Once again there seems to be a rise in the discussion of marketing as a bottom-line cost versus an organizational investment. You can imagine where McKnight Kurland falls on this spectrum. Forbes recently posted an article about this, under the title of: “Why ‘Is It In The Budget?’ Is The Wrong Question”
It made a case for flipping the current norm—i.e. “don’t spend money because it is in the budget, or you spent it last year, or someone has left and you need to replace them. Spend money if, and only if, it works as an investment.” That of course means a smart spend. And that my friend, leads to the $64,000 question: “On what?”
Fortunately, we (and McKinsey & Company) have an answer. I recently read a post from McKinsey about this very subject and was struck by how perfectly aligned it is with our marketing philosophy. The highlights are:
Better Marketing Return on Investment (MROI)
First: Understand The Challenges of Marketing
Marketers face many challenges today, including high growth expectations, cutthroat competition, and the digital and social-media revolution. Embracing MROI as a discipline can help build strong brands that generate improved returns.
McKinsey Core Beliefs
- Better MROI starts with better objectives that are based in the consumer decision journey (CDJ). Better marketing objectives, in turn, shape better metrics.
- Brand messaging is one of the most important determinants of MROI success. It is more important to be clear on the most effective messaging attributes for the given brand objective than it is to have a precisely optimized marketing mix.
- Marketing-mix analytics that don’t make sense to the end business user are useless. Marketing-mix models should be informed by industry knowledge, built with transparent assumptions, and delivered in a way that makes sense intuitively to the business user.
- Marketing-investment decisions need to factor in both short- and long-term impact. Marketing mix models, for example, can capture only short-term impact and must be augmented with long-term (brand-building) impact estimates.
- Future potential is a critical input. Spend should be biased toward future growth, and not just optimized based on past performance.
McKnight Kurland’s core beliefs and our approach to marketing opportunities and challenges mirror these points exactly. We always talk with our clients and prospects at length about what the goals and objectives are for any undertaking, so that there is an agreement on expectations of success and measures of effectiveness—whether soft or hard. And then there’s brand messaging. This seems to be where most organizations need the most help (I was going to say fail, but that seemed cruel). A focused and segmented approach—with the invaluable outside-in perspective—is key to the long-term success of any brand. Say what needs to be said to your audiences in clear and concise and humanistic language. You want them to connect with your brand, trust you, believe you, remember you, choose you, come back to you. It’s your first date—sometimes over and over again. If your objective(s) is well-defined, your messaging must be also.
Marketing mix strategies and long- and near-term planning seem like no-brainers. But many organizations are so caught up in quarterly or annual revenue/growth goals that their focus on brand-building takes a back seat. But remember, brand awareness is what puts you in the considered set when the need arises. And though awareness is harder (costlier) to measure, it plays a key role—without it, you may as well just sell on price.
So do we stand behind the statement that marketing is an investment? You bet. Is it a cost on the bottom line? Obviously. Can that cost pay off and add value to the financial success of an organization? Definitely—when done well.Share: