Accounting for marketing deserves more consideration. Neither accountants nor marketers seem to give it much thought. That is a shame. It is a key area for understanding business. Yet, few are experts in it. Accounting For Marketing I think that there is a desperate need for marketers to understand accounting. Indeed, I think a lot…
Category: Accounting and Marketing
Who Has An Interest In Changing Accounting?
Baruch Lev and Feng Gu, accounting professors, ask a simple question. Why are managers and auditors so blasé about accounting for intangibles? Lev and Gu, 2016, page 90 Intangibles are a mess in financial accounting. Everyone knows there are obvious problems. So who has an interest in changing accounting? Intangible Assets And The Concept Of Matching…
Marketing Accountability Standards Board (MASB)
Marketing has an accountability problem. This is widely accepted even by marketers. The Marketing Accountability Standards Board (MASB) is working on this. Trust Me, I’m A Marketer Marketers argue that their actions are vital to their organization’s success but often the proof offered ends up being: “trust me, we need to do this”. It isn’t hard to see why…
Value-Based Marketing
In 2000 Peter Doyle started the abstract of his paper, Value-Based Marketing with the sentence. “Marketing has not had the impact on the boardroom that its importance justifies” (Doyle, 2000, page 299.) Doyle made a fair point. Marketing’s Lack Of Influence It is very common for academic marketers to bemoan marketing’s lack of influence. Many firms…
Marketing ROI, Heartbeats And Breaths
Clarity is important to effective language use. If our words all mean different things it is hard to communicate. It is often surprising that marketers, who often claim to be communication experts, are sometimes terribly imprecise about what they mean. We need to be clear about marketing ROI, heartbeats, and breaths. Marketing ROI James Lenskold…
The Top and Bottom Line
Preparing for class recently I came across a media report which illustrates the confusion and sloppiness that surrounds marketing metrics. I realized the problem we often have talking about the top and bottom line. Impact Of Social Media An important question is the bottom line impact of social media. How can you persuade the CFO…
Accounting For Profits And Decisions
Marketers, and business people more broadly, often use accounting profit to measure success. This isn’t too surprising. Often firms claim to be profit maximizing. Report something as profit and this sounds like something that should be maximized. That said, profits using in accounting and managerial decision-making are not really the same thing. Decisions taken to…
Market-Based Assets: An Important Idea
The concept of Market-Based Assets was introduced to tackle a major marketing (indeed business) problem. Many managers too often see marketing simply as an expense. By this logic marketing does not deliver, or at least is not expected to deliver, any long terms benefits. Being treated as an expense makes marketing a prime candidate to…
Who Owns The Numbers?
Numbers are vital to running any organization but who owns the numbers? Measurement And Judgment Pfeffer and Sutton’s (2000) book chapter starts a bit too negatively for my liking. The title sets the wrong tone. “When Measurement Obstructs Good Judgement”. To be fair their point isn’t that measurement is bad. They really mean that bad…
Good And Bad Profits
Fred Reichheld is best known for his (over) exuberant advocacy of the Net Promoter Score. Introducing Net Promoter he suggests a difference between good and bad profits; an interesting, though theoretically imprecise, idea. Are All Dollars In The Same? Short of outright fraud, isn’t one dollar of earnings as good as another? Certainly, accountants can’t…