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 newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments

Blog Posts

Will our manners go the same way as texting when robotic servants take over?

Much of the talk in the industry is focused on the limited amount of time that screens have left in our lives.

Katja Forbes

Founder and chief, sfyte

Social purpose: Oxygen for your brand health vitals

If trust is the new currency, then we’re in deep trouble. Here's why.

Carolyn Butler-Madden

Founder and CEO, Sunday Lunch

Customer experience disruption: Healthcare faces a bitter pill

Over the past decade, disruptors such as Amazon, Apple and Australia’s Atlassian have delivered technology enhanced customer experiences, which for the most part, have improved customers’ lives and delivered unparalleled growth. Can they do the same for healthcare?

Alex Allwood

Principal, All Work Together

Does Magento have any progressive web apps?

libertylady

​Adobe aims to compete with the big guns in digital commerce

Read more

According to the executive manager for commercial and marketing within the Events Melbourne team, Lucan Creamer, the City’s vision for th...

Armstrongsmith

Melbourne Fashion Week: Using digital and insight to drive engagement and attendance

Read more

The key difference is designers no longer have to spend all their time translating their ideas into digital models, which is the grunt wo...

Armstrongsmith

What automated design is going to do to 3D printing and product customisation

Read more

The four financial-oriented metrics employed are return on marketing investment; revenue per customer; marketing expenditure versus budge...

Armstrongsmith

Report: Accountability key to marketing's influence in business

Read more

When you cooperate with leading brands you have the upper hand. For example, I have been using help of the Best Reviewer for long now and...

Birdie Wyatt

CMO interview: How BBC Worldwide's marketing lead builds brand purpose and growth

Read more

Latest Podcast

More podcasts

Sign in