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

Latest Videos

More Videos

looking for the best quality of SMM Panel ( Social Media Marketing Panel ) is a website where People Buy Social Media Services Such as Fa...

Kavin kyzal

How to manage social media during Covid-19

Read more

Thank you for sharing your knowledge. Definitely bookmarked for future reading! Check this website https://a2designlab.com/ with lots of ...

Pierce Fabreverg

Study: Gen Z are huge opportunity for brands

Read more

Thanks for sharing. You might want to check this website https://lagimcardgame.com/. An up and coming strategic card game wherein the cha...

Pierce Fabreverg

Board games distributor partners with Deliveroo in business strategy pivot

Read more

Such an important campaign, dyslexia certainly need more awareness. Amazing to see the work Code Read is doing. On the same note we are a...

Hugo

New campaign aims to build understanding around scope and impact of dyslexia

Read more

Great Job on this article! It demonstrates how much creativity, strategy and effort actually goes to produce such unique logo and brandin...

Pierce Fabreverg

Does your brand need a personality review? - Brand vision - CMO Australia

Read more

Blog Posts

Ensuring post-crisis success

The COVID-19 pandemic has exposed brands’ CX shortcomings and a lack of customer understanding. Given ongoing disruption, customer needs, wants and expectations are continually changing, also causing customers to behave in different ways. Just look at hoarding toilet paper, staple and canned food, medicinal and cleaning products.

Riccardo Pasto

senior analyst, Forrester

A few behavioural economics lesson to get your brand on top of the travel list

Understanding the core principles of Behavioural Economics will give players in the travel industry a major competitive advantage when restrictions lift and travellers begin to book again. And there are a few insights in here for the rest of the marketing community, too.

Dan Monheit

Co-founder, Hardhat

Predicting the Future: Marketing science or marketing myth?

Unicorns, the Sunken City of Atlantis, Zeus: They are very famous. So famous in fact, that we often think twice about whether they are real or not. Sometimes if we talk about something widely enough, and for long enough, even the strangest fiction can seem like fact. But ultimately it is still fiction - stories we make up and tell ourselves over and over until we believe.

Kathy Benson

Chief client officer, Ipsos

Sign in