Drowning in Metrics: How Managers Select and Trade-off Metrics for Making Marketing Budgetary Decisions

Abstract

Despite the proliferation of big data and quantitative information available for marketing decisions, surprisingly, we know little about which metrics marketers use for their decisions or how marketers make trade-offs between such metrics. To overcome this gap, we first propose a model based on over 200 interviews conducted and a multi-disciplinary literature review of managerial metric preferences. Second, we obtain responses from 563 managers with authority on over $1 million marketing budgets who selected metrics to include in 1,126 idealized build-your-own (BYO) conjoint choice marketing budget dashboards, and rank-ordered these metrics for 2,252 decision tasks. Finally, we estimate managers’ preferences by proposing a random utility model that combines the BYO choice and ranking tasks to correct for selection effects. We find systematic differences in metric utility based on type of marketing decision and detect substantial heterogeneity in preferences among managers. From this, we develop an understanding of contextual drivers of preferences for metric use, offering several important managerial takeaways.