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Marketing Accountability

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Marketing Accountability

How to Measure Marketing Effectiveness

Kogan Page,

15 min read
10 take-aways
Audio & text

What's inside?

Your company doesn’t gamble with budgeting, operations or manufacturing. Why gamble with marketing?

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Editorial Rating

7

Qualities

  • Applicable

Recommendation

Forget the past; marketing managers are now accountable for the financial and sales results they achieve with the money they spend. They can claim – with the backing of some marketing professors – that too many factors in the sales and marketing orbit are out of their control: the economy, fickle consumers, onerous competition, balky delivery problems, murky customer service, and so on. True, all of these real-life happenstances can undermine clever ads and promotions. Even so, corporate executives are no longer willing to give marketing a pass on accountability. Professor Malcolm McDonald and marketing measurement expert Peter Mouncey offer a useful solution: a layered evaluation system that firms can apply to align their marketing activities with their strategies and financial results. The authors provide metrics and tactics marketers can rely on to substantiate the impact of their work. The book is pretty technical, but its clear, two-color layout helps make its charts and graphs more accessible. getAbstract recommends it most warmly to marketers who already have some analytical expertise.

Summary

Accountability: Marketing’s Fiscal Imperative

For far too long, marketing was not fiscally accountable. That earned the field a terrible reputation among chief executives and other corporate leaders, many of whom still see marketing as primarily tactical, not strategic and, therefore, not important. Conversely, most marketers don’t understand corporate finance or shareholder value. Two professional marketing associations, the Marketing Science Institute and the Association of National Advertisers, say this must change. They urge their members to wake up and pay for the coffee.

The way corporate bosses think doesn’t help marketing prove itself. Most CEOs and CFOs focus more on budgets than on revenues, which is what marketing produces. This is an odd problem because more than 80% of a company’s value is made up of its intangibles, such as brand awareness, which marketing creates and builds. Hard-number accounting captures only tangible assets, such as equipment. To get a glimpse of the relatively meager attention that corporate leaders pay to marketing, just notice that on most profit-and-loss statements, costs are line-itemed in detail, while revenues – which come...

About the Authors

Malcolm McDonald, Emeritus Professor at Cranfield University School of Management, is an international marketing consultant. Peter Mouncey, director of the Cranfield Marketing Measurement and Accountability Forum, is a marketing education consultant.

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