An interesting phenomenon has emerged over recent years in financial accounting which could prove relevant to marketing. This is non-GAAP reporting by companies. What is, could be, the relatonshp between marketing and Non-GAAP disclosures. GAAP: Generally Accepted Accounting Principles The rules of external financial reporting, Generally Accepted Accounting Principles, are known as GAAP. Non-GAAP reporting…
Category: Accounting and Marketing
Understanding What Companies Are Spending On Marketing. SG&A Isn’t Great.
I often discuss marketing assets. Specifically, I worry about that the way marketing assets are accounted for in financial reports. This does not help us understand marketing effectiveness. For example, see here and here and here. This results of financial accounting choices creat a significant problem in understanding what marketing does. It means we can’t…
Management Accounting and Customer Recording
At least one area of marketing metrics makes me positive. The future is bright. The area is what we might call management accounting and customer recording. This tends to work best where there are contractual relationships. With contracts or, at least, stable long term connections, we can go a long way to understanding the value…
The Problem of Goodwill
Tony Tollington’s book on Brand Assets is fascinating. I am not promising it is an easy read — it gets into some pretty detailed philosophical debates around the nature of assets and accounting which can be tough. That said it is good to think about these things and Tollington definitely made me think. One key…
The Politics of Accounting
Tony Tollington’s book on Brand Assets is fascinating (although accounting rules have changed a bit, meaning the acronyms and rule numbers aren’t what are used nowadays). Tollington notes the problems with the way accounting policy treated intangible assets. Some changes have occurred since but a lot of the points remain valid. The fascinating thing to…
The Marketing-Accounting Interface
There is a lot of work linking marketing and finance. Unfortunately, at least from my perspective, nearly all of this has focused on linking markets to financial markets. Such work is useful but I would like more looking at the linkages between marketing and accounting. Sidhu and Robert’s article is an exception. They look at…
What is Tobin’s q useful for?
I am not a fan of Tobin’s q (as it is currently used). I have a Marketing Science paper on the misuse of Tobin’s q in marketing. As such I was fascinated to see a SSRN working paper with a very similar title in the field of finance/economics. The authors Robert Bartlett and Frank Partnoy,…
Marketing Response to Stock Market Pressure
Myopic management/marketing is the tendency to focus on short term gains at the expense of long term profits. There are a number of reasons for this but at its heart, for public companies, scholars point to pressure from Wall Street. Views differ on how strong the pressure is but, if one is willing to assume…
Successfully managing at the marketing finance interface
Keith Ward in his great book Marketing Finance addressees success factors in managing at the marketing finance interface. He starts by noting that historical analysis can’t change the past. Okay, that is pretty obvious, but the implication that historical analysis is mostly only useful if it “can be applied to make the future better” (Ward, 2004,…
Classifying Marketing Investments
For this week and next I will look at an excellent book by Keith Ward — who has taught at Cranfield amongst other places — Marketing Finance. (There are later editions with new co-authors that I plan to read soon — but reading different editions of the same book too close to each other is…