Sine Qua Non

Twitter

Follow us on Twitter »

Marketing does drive sales growth and value according to new research

Business | Sponsorship

We’ve been saying it for years but now Deutsche Bank agrees with us: which is nice. Marketing Week reports that the investment bank has released an interesting research note saying that investors need a better understanding of how marketing adds value and drives the sales performance of business. The investment community is clear how capital expenditure is used to contribute to business, but a lack of transparency and disclosure by businesses and the marketing function in financial reports and other communication means that marketing investments are not sufficiently well understood. We believe this includes everything from propositions and positioning to sponsorship strategy to marketing metrics. In fact sponsorship in particular is an area that is widely misunderstood and hence undervalued to the detriment of many businesses. And just because “we would say that” doesn’t mean to say it’s not true.

So in order to achieve this understanding, marketers need to step up to the plate to highlight the role that marketing plays in delivering growth and value in the short and long term. Deutsche Bank have helpfully provided some numbers for markets such as food and drink where analysis of 30 leading businesses over 15 years suggests that companies spending more on marketing grow sales 30% faster and profits 50% faster than their peers .

Those are great numbers, but hold on a minute. These benefits are by no means unique to consumer staples and type of companies reviewed in the report such as Nestlé, Reckitt-Benckiser, Carlsberg, Danone and Diageo. We believe they are just as likely to be true for other sectors like consumer technology and businesses such as Apple, Sony, Panasonic and Nokia. But why stop there. What makes consumer oriented businesses the only ones likely to be able to use marketing so effectively? Why are these figures not equally applicable to the business to business space?

Simply, it behoves all of us in marketing to make sure that the people with the money, whether investors on the “outside” or CFO’s and Finance Directors on the “inside”, fully understand the value that marketing brings to the table particularly with activities such as sponsorship and PR.

Comment on this Article >

Comments