Why Marketing Matters

Michael Bayler, brand marketing pioneer reviews our Connection and Conversation event ‘Why Marketing Matters” and gives his own insight into keeping the conversation going.

Lighting the fuse

We could, as our host and CEO Sophie Devonshire observed in closing the session on ‘Why Marketing Matters’, have gone on for hours. That said, a lot was crammed into this time. The two guest speakers, Enyi Nwosu, Chief Strategy Officer, UM London, and marketing expert Sara Bennison, brought refreshing and quite different perspectives to the discussion.

Enyi talked through three of UM’s key marketing pillars - Hallmarks of Quality, Connecting to Communities and Force for Good, and persuasively brought these to creative life with current campaign examples from American Express and Ikea Norway. He succinctly addressed the challenge of why and how marketing matters ‘in the culture’.

Sara’s perspective, understandable given her experience as a senior client-side marketer, as well as her current advisory activities, was more circumspect. Among her many cogent points, by far the most striking to me was: "Marketing is the creator in the income line - yet it only ever appears in the cost line.”

In the very enthusiastic breakouts, a number of themes came through. Among the younger folk, we flagged marketing’s increasing desire and ability to facilitate good in the world, along with a natural fascination with the embryonic potential of AI. For the longer-in-the-tooth participants (and here I reluctantly include myself) a sense that the beleaguered role and impact of brands and branding are perhaps making a comeback also featured.

So, a wide-ranging albeit inconclusive discussion. And how could it be otherwise? We had an hour in which to revisit a conundrum that has worried marketers for over a century, ever since John Wannamaker’s (1838-1922) still-unresolved challenge: “Half the money I spend on advertising is wasted - the trouble is I don’t know which half.”

Let’s say - no, let’s insist - that this initial session should be only the first in an ongoing and regular series of future explorations by The Marketing Society. Now more than ever before, convincing answers are urgently needed.

If this future work is to conclusively slice through the long-standing Gordian Knot of marketing’s raison d’etre, what sort of questions should we be asking ourselves?

A little history

We’ll certainly be joining a long line of eminent marketing thinkers and doers. Every single decade of the past century has featured deep analysis and outstanding insight. And so many of these remain entirely relevant today.

Wroe Alderson, an acknowledged father of modern marketing, wrote back in 1957, with commendable precision (the italics are mine): “What is needed is not an interpretation of the utility created by marketing, but a marketing interpretation of the whole process of creating utility.”

Little more than a decade later, Stephen King of JWT, another legendary powerhouse, wrote in the seminal paper “What Is A Brand?” (again, the italics are mine): “I wonder whether all top managements are involved deeply enough in the nature of their brands. Do they realise fully enough that it is from the success of brands rather than products that the profits will come?”

Mr King’s - box fresh and still unresolved - point brings us to the source of much hand-wringing. Why does nobody outside of marketing appreciate what we do? It’s being pointed out a lot lately that “marketing itself has a marketing problem”. This immediately demands a couple of pretty challenging observations.

Clarity - once and for all

First, marketing naturally matters an awful lot to marketers. But we’re neither the audience or the customer for marketing. However creative or engaging our outputs may be, and whatever the achieved metrics, it's the tangible outcomes for the business and its shareholders that are the C-suite litmus test.

Second, and more fundamental, what do we actually mean by ‘marketing’? Here I find Tim Ambler of the London Business School, a passionate brand marketer (and, importantly here, also a qualified accountant) an invaluable ally. Writing back at the turn of this century, he explains (the italics are once again mine):

“When people say ‘marketing’, they mean one of at least three things: ‘pan-company’, ‘functional’ or ‘budgetary’ marketing. The first … is what the whole firm does, not just the ‘marketers’, to secure customer preference and thereby achieve greater returns for the shareholder … Pan-company marketing is not an option but a necessity: firms engage in it whether they recognise marketing or not.

“... Functional marketing is what marketing professionals do and this varies from business to business. It limits marketing to the activities of one department.

“... The third definition sees marketing as an expenditure which means largely advertising and promotion. When people talk of the ‘return’ on marketing, this is the marketing they generally mean. But the incremental gains from advertising and promotional expenditures should be evaluated in the context of the wider meaning of marketing.”

The matter of value

All of which brings us to the door of value, where our most important ongoing considerations must surely be anchored.

The value of marketing, and how marketing in fact creates value for the firm, are two closely-linked but different enquiries. If we go along with Mr Ambler’s wider definition above, the question of ‘marketing’s value’ is not just answered, it’s in fact removed altogether: we understand it as simply ‘how the entire firm achieves revenue and growth through its interactions with the market’.

How marketing from here on goes about creating value for the firm is another big question, and one for a future discussion. But a couple of interim thoughts for now.

First, marketing’s current chronic state of uncertainty is in fact only one slice of a much larger pizza. The entire leadership team of most firms faces unprecedented decision making challenges. Has the marketing function allowed itself to become an unwitting lightning rod, for an enterprise-wide, existential problem, one that is in reality the responsibility of all departments?

Second, while the marketing function has - understandably - tended to respond to its many challenges by turning in on itself, as pointed out above we need to be unsentimental with regard to our stakeholders and our focus.

To reiterate, we are not our own customer: it’s to the hard - though by no means exclusively financial - outcomes that we must address ourselves. More broadly, this inward gaze has also compromised our attention to the market itself, whose flux of change gives direct rise to the widespread uncertainties noted above.

Here again, Tim Ambler is prescriptive: “The point is simple: if you want to know what your future cash flow will look like, investigate where it comes from - the market.”

Third, we saw above that the ‘value of marketing’ point vanishes when we frame our terms far more precisely. Similarly, the current problem of marketing’s C-suite isolation begins to correct itself, when its functional role is lifted out of the trap of just ‘spending the ad budget’.

Fourth, and on that subject, marketing’s siloed position within the business is diminished still-further when it becomes responsible only for communications. While in no way disputing their ongoing importance, no leadership team today believes that comms alone drive growth.

An emerging silver lining

In contrast to these very familiar traps, when marketers are enabled to work cross-functionally - in both directions - across the firm, they tangibly facilitate the mission-critical cycle of:

1. Capturing and interpreting emerging value signals from the market;
2. Helping the firm to respond with fresh, opportunity-led innovation;
3. Converting innovations into propositions, which combine with communications to create new market offerings;
4. Converting these propositions into compelling customer value (typically via brand-positive experiences);
5. Converting customer value into sales, respectable margins and loyalty.

If value is the primary currency of marketing, therefore, we can envision the process of converting this tricky currency back and forth, between market and firm, as forming a highly valued skill set, from the point of view of our stakeholders, as well as hopefully a useful starting hypothesis with which to proceed.

Executed well, this cycle of value does more than drive growth. It leads directly to a very happy C-suite and shareholders. Who, by the way, are likely at the end of the year to ask the marketing function, rather than “Can you do the same or more next year, but for less?”, a very different question: “What could you do next year, if your budget were increased?”

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Michael Bayler (www.bayler.com) is the founder and principal of The UNTHNKBL Academy, an advisor to marketing leadership, and an interim CMO.