In defense of marketing credibility

73% of CEOs think Marketers lack business credibility and are not the business growth generators they should be: they are still too far from being able to demonstrate how the cross-channel marketing strategies and campaigns they deploy grow their organisations’ top line in terms of more customer demand, more sales, more prospects, more conversions or more market share.

I quote the results of a month old study by the Fournaise Marketing Group, who held interviews with more than 600 large corporation and SMB CEOs and decision-makers in the US, Europe and Australia, and pointed out the disconnect between marketers and company leaders (who tend to have financial or operational backgrounds). At fault, says the study, are the marketers, because:

– they think in fuzzy terms such as brand awareness and notoriety, instead of profit and loss

– they try to increase the return on investment by cutting costs raher than focussing on impact and efficiency

– they can’t link spending to increases in business

Far be it from me to argue with 600 CEOs of the world’s most established businesses, because as a marketer myself, I’ve often been guilty of the same, but I do need to point out some things:

Not all things are equally predictable and measurable. Increasing the size of a pipe will, under certain physical conditions, most likely result in an increase of the debit of water. Those  physical conditions, as well as the underlying assumptions, are mathematically and statistically falsifiable. The data that is at the basis of the calculations is solid and proven, and not likely to change from one year to the next. Human behavior is not so easily anticipated or measured, so in order for marketers to be able to make accurate forecasts about the business increase that any given activity will bring, they need a significant amount of prior data about the target, including past records for the impact  of similar marketing activities. This becomes a thorny problem when the initiative is new, so they cannot say that “in the past, a 40% increase in online advertising budget has brought about an increase of 20% in sales, resulting in 7 dollars earned for each dollar spent”.

– Not everything has an immediate impact on the bottom line. Take the “fuzzy” brand awareness. Consumer studies (albeit subject to the unpredictability of human behavior) demonstrate that most consumers have 3 to 5 reference brands in any given category, the so called top of mind. These are the brands among which they are most likely to choose for their next purchase. Assume that prior to the advertising campaign, 20 out 100 customers had brand X in their top of mind. That means, assuming a normal distribution (and this is fuzzy, not calculated, cause I am not in a statistical mood right now), that they will choose the company’s product in 20 to 33% of the cases. In the best case scenario, 33% of the cases means approximately 6 sales. Now assume an advertising campaign whose main purpose is to drive a sales increase of 15% for product Y of Brand X. Sales in the target period go up perhaps 5%, so the marketer explains that the campaign was nevertheless a success, as there is an increase in brand awareness. Fuzzy, says the CEO, who concludes that marketing has no credibility. In the meantime, 50 out of 100 customers now have brand X in their top of mind, and choose it 20 to 33% of the time. In the best case scenario, 15 sales are made, hence an increase of 150% in sales volume as compared to the previous 6. And that’s not fuzzy at all. The trouble is, that in order to measure the effectiveness at that level, the investment in measurement has to be significantly higher which, let’s face it, many companies do not do.

– Not everything is cut and dry, meaning it is sometimes hard to trace the positive effect to marketing, and quantify the contribution that it made to the bottom line. Take opening a new store that does really well in terms of volume and profitability. How much of that is operational, staffing, the logistics, and how much is the marketing that brought people in?  And if people came in and they did not buy, how much was marketing at fault? Did they position wrong, or were the colors of the clothes simply unattractive? You can devise a measurement, of course, but it would be a convoluted relationship between the multiple inputs and the bottom line.

Where the study is indisputable is that many marketers don’t try. Some simply assume they are needed, and fail to show how they are useful.  Some don’t have the tools to prove their usefulness when there isn’t a direct relationship between input and output. Some don’t have the understanding that internal recipients of information are a target in and of themselves, and the age-old rules of messaging and understanding their needs apply.

All in all, I am not surprised that marketers are not perceived as credible. But I believe very strongly that marketing is inherently credible, and needed, and you should cut us some slack. We’re dealing with people, not numbers, and they are lot harder to manipulate .

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Filed under Communication, Consumer behavior, Management thought, Organizational behavior

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