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Marketing and the Bottom Line

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Marketing and the Bottom Line

The Marketing Metrics to Pump Up Cash Flow

FT Prentice Hall,

15 min read
9 take-aways
Audio & text

What's inside?

Marketing mostly focuses on message, but you have to measure the results.

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Editorial Rating

7

Qualities

  • Innovative
  • Applicable

Recommendation

This is a marketing book unlike any other marketing book. It is really written for financial officers. In fact, at one point, author Tim Ambler actually recommends turning responsibility for marketing metrics over to the finance department. That emphasis on a hard-nosed, bottom line orientation is novel and refreshing. Ambler recognizes that one of the biggest problems marketers inflict on themselves is their failure to establish and demonstrate that money spent on marketing really does matter to the financial performance of a business. With comprehensive attention to detail, he is careful to present most of the current thinking on how to measure the value of investments in marketing. Unfortunately, his style is dense, so much of what he says may take non-experts several readings to clarify. getAbstract.com is grateful that his helpful executive summary goes some way toward mitigating this problem and highly recommends his comprehensive and informative material - however, an editor as ruthless as a CFO might benefit the book’s own bottom line.

Summary

Why Marketing Should Matter to the Finance Guys

Marketing, like comic actor Rodney Dangerfield, gets no respect. It’s marketing’s own fault. Marketers have traditionally neglected to make their activities in any way understandable or valuable to the bean counters in the finance department. That is probably why marketing is a cyclical expenditure. Firms tend to plow money into marketing when they have money to burn, but when times get tough, marketing is among the first corporate expenditures to feel the budget cutter’s knife.

The job of top management is to generate and preserve wealth for the firm’s stakeholders. Unfortunately, accountants spend a great deal more time and effort measuring cash flow than measuring the sources of cash flow. For the past three decades, firms have spent enormous amounts of cash to acquire other firms. Growth by acquisition has eclipsed organic growth, the kind that comes from selling more stuff to customers.

Marketing is about generating wealth organically. Unfortunately, while it is relatively easy to measure the economic performance of an acquisition, it is notoriously difficult to measure the economic contribution of marketing...

About the Author

Tim Ambler is a Senior Fellow at the London Business School. His previous books include Marketing from Advertising to Zen, Doing Business in China and The Silk Road to International Marketing.

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