Marketing’s biggest secret is that it’s all about the money. Some things are about awards, creativity, beauty, or buzz â€“ but marketing isn’t one of these things. Marketing is a business function and like all other business functions, marketing exists to make that “dolla.”
To illustrate the absurd exceptions many smart people make for marketing, please allow me to share a hypothetical situation:
Imagine you are on the board of a company that sells widgets. It is time for your annual meeting and you, along with the rest of the board members and senior officers of the company, sit in a large conference room at a nice hotel. You have just finished lunch, it was delicious, and you are just settling back into a comfy leather chair to listen to the company’s CFO talk about last year’s financials. With the aid of a beautiful looking PowerPoint the CFO proceeds to explain metrics like the hypothetical future value, bank opinion index, and economic buzz forecast. He also mentions the two awards the company won: Most Creative Use of Money (from an industry magazine) and Most Innovative Investment Portfolio (from an industry group you pay to be a member of). He then concludes that all of these things resulted in a successful year because the firm turned a profit of X amount.
While everyone stares, mesmerized by the sheer beauty and grandeur of the presentation, you realize that your CFO has not actually told you anything useful. Hesitantly you clear your throat and say, “Mr. CFO, do you expect us to buy into these meaningless metrics? How do they explain anything?” To which Mr. CFO responds, “We clearly made a profit last year, so we can correlate the good performance of these metrics with the good performance of the entire company.” Puzzled, you stare back at your CFO and wonder if he has lost his mind.
Again, imagine this happening to you. What would you do? How would you react? Finance and accounting are hard business. This means that they are regulated by rules and regulations. There is no room for fluff. The financial data of publicly traded companies are subject to government oversight. A CFO that constructed and reported his or her own meaningless metrics would probably get fired and possibly arrested. Jeff Skilling of Enron fame, for example, instituted a practice called mark-to-market accounting; a practice that was legal and useful in other aspects of finance, but not for the financial statements of publicly traded companies. This practice allowed Enron execs to essentially take an educated guess as to how much money a particular venture might make and report it as profit. Enron statements showed great profits even thought the company was losing money. Skilling borrowed a metric from another aspect of the financial world, and did a lot of other bad things, and it ended up ruining a lot of lives. Some aspects of business cannot make up metrics and report made up stuff in order to show good performance.
Have you ever thought about marketing that way? If not, why? Marketing is vital to the success of your company, unless you posses telepathic powers and have the ability to influence people’s thoughts with your mind. Marketing is important because it puts your message out there so that people know about you and want to buy what you are selling. Marketing positions and brands your product to make it appealing to a specific target market. Marketing is responsible for the creation of the customer facing part of your company. Marketing professionals and officers need to be held to a higher standard of accountability, perhaps to the level of other hard business functions.
Going back to the example I shared earlier â€“ replace the CFO with a CMO. Is anything different? Perhaps the nebulous metrics and weak correlations are more understandable. I don’t think they should be. I think that marketing should be able to produce verifiable metrics that are strongly correlated to success or failure. Marketing should be able to show ROI.
If you are a corporate officer, business owner, professional or just someone that is into marketing â€“ take a good look at your marketing efforts. Do you think you could start to calculate ROI? Do you hold marketing to the same levels of accountability as other hard business functions like accounting or operations? Marketing results do not happen magically and they can be explained by real metrics, not made up ones.