In theory, 2008 should be a good year for marketing. As global competition intensifies, the pressure on firms to innovate and respond to consumer needs has never been greater. Marketers, then, should be at the centre of the business.
Unfortunately, there is little evidence that this is the case. According to 'Marketing in 3D', a report by Deloitte on the role of marketing in driving growth, senior marketers' influence and involvement in the overall direction of the business is far from assured. Highly specialised, they operate in functional silos, separated from their colleagues. Meanwhile, their rapid passage through organisations - the average tenure of chief marketing officers is 22 months, according to Brand Autopsy - demonstrates their loyalty to the discipline, rather than to their employers. Happy in their comfort zone, they lack the ability and ambition to become chief executives, and, in an era of growing accountability, the only metrics in which they are interested are the size of their budget and team, and the number of brands on their CV.
The report, published exclusively in Marketing, spanned five European countries and involved 217 in-depth interviews. Its findings are not entirely negative; they show that chief executives claim to be supportive of marketing.
According to the research, 81% identified marketing as a key driver of growth, 85% believe it is crucial to devising strategy, and 44% judge strategic planning to be the most important skill of the marketing director.
Yet these figures are in contrast with the finding that 70% of chief executives do not believe the role of marketing is clearly articulated within their organisation, while 77% do not think that their employees fully appreciate its value. Crucially, there appears to be confusion between marketing as a concept, and marketing in practice.
Tim Ambler, senior fellow in marketing at London Business School and a member of the steering committee for the Deloitte report, says there is 'a frustrating complacency about what marketing-led actually means'. He adds: 'Many chief executives have no real understanding of marketing; they express theoretical enthusiasm, because that is what the City and investors want to hear, without thinking through the practical implications.'
But while there may be a lack of understanding among chief executives as to what marketing is, marketers are not doing themselves any favours by failing to do enough to enlighten them. The report finds that although 67% of chief executives claim to understand the value of marketing, only 50% of marketers feel appreciated. 'This suggests that marketers have a big job to do in evangelising the benefits of marketing within the organisation,' says Paul Philpott, managing director of car brand Kia.
The problem, perhaps, is that many marketers seem to be as confused about their role and contribution to the business as their bosses. The view of one chief marketing officer cited in the research is telling. 'The board meetings where marketing is firmly on the agenda often drift into conversations about corporate social responsibility or internal engagement,' the respondent explains. 'It seems that everyone thinks they are qualified to have a viewpoint. Ownership of these issues residing with the marketing function is not clear.'
According to the report, board-level chief marketing officers claim that only 16% of board discussions are about marketing, while chief executives believe marketing issues take up almost one-third of board time. This suggests that chief executives have a wider view of what marketing involves than their marketers, who are preoccupied with territory.
In one sense, this is ironic, because marketers have ceded responsibility to other functions for certain activities - customer service, telesales, pricing, distribution and product development strategy among them - that fall naturally within marketing's remit. Moreover, says Hugh Davidson, visiting professor at Cranfield School of Management, they have lost focus on 'the most basic element of marketing - creating high-quality and distinctive products and services'. The marketer's role has been emasculated and reduced to a narrow focus on promotion, communications, tactics and execution, with the time-consuming requirement to marshall and manage an ever-expanding network of agencies compromising their ability to think or act strategically.
But marketers' obsession with territory, including the size of their budgets and teams, may stem from a lack of confidence in their own ability to deliver. Another chief marketing officer quoted in the survey says: 'I worry that I'm seen as too specialised compared with my peers in other divisions. Having dedicated my career to marketing, I am perceived to lack the general commercial management and operational skills to get to the next level.'
Such concerns are justified. Specialisation within marketing can be seen as reinforcing its ivory-tower mentality and, in most organisations, the way marketers progress is not through different functions but through taking similar roles, with bigger marketing budgets, in other organisations. 'In areas such as sales and finance, you get to the top by building teams and being a strong all-rounder,' says Malcolm Wilkinson, a partner at Deloitte and a member of the research steering committee. 'In marketing, on the other hand, success is often judged by the quality of the creative delivered.'
This culture is underpinned by marketing awards, which largely recognise creativity rather than contribution to the business, and conference agendas, where speakers appear in descending order of budget size.
Wilkinson suggests that one solution is to encourage marketers and non-marketers alike to move between functions by providing more attractive career paths within the organisation. 'This would develop their operational and people management experience and give them valuable profit-and-loss responsibility,' he says. Of course, there is nothing new about that idea; companies such as Procter & Gamble, 3M and Ford have been doing it for years. Kia's Philpott, and Ford marketing director Mark Ovenden, for instance, are executives with business-wide experience. Both believe marketing needs to be staffed by a mixture of marketing specialists and those with a broader commercial background, and that marketing directors should come from the latter camp.
