When I first picked this book up, I didn't want to like it, even though its curious alpha--numeric front cover made me think of our own company's name. At first glance, it looked like a bunch of marketing theories, ideal for the young student (John Davis is now lecturer at Singapore Management University). After all, does anyone need to know that LTVC = [M--C] x (PxY) -- A + (AxN)] x F? (by the way, that's the formula for Lifetime Value Analysis--of course). Then it was a whimsical comment in the foreword that really hit home: 'If you are a mindless thrillseeker, then by all means go to the market without learning anything. Don't bother with medical school before becoming a doctor. How hard can neurosurgery be anyway? Davis' book is filled not with things that are nice to know, but things we ultimately must know if we are going to rise to the top of our profession. This is not the book to read for some mindless escapism. A lot of it is hard work. There are 61 different sets of formulae laid out here, each one neatly set up in terms of the data, the way to calculate it and what it means and potential challenges. And it's the 'What It Means' sections where theories become reality, and the book moves from textbook to practical primer. The author uses some of his own case studies from his time at Nike and other US companies, mixed in with a bunch of other real work examples from LVMH, WalMart, Mercedes, Hewlett--Packard, etc. The breadth of the coverage is actually pretty extraordinary. From the basics of market share and market demand principles, to media metrics and direct marketing measures, there is the practical evidence to underwrite most marketing theory. Two areas for me though stood out -- one on the theory and implementation of brand value frameworks and brand culture -- from Y&R's renowned Brand Asset Valuator to Brand Finance's excellent theories of Brand Valuation. This whole approach, while still intangible and challenging, is one of the few solid theories where marketers and agencies can actually show their value to a business, beyond pure sales. The other is the basics of valuing business -- revenue, profit, earnings per share, price--earning ratios. All the things you never learnt in school, but become essential if you want to succeed in business A recent global McKinsey study into CEOs' views of their CMOs was not flattering. While there were a few positive adjectives such as committed and creative, they were outweighed by a long list of phrases such as inconsistent, undisciplined, not accountable, expensive and faddish (ouch!). One CEO said their CMO was more like a small child than an executive. With most CEOs now looking at the ROI on everything (one can see them asking their spouses What is the ROI on our marriage?), the marketing and advertising community will have to step up. This book should help them. (Media, December 2, 2005)
