Econometrics: Sorrell Says "Yes." Porter Says "Whaaa?"

Today's Wall Street Journal (you'll need a subscription or pick up a hard copy of the real thing) has an interesting article on "econometrics" and its impact on the ad industry. Here are the highlights:

"There is no doubt in my mind that scientific analysis, including econometrics, is one of the most important areas in the marketing services industry," Sir Martin [Sorrell] says in an interview.

Econometrics uses statistical analysis to measure the relationship between different sets of events...To determine an advertisement's effectiveness, econometricians write an equation to measure the effect on sales of different factors, including the weather, price cuts, and advertising. For the advertiser, the purpose is to help decide which ads to run.

Sharing the stage with Sir Martin 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.

Basically, as clients face tougher and tougher competition, they're trying to justify every nickel they spend, so there's room for statistics nerds to come in and prove the ROI of ad campaigns. And as better technology lets us measure the impact of ads, the more power the statistics nerds will have. But creativity is always the X factor that can't be quantified.