A Radical Idea on How to Budget for Marketing
I went to a fascinating conference a few weeks ago of a group called the Marketing Accountability Standards Board (MASB). It’s mission, viewable on its site, is to “establish marketing measurement and accountability standards across industry and domain for continuous improvement in financial performance and for the guidance and education of business decision makers and users of performance and financial information….The role of MASB is in setting the standards and processes necessary for evaluating marketing measurement in a manner that insures credibility, validity, transparency and understanding.”
In other words, its members believe that if there were marketing metrics that could translate marketing activities into income, marketing would be more respected and seen more strategically within a given organization.
One topic discussed caught my ear, a proposal that marketing should be accounted for in the same way capital expenditures are, essentially built into budgets over a multi-year period. If that happened, marketing could be moved off the annual expense budget merry-go-round that often finds marketing as the first cut in tough times.
Getting corporate America and the accounting governing body (the Financial Accounting Standards Board or FASB) to change how marketing expenditures are recorded on corporate books is an immense challenge, but it’s an idea worth exploring. It gets to the nub of what is the true value of marketing programs and campaigns and how can those be translated into bottom line dollars and cents.
I’m hoping this idea gets more discussion in more forums, let me know what you think and contact MASB to find out more about next steps in its efforts on this and its many other projects.
Comments
This is a radical idea and quite challenging. When all is said and done, however, it will be viewed as the "game changer" we needed to move from discretionary business expense to board-level strategic investment.
Posted by: Meg Blair | April 8, 2010 9:34 AM
It is within our grasp to change the way management values the brand. It is time for all communicators to help make this transition. We have the research and models that identify how the brand impacts the financial performance of a corporation. When the CEO and CFO are presented with the facts they become the biggest advocates for spending more on brand communications. This is revolutionary!
Posted by: Jim Gregory | April 14, 2010 8:55 AM