Marketing Must be Held Accountable

Ken Wong, one of North America’s leading marketing academics, recently spoke at the CMA’s 2010 National Convention in Toronto.  In his keynote, Ken made an astounding and disconcerting observation:  senior executives today don’t care about marketing.  Simple as that.  He explained that when compared to a host of other levers that contribute to the bottom line performance of their business, executives consistently rank marketing and marketing-related activities at or near the bottom of the list. 

Without mincing words, he said it's our fault.

Ken went on to say that we, as the marketing community, are to blame for the fact that the relationship between marketing expenditures (I prefer to view them as investments) and profit is, on the whole, poorly understood.  It is our fault that the link between business strategy, customer strategy and marketing activity is not clear to everyone, business executives in particular.

My experience leads me to believe that Ken is absolutely right.  As my career transitioned from the realm of corporate strategy to marketing strategy, I was very surprised to observe that the marketing line item on corporate P&Ls didn’t bear the same scrutiny as other line items.  That, often, the decisions to grow or shrink marketing budgets were often made on a whim rather than based on the same rigorous business case analysis used to evaluate manufacturing, operations, staffing and capital investment decisions.  And certainly decisions as to HOW to spend those marketing dollars have been based on fancy rather than ROI calculations more often than not.

Ken then issued a challenge:  he hopes to next year report a reversal of this concerning trend of apathy towards marketing in the Executive suite.  He proposes the creation of a strategy certification for marketers as means to get us to better connect our actions to the business strategy and ultimate financial performance of our clients/our employers.  I think that’s a great start, but we shouldn’t wait for that to happen.

As marketers, it is important we approach this discipline we’re so passionate about as just that:  a discipline.  We should begin to apply more analytical rigour when making decisions as to how we are going to invest in our customers.  Those of us on the agency side should help our clients build business cases and ROI models when we table new ideas.  We should all be able to answer a few simple questions:
1.    For every dollar spent (invested) in marketing to customers, what is the expected financial return?
2.    How will our marketing plan contribute to the overall business objectives of the firm?
3.    Does our current marketing plan optimize ROI? 
4.    If the channel mix were changed or the targeting strategy altered, how would this affect the financial return?
5.    Are my marketing investments creating a lasting customer asset that will yield ongoing returns, or is it simply a passing campaign that stops working when campaign is over?

The tactics we use to engage our customers are certainly where the rubber hits the road.  However, if we don’t ground our plans in business strategy, CFOs and CEOs won’t give us the opportunity to bring great ideas to market.  Without this discipline, I’m afraid what Ken is going to report next year.