Why is marketing so often considered an expense rather than an investment by company directors? Do boards have the requisite skills to enable marketing to become central to their businesses’ strategies? And what should directors individually and collectively do to ensure marketing is strategic, not tactical, and contributes long-term value?
These, and other big questions, are triggered by a new study which analyses research to provide evidence of marketing’s contribution to profitability and brand building. Marketing Multiplied is published by Core Media, in association with the Association of Advertisers in Ireland. It should drive change in how directors perceive marketing – and how marketers communicate the value of marketing as a driver of business performance.
The study busts myths and accepted norms about a discipline that has suffered from a perception that it is too much about art and not enough about science. In the past 10 years, for instance, the study notes that the volume of short-term campaigns as tracked by the IPA, the global advertising body, has quadrupled. This is despite compelling evidence that long-term strategic campaigns are three times more effective in growing market share ratios.
Another theme is how little weight marketing carries at either board or CEO level. In designing the curriculum for the Chartered Director Programme, the Institute of Directors blended business strategy and marketing into the same module, as marketing’s perspective of “customer centricity” underpins good business strategy.
However, that principle is not applied in most boards. Just 2.6% of the 65,000 board members of S&P 1500 companies in 2015 had managerial level marketing experience, according to a study from Virginia's Darden School of Business. Marketing is a discipline with a high female quota, providing a pipeline for boards conscious of gender balance. Yet marketers are not in demand in the boardroom.
Many directors and even some academics argue that marketing should not be given airtime in the boardroom as it is fundamentally about tactics and not strategy. This argument cuts to the heart of the misunderstanding about marketing strategy and this is exactly the thinking that this study can challenge with solid evidence.
Patrick Coveney, CEO of Greencore plc and Chairman of Core Media, is in no doubt that boards need more marketers. Typically, he says, boards are dominated by people with “financial or engineering backgrounds who are not necessarily trained to understand the consumer, the competitor landscape and external environment in a way that a skilled marketer can.”
Arguably, though, marketers have not made themselves obvious candidates for board roles by not communicating marketing’s strategic value and/or by not producing robust data on financial returns. Marketers can often focus on their latest campaigns, simplistic metrics and jargon, even hyperbole, which serve to disconnect them from their boards.
This needs to change. Operationally, marketers are playing an increasingly critical role in planning the future of their businesses. Senior marketers are being charged with responsibilities for all or some of their companies’ digital transformation agendas. For certain sectors, this could well dictate the very survival of those businesses in the next three to five years, such is the pace of digital disruption.
What can directors do?
Directors who want to create value for their businesses need to take marketing seriously. What to do? Here are some suggestions:
- Familiarise yourself with where marketing can add strategic value to your business
- Align strategic marketing objectives with your business objectives
- Ensure the board pack includes marketing KPIs that are meaningful
- Ask the right questions at board meetings -- less about individual campaigns and more about customer requirements, the competitive landscape, your business’s capabilities and strategies
- Avoid short-termism and knee-jerk reactions to potential risks, such as cutting marketing budgets or shifting focus as they could potentially damage long-term brand building goals
- Consider the skills balance within your board
Aileen O’Toole is a Chartered Director and a Digital Strategist. She is a board member of the Road Safety Authority and of Business in the Community. A co-founder of The Sunday Business Post newspaper, she is a fellow of the Marketing Institute of Ireland. Aileen can be contacted via her email address; firstname.lastname@example.org, through her website; www.aileenotoole.ie, or at her linkedin profile.
The views expressed in the posts and comments of this blog do not necessarily reflect the views of the Institute of Directors in Ireland. They should be understood as the personal opinions of the author. The content of this blog is for information purposes only and the Institute of Directors in Ireland is not responsible for the accuracy of any of the information supplied.