A lot is being written these days on how to justify Marketing expenses in this difficult economy. Advice comes from many quarters on the dos and don’ts of what you should promise or where you should look to make sure that your Marketing expenses are kept at an appropriate level in these tough times and that you can deliver on those expenses. No matter the advice, it is all wrong.
Why? Simple. It presumes Marketing is an expense. That’s where the thinking goes awry. Expenses should always be minimized in every legal way possible. So if Marketing is truly an expense, let’s drive it to zero as soon as possible. But, the flaw in that argument is that Marketing is an expense. If it is not an expense, then what is it the financially-oriented among you may be wondering?
Well, what is R&D? Most companies describe R&D as an investment. In some cases it can even be placed on the balance sheet as an asset, but even when it can’t, it is still considered by many to be an investment. Perhaps that is why a recent study by the Industrial Research Institute found that half the companies in their survey planned to increase R&D this year, while half expected to cut it, leaving the net at about even. The justification for increasing R&D is that the companies want to be ready when the customer starts buying again.
If Marketing was viewed as an investment rather than as an expense, the same argument could well be made for Marketing, and many companies would be increasing their Marketing investment rather than discussing how to reduce Marketing expense.
As a profession, Marketers have laughed at the old saw that “Half the money I spend on advertising is wasted, and if I knew which half I would quit spending it.” Two problems with that old saw: 1. It equates Marketing to Advertising which is so limiting in terms of the contribution that a true Marketing investment could make as to be beyond unfortunate; 2. It includes the word “spend” rather than invest. Much of the money companies invest in R&D is wasted in that the results are not what were expected, but value is still achieved.
For Marketing to become an investment its true value and purpose must be exercised and practitioners, whether at the Strategic Marketing end or the Marketing Communications end, must focus on making appropriate investments in what they do rather than trying to justify a “spend.” What are your business goals and what investment do you need to make in all aspects of Marketing to achieve those goals?