We’re living in an age of unprecedented change. We experience with Oculus Rift, invest with Acorns, consume video through Hyper, tune into Pandora and navigate with Waze.
A new study from the Australian Marketing Institute (AMI) and consulting giant Deloitte, claims marketers need to work harder to speak the language of the board if they’re to get their organisations to truly appreciate marketing’s strategic role.
According to the paper, Marketing’s Role in the Boardroom: An Evaluation Framework for Boards and Directors, Australian company boards have been asking the wrong questions of marketers and would benefit from a better understanding of the critical role marketing plays in business strategy development and execution.
To help achieve this perception shift, the AMI and Deloitte set out a 10-step marketing evaluation framework covering previous period and future performance:
- Identify marketing assets
- Identify the metrics being used to measure the health and performance of each marketing asset
- Identify changes to these existing metrics (such as evolving marketing dynamics, competitor actions) and the factors influencing these changes
- Assess the value added by marketing in the previous period
- Identify significant market issues, opportunities and risks and how they will be managed
- Assess whether the current marketing plan adequately takes advantage of opportunities available, relative to other feasible alternatives
- Evaluate period performance, based on planning marketing investment
- Understand potential competitive reactions and environmental uncertainties and develop contingency plans to mitigate their effects
- Assess whether the proposed level of investment in marketing assets is appropriate to realising strategic plans
- Develop metrics for monitoring performance in terms of application of resources (inputs), performance (outputs) and marketing efficiency (conversion).
“There has been lots of attention paid to the importance of big data in shaping and executing business strategy, and better knowledge of marketing is emerging as a critical board need,” AMI CEO, Mark Crowe said.
“Deloitte’s research indicates that feedback about execution of strategy is being provided to boards more frequently than before – as often as once per month – which is a promising development. However the benefit of this additional insight is negated by many boards’ widespread lack of exposure to marketing strategy and knowledge of how marketing works. It’s also holding boards back from fully embracing the marketing discipline at the top table.”
Deloitte partner and CMO, David Redhill, pointed out the company’s recent board effectiveness research with chairs and CEOs of the ASX top 200 companies indicated many Australian businesses in all sectors are reacting slowly to digitally disruptive change and that those most profoundly impacted are the ones that know their customers the least. The ones succeeding are building their knowledge of their customers, deriving insights from their markets and improving their marketing effectiveness and audience engagement through ongoing data interpretation.
“Marketing needs to play a critical role in stepping up and showing the board what’s possible,” Redhill added. “To harmonise a coherent long-term business strategy with the need for short-term agility, the visions of both board and marketing need to be aligned.”
The paper’s primary contributor was professional or marketing in the Research School of Management at the ANU professor of marketing of London Business School, John Roberts.