Is marketing a less reliable practice than finance?

by Nigel Hollis | November 14, 2016

As a panelist at Effectiveness Week in the UK the other week, I got to hear Patrick Barwise review some findings from his book, ’The 12 powers of a marketing leader : how to succeed by building customer and company value’. Barwise asserted that marketing sounds less reliable than other business practices because it mostly deals with the future. But is marketing inherently less reliable than finance?

Barwise made the assertion that marketing sounds less reliable than other business practices when addressing what he identified as one of the gaps that marketers needed to bridge in order to be effective. He suggested that other business disciplines like production, logistics and finance deal with more predictable and measurable outcomes, and so tend to be seen as more reliable. By comparison marketing deals with the future, and so is perceived by colleagues and senior management as inherently less reliable.

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At the time I have to admit that I nodded in agreement, but later in the week I was given pause for thought. Asked what he thought of the idea that marketing was less reliable than finance because it was forward-looking rather than backward-looking, Martin Glenn, now CEO of the Football Association and previously CEO of United Biscuits,  disagreed. Finance, he suggested, was often asked to make huge investments based on an analysis of likely future returns.

This is, of course, absolutely true. Part of the job of finance is to judge the risk and reward attached to capital investments that have a lifetime of years, not months. Budgeting involves the assessment of the state of the business across the coming year or more. Maybe the difference is that there are generally accepted practices and procedures by which these functions are made more transparent? The actual analysis might be no more than wishful thinking – did I say that? – but the analytic process and presentation makes the practice look more reliable?

Every year I hear marketers being encouraged to speak the language of finance if they want to be taken seriously. But if we really want to bridge the trust gap maybe what we need is less words and more numbers, numbers that relate to specific marketing objectives? We have many different ways of assessing the likely impact of marketing campaigns, both in the short-term and the long-term; but what is often missing is a very clear statement of what a campaign is intended to achieve. In other words, how will the campaign help the brand realize more value?

If you didn’t attend any of the Effectiveness Week events, you can read some articles based on the Kantar presentations written by my colleagues Graham Page, Izzy Pugh and one by myself here. But what do you think? Is objective setting the real issue or is it something else? Please share your thoughts.

4 comments

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  1. Neha Joshi, January 20, 2017

    Yes Nigel. Right. ! Agreed. .

    There is a thin line of boundry between branding , comparing and fianance one need to overcome with decision making. You know, one should consider business portals like IndiaBizClub for web promotion . Then one can look out for optimistic finance solution. So here is how you start

  2. Nigel, November 28, 2016

    Thanks for the comments.

    Stewart, I do think the problem is that marketing does not have an agreed framework and taxonomy. Part of the issue seems to be an unwillingness to admit that brands in one industry behave like those in another and yet the people buying those brands are the same. The balance between intuitive decisions and deliberative may vary but very similar motivations prevail across industries. 

  3. Stewart, November 19, 2016

    Nigel and Reema

    Your points are important. A debate would be informative.

    Marketing today has more data than anyone else.  The problem is the obsession with short-term programmatic and attribution, both designed to maximize agency profit not client value.  Client marketing must break the silos, take control of data and embed analytics into decision-making and innovation.  Then marketing can become predictive and actionable in the long-term.

    Next, Marketing can create a common taxonomy and framework with Finance, in parallel with Manufacturing, Operations and Logistics. The common science here is decision-making under uncertainty. Marketing has inherent uncertainty because it deals with human beings and their behaviors, but manufacturing has similar uncertainties, for example the future price of commodities and labor costs globally.

    The challenge as always is organizational and cultural, not technical.

    Stewart  

  4. Reema , November 15, 2016
    I think many organisations have moved towards making marketing campaigns more quantifiable so I am not sure if that's the real problem. It might be the association of glamour with the marketing/ad industry which is lacking in any other function across organisations. This might stem from popular media like Mad Men or other shows/movies, etc. That has shaped these perceptions over time... it's hard to take such a glamourous (or so other people think) function seriously! I think entertainment, film industries around the world have the same issue... I am sure they put a lot of rigour in their estimates but at the end of the day the perception that is associated with them dominates... 

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