by Peter Young
Partner, Brand Valuation Europe, Presciant
Marketing belongs in the boardroom….
There can be no doubt that marketing deserves a place in the boardroom where the major decisions are made. Boards are there to make shareholders’ money grow.
Few would disagree that marketing is an engine of business growth. Arguably it is the engine of business growth.
It is marketing that identifies human needs and wants. It is marketing that measures, anticipates and satisfies those needs and wants. It is marketing that foments innovation. It is marketing that builds revenues. It is marketing that builds profits. It is marketing that builds brand asset value. As a consequence of marketing success, companies thrive, jobs are created, and society wins.
Philip Kotler pronounced – way back when – that marketing is “…the link between society’s needs and its pattern of industrial response”.
The value created by marketing is stored in a brand. The value of a brand in the minds of customers foments trial, repeat and eventually loyalty. Humans are not loyal to products and services. Humans are loyal to brands. Brands make lots of money for shareholders.
Only marketing builds brand value—for consumers, for customers—and most important of all and most overlooked—for shareholders.
And the people who “do” marketing are us marketers. Marketing belongs in the boardroom.
In the US, only 4% of board members have any marketing experience. In the UK, it is even lower—2%.
Marketing is in trouble
From where I stand the marketing scene is not pretty and hasn’t been for a long while.
Many years ago, a scathing article by the head of research at JWT asked, “Has marketing failed, or has it never really tried?” It was David Packard, founder of HP, who said, “Marketing is too important to be left to the marketing department.” Professor Malcolm McDonald, author of famous books on marketing accountability, accused the marketing community with travelling down a “path of self-destruction” as we convince ourselves that “marketers are often wasteful, self-indulgent, innumerate and detached – deservedly lacking in influence”.
Mark Ritson, the professor and polemicist, echoed him: “…something has gone seriously wrong with the direction of marketing thought. Obsessed with the shiny distractions of digital and the soft platitudes of politically correct but commercially inane attempts at brand purpose, marketing has lost its way, its edge and its impact.”
Why? No one has defined marketing
What is marketing and what is it for? One of the most critical and least talked about issues in marketing is our failure as a community to agree on a definition of marketing – its nature and purpose.
Of course, this is absurd. Ask any marketer the question “what are you trying to achieve?” and you will get a (more or less lucid) answer.
Text books are full of answers. Academic journals have answers. Teachers have answers. And so on and so on. UK’s CIM says it’s all about profit. AMA says it’s all about value. Others say it’s about customer relationships. Current fashion in academia says it’s about Service Dominant Logic – whatever that may mean. Hundreds of definitions and no agreement.
Defining marketing really matters
This definitional stuff may seem to be of merely academic interest.
But it’s not. It has important practical consequences. And it is at the heart of most of the frustrations and rejections we marketers all face on a day to day basis.
If we don’t know where we are going how on earth can we expect to get there? As long as we marketers cannot agree on our shared purpose, we are in danger of perpetuating the stultifying deafness of others to our pleas for understanding, respect and support.
A possible definition of marketing
Clues to a meaningful definition can be found by marketers in the companies best at marketing.
In companies, such as P&G – if you ask a marketer “what are you trying to achieve?” you get one uniform reply “I am managing a brand – for money.” Marc Pritchard, P&G’s CMO said recently “We build brands that create value for consumers, customers and shareholders.” I think that’s a great definition.
Now that might catch the attention of the boardroom. It’s all about a brand and making money. Marketing is not an end in itself but a means to an end of fundamental importance to company boards.
Marketing is a toolkit for creating value which is stored in a brand. The job of marketing is to build brands. In the real world of balance sheets, P&Ls, and share prices, that means building brands with financial value. It means building brands that create financial value for their owners—the shareholders.
The job of marketers is to build brand value
Brand value can be identified, measured, and grown. Marketers are the people who do it.
Brand value (often $ billions) isn’t built by luck. Nike wasn’t built by accountants. Netflix wasn’t created by financial analysts. Google wasn’t made a global brand by engineers. Innovation isn’t what built Apple.
Brand value is created step by step, campaign by campaign, impact by impact, transaction by transaction, over time. And the value is built over time for time. Brand value is durable and sustainable.
So, what is wrong with us?
Why are marketers not recognized for the value they create?
Ask a marketer “what are you doing” and the probable reply is “I am marketing”. Or “I am satisfying customers” Or “I am selling!” Or “doing advertising”. Or “managing relationships”.
Which CMO replies “I’m building valuable brands to make a sackful of money for shareholders.”?
Time to stand tall
It’s time for marketers to speak out and claim their due. We must build, brag, and tell the board about the value of what we do. In the language they understand – the language of money.
This is how we must act to get marketing’s vital contribution recognized, and respect created for the profession. We must demonstrate that we create financial value for shareholders, for society, and ourselves. And tell them about it in the boardroom.