Why marketing still matters
In these tough economic times, we all know that cuts are inevitable. But where the axe falls – and how this impacts on public and private sector companies – is still up for debate.
Steve Porter, Sage Accountants Division
Marketing…an easy cut to make?
All too often marketing departments are the first to go, as bosses fail to appreciate their value and look for quick, supposedly efficient ways, to make savings. The Central Office of Information (COI) and the BBC are just two of the big names already slashing budgets in an attempt to weather the recession.
Last month, the Coalition government announced plans to halve the CIO’s spending power and abolish its £75 million flagship anti-obesity campaign, Change4Life, in a move that cost 287 jobs.
The BBC have taken a similar approach – reducing the corporation’s marketing spend by 25 per cent this year, with a further 25 per cent fall planned between now and 2013.
As the Coalition continues its comprehensive review, in lieu of next month’s formal report, it’s clear there is much, much more of the same ahead. So what do such savage cuts tell us about the way bosses view marketing? Do they fully understand the role good staff and effective strategies play – and the growth revenue they can create to help trade firms out of recession? If not, how can we make sure they do?
Understanding the value of marketing
Marketing expert, Mark Choueke, is someone giving the issue a great deal of thought. He says public and private sector bosses are underestimating the vital work these teams do – and sacrificing potentially valuable staff, in a damaging exercise in false economy. Now he is urging chief executives to take another look at their communications teams and consider how they can move forward together.
As Mark, a commentator for industry magazine, Marketing Week, says: “There is little understanding of how effective marketing is linked to growth in demand for products and services, or how marketing can represent value-creation for a company.
“If your customer base seems to be coming with you on your journey towards growth, does it matter that others – the City, the politicians, the markets – don’t understand the power of marketing to transform a business and achieve its objectives?
“I would argue that it does. The perceived value of your companies, the perceived value of your work, and most importantly, the perceived value of you and your skills, depends on it.”
As he argues, effective, sustained marketing really does pay off.
Expanding marketing output
Giant, global brands like Colgate Palmolive and Apple have continued to develop their brands and create record profits by valuing and expanding their marketing output. Their investment helped Colgate – which owns the toothpaste as well as Ajax cleaning products – make a staggering £2 billion last year.
For their part, Apple saw record growth across all their markets – with Mac sales up by nine per cent, iPhone by 88 per cent and iPods by three per cent – helping them reach quarterly profits of £1 billion.
Now Mark Choueke and other industry leaders are calling on marketing departments to follow their lead and fight back. “The onus is on us to prove ourselves,” says Mark.
“Marketing budget is currently far too disposable. It is the beating heart, the lifeblood and the brains of any economy. We have the tools to be directing from the top. It’s time we started demonstrating it.”
Steve Porter, Sage Accountants’ Division