But Ovenden admits that marketing could be doing itself a disservice by attracting the wrong personalities into the profession; the kind seduced by the glamorous, communication-oriented side of marketing. 'The greater part of marketing is hard, crunchy stuff,' he says. 'The foundation for anything we do has to be the product, and marketing should inform product and pricing strategy. I see myself primarily as a director in the motor industry, with a passion for the product and marketing. A narrow definition of what you do is boring and limiting; marketing is not an end in itself.'
Unfortunately, according to the Deloitte research, for many marketers the discipline is exactly that. 'Very few marketers aspire to be a chief executive, which is bad for marketing and bad for business,' says Wilkinson. 'How can they drive the business forward if they have no appetite for engaging with wider commercial and strategic issues?'
Meanwhile, the historic rift between marketers and the finance department, caused by the former's reluctance to be accountable for what they do, is as marked as ever, according to the report. About one-third of chief financial officers do not believe marketing is a key driver of growth in their organisation. But it gets worse. When asked to rate just how effective their organisation's marketing department was, more than half (54%) described it as less than 60% effective. This, crucially, is nearly double the number of chief executives who shared this opinion.
There is also a distinct lack of understanding of what marketing does. Just 14% of chief financial officers believe that the difference between the broader role of marketing versus the actual marketing function is clearly understood within their organisation. And while chief marketing officers and chief executives rank strategic planning as the most important skill for marketers, chief financial officers believe collaborating with sales is marketers' most important role.
The report states: 'Chief financial officers now appear to be isolated from their boardroom peers in their attitude toward marketing.' The comments from one chief financial officer quoted in the report helps to explain why this is the case. 'Marketers have constantly hidden behind a fog of measures that are based purely on tactical marketing activity, rather than solid financial metrics that are relevant to the City,' says the respondent. 'For years they have kept me at arm's length. This hasn't done them any favours in improving my perception of them, but has also been to their detriment in not learning or understanding how to apply financial discipline to their function. Until I'm confident that marketing metrics, both financial and non-financial, accurately reflect our business, I will not be accountable for including these in my reporting to investors and the City.'
Three-quarters of organisations do not report marketing measures to the investment community, and one-third do not even report them internally. As the report states: 'That makes it almost impossible for senior management to align the contribution of marketing to corporate goals and track meaningful change over time.'
Getting the chief financial officer on-side is critical to winning influence in an organisation, but those in finance have more of an appetite than marketers for bridging the gulf. 'Finance people understand intuitively the power of brands, and the younger ones in particular are trying to get a handle on marketing,' says Wilkinson. 'But marketing spend to them is a black hole, and marketers give them the wrong metrics, fuelled perhaps by a paranoia that if chief financial officers understood marketing better, they would cut their budget.'
One solution is for the chief marketing officer, chief financial officer and chief executive to agree five or six metrics, including, for example, market share, innovation and total marketing spend as a proportion of sales, by which marketing's performance should be measured. Philpott believes that this in itself would lead to a more common understanding of marketing and appreciation of its value.
But the question remains whether today's marketers have the aptitude, attitude or appetite required to drive business growth in the current competitive climate. John Quelch, Lincoln Filene Professor of Business Administration at
Harvard Business School, admits that 'the strength of the marketing organisation is not as good as it used to be'. He argues that there is a dearth of individuals who combine creative brilliance with the requirement for quantitative rigour. He attributes this, in part, to an absence of the kind of robust training, certification and professional standards provided by accountancy bodies. 'There is no professional body [for marketers] that mandates a shift in skills or requirements,' he claims.
Ambler agrees. 'There are no marketing qualifications worthy of the name,' he says, adding that an MBA is of far greater benefit in helping to create business-oriented marketers than a diploma from The Chartered Institute of Marketing (CIM).
Malcolm McDonald, emeritus professor of marketing at Cranfield University and vice-dean of the CIM's academic senate, insists that the latter's syllabus is modern, has a strong strategic element, teaches understanding of other business functions and is designed to create marketers with a broad set of skills. But he concedes that the CIM needs to promote the benefit of its premium Chartered Marketer qualification more effectively to employers, and argues that the marketing discipline has lost respect because 'lots of charlatans and half-wits have got into it without qualifications'.
McDonald adds that of the FTSE-100 companies only 14 have main board-level marketers because few people understand what marketing actually is. But Quelch argues that marketers are not necessarily needed on a company's board. Neither is he surprised at the conclusion of a recent study conducted
by Drexel University's Pravin Nath and the University of Texas' Vijay Mahajan that having a chief marketing officer as part of the top management team makes no difference to an organisation's performance.
'The presence of a chief marketing officer on the board is to do with the governance of a particular organisation, rather than being a reflection of his or her influence,' he says. 'What does make a difference is whether or not an organisation has an overall marketing orientation.'
Quelch believes that 'marketing generally does an appalling job at marketing itself, in terms of its contribution to the organisation and to society as a whole'. Like the Deloitte report, he poses some big questions for marketers. It is up to the profession itself to find the answers.
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