Report: Accountability key to marketing's influence in business

New research out of Macquarie University finds marketing teams who develop data analytics and financial performance capabilities are more likely to gain influence inside businesses

Dr Hume Winzar
Dr Hume Winzar

Marketing leaders who show accountability in terms of performance, market share and effectiveness of marketing programs are more likely to be trusted and gain influence with their executive counterparts.

That’s the finding of new research undertaken at Macquarie University into how marketing departments can improve their strategic position within organisations, as well as what key metrics they need to possess to win the hearts and minds of more financially-driven executives.

The PhD research, which has just been submitted, was based on market research undertaken in two phases by PhD student, Adam Gaskill, and overseen by Dr Hume Winzar (pictured), marketing professor in the university’s Faculty of Business and Economic. Their objective was to understand marketing’s accountability in the eyes of finance leaders in particular, and the extent to which certain metrics contribute to marketing’s position of influence.

The first stage of the research was a qualitative survey of dozens of senior finance leaders from large technology companies mainly in Australia, to find out how these executives understand marketing’s role, as well as measure it.

The research found eight common ways financial teams seek to understand marketing, four of which are tied to financial outcomes, and four of which relate to long-term impact. According to Dr Winzar, a surprising result was that profitability wasn’t a core metric in how financial executives rate marketing’s role.

“Finance people know things like communications, distribution and design are not the responsibility of one organisational group... and to hold marketing accountable for profitability alone is plain silly,” he told CMO.

The four financial-oriented metrics employed are return on marketing investment; revenue per customer; marketing expenditure versus budget; and marketing expenditure as a percentage of revenue. Each of these are ‘after the fact’ measures but vital in getting support for marketing, Dr Winzar commented.

Four non-financial measures considered equally important are brand awareness, both prompted and unprompted; market share in terms of volume and value; website traffic and particularly unique visitor statistics; and customer acquisition and churn.

“Financial executives recognise that some marketing activities don’t have immediate returns and need long-term investment,” Dr Winzar said.

Across the board, just over half of those surveyed said they are getting these results from marketing teams, while the other half were seeing these figures but in varying degrees of quality.

“What we also found was that marketers who delivered good results – not necessarily favourable ones, but honest and straightforward results – gained more support from all different functions across the business, gained approval for any new projects more quickly, and secured resources such as people, funding and so on,” Dr Winzar said.

Related: 5 ways CMOs can get their CFO on-side

The second phase of the research project surveyed senior financial officers from more than 200 companies to determine what metrics should be used to gauge marketing’s contribution, and their importance. Of the respondents, about 60 per cent were services-led businesses and about two-thirds were B2B organisations.

According to the research, marketing accountability is the antecedent of marketing’s influence on strategic business decisions and thinking within organisations.

The five key metrics marketing professionals should be using to demonstrate their accountability are performance ratios, such as return on marketing investment and sales growth; cost controls, including operating within agreed expenditure targets; actual versus planned performance of marketing programs; market share, both revenue and volume; and marketing campaign effectiveness, or achieving non-financial objectives of marketing campaigns.

To be able to deliver these and build accountability with financial teams, the marketing function should develop capabilities in data analysis, financial planning and financial analysis.

Dr Winzar claimed these metrics and capabilities will allow marketing departments to demonstrate their accountability through linking their activities to organisational outcomes.

“The people whose job is to do marketing need to be more accountable and that means metrics, at least where financial-oriented executives are concerned,” he said.

The good news is “more than half of the respondents to the second survey had a good relationship and were getting what they wanted”, Dr Winzar added.

Follow CMO on Twitter: @CMOAustralia, take part in the CMO Australia conversation on LinkedIn: CMO Australia, or join us on Facebook: https://www.facebook.com/CMOAustralia

Signup to CMO’s new email newsletter to receive your weekly dose of targeted content for the modern marketing chief.

Join the CMO newsletter!

Error: Please check your email address.
Show Comments

Supporting Association

Blog Posts

The real asset of small data – getting granular unearths opportunities

When most marketers use the word ‘data’, what springs to mind are large sets of numbers, Excel spreadsheets, cloud-based IT systems and complicated algorithms. Big data speak is the mot du jour. There is even a big data Week in London called the Festival of Data.

Pip Stocks

CEO and founder, BrandHook

Digital Transformation challenges for CMOs

New problems are rarely fixed by applying old thinking. In the last decade, a combination of circumstances has evolved that requires new thinking from marketers. This new thinking takes advantage of the digital environment and transforms business as we know it.

Mark Cameron

CEO, Working Three

Why innovation requires less certainty and more ambiguity

According to the Knowledge Doubling Theory, the sum total of human knowledge doubles every 12-13 months. With the full evolution of the Internet of Things, it will eventually double every 12 hours. Faced with such a sea of shifting data and knowledge, how can we make progress if we try to nail everything down to a certainty?

Matt Whale

Managing director, How To Impact

Need to improve your customer journey? We're excited to announce that we are holding that we are holding two more sessions of our sellout...

Proto Partners

Customer journeys: The new differentiation battlefield - Customer insights - CMO Australia

Read more

Thanks Mark. A third of customers leave brands after one negative experience, thats why it is ever so important that we optimise EVERY in...

Proto Partners

Customer journeys: The new differentiation battlefield - Customer insights - CMO Australia

Read more

Hi Kyle -- great piece. I couldn't agree with you more when you say that we as marketers are in the business of choice. I actually wrot...

Matthew Willcox

Tapping behavioural science for consumer influence

Read more

Great points. When it comes to optimizing the app experience, making sure you collect rich usage data is important, but making sure you c...

Dustin Amrhein

Why app engagement must be personalised - Mobile strategy - CMO Australia

Read more

You can also use automation to help keep the contact database nice and tidy. For example, programs that check and fix database values (eg...

automatico

3 brands using marketing automation for more than just email

Read more

Latest Podcast

More podcasts

Sign in