Marketing Resolution: Brian McIntosh, Hitachi Consulting
The New Year is here and with overall economic growth predicted to be less than 4 percent (measured as GDP), according to Goldman Sachs economists, lean marketing budgets will continue to be a trend for consumer goods marketers. While a return to focusing on growth will take on added importance as the economy improves, the visionary chief marketing officer (CMO) understands the paradigms established during the challenging economic period of the last few years (i.e. accountability, governance and ROI) will continue to dominate.The latest recession has created a new model for marketing built on driving top-line growth and cutting bottom-line costs. Marketers must be able to manage marketing spend, show a return on investment while driving brand preference, and generate new revenue to help their companies succeed.
The first step toward improving marketing ROI is to shift the focus from cost to investment. Marketing has traditionally been considered a cost center. In fact, the Financial Accounting Standards Board (FASB) has declared marketing an expense for accounting purposes. This, however, should not prevent marketers from managing the budget as an investment.
Investments must be managed with an investor's hat on, which always means maximizing the return on that investment. The problem is most CMOs don't have an accurate, reliable handle on their investments because of:
- A lack of tools/skills to analyze marketing budgets and activities
- Inefficient marketing processes; inconsistent execution
- The inability to reconcile marketing spend in real time to improve decision making
Smart marketers are employing a central marketing system called Marketing Resources Management (MRM). MRM is a set of automated processes and technology capabilities that enhance a company's ability to orchestrate and optimize marketing. With an MRM tool in place, consumer goods companies are able to:
- Improve planning, budgeting and execution of marketing programs
- Provide greater alignment of marketing spend to corporate objectives and increase visibility into approved, committed and actual spend across programs and channels
- Enhance planning and allocating the marketing budget across geographies, business units, products and targets
The MRM's financial component serves as the central repository for all marketing budget information, which provides CMOs with the ability to view and manage marketing spend activities across media channels, brands and geographies as well as aggregate them into one view. This enhanced visibility into marketing investments enables better measurement of the return. Leading companies that invest in MRM solutions get the data they need to achieve the following:
- Annual cost savings and productivity gains from the improved ability to track, view, report and aggregate multiple marketing financial plans and commitments
- Revenue uplift from the ability to proactively shift marketing spend to higher returning campaigns
Through this integration of people, process and technologies, consumer goods marketers can greatly improve marketing spend management and drive top-line growth. In the end, it's about taking control of marketing spend to close the "knowing versus doing gap" by converting data into action.