close this year may have been influenced by marketing programs you ran last year.

Marketing activities with long gestation periods, and those whose impacts are several steps removed from the buying decision can be difficult to measure. But, many of those activities are vitally important for marketing success. Unfortunately, our fixation on measurability can lead us to underinvest in these critical marketing activities.

The lesson for marketers is clear:  Don't gauge the value of a marketing tactic solely by how easy it is to measure.

As Albert Einstein purportedly wrote on his blackboard:  "Not everything that counts can be counted, and not everything that can be counted counts."

 Illustration courtesy of Shawn Carpenter via Flickr (CC).