For this week and next I will look at an excellent book – Marketing Finance – by Keith Ward. He has taught at Cranfield amongst other places. (There are later editions with new co-authors — but reading different editions of the same book too close to each other is a bit too much even for…
Category: Marketing Metrics
Faulty Sums and Accounting
I enjoy a good polemic and Keron Bhattacharya’s book on Accountancy is certainly that. A generation old now but many of the points remain. (Although the acronyms for the UK accounting standards and accounting bodies have all changed). As an accountant himself (member of CIMA) he isn’t very happy with the way accountants were doing…
Marketing, Cash Flow and Shareholder Wealth
Marketers have traditionally been pretty poor at showing why marketing matters to shareholders. In my experience marketers often just assume that marketing is important. They then just expect everyone else to believe it. Instead we really need to consider marketing, cash flow and shareholder wealth and how these fit together. Marketing Impact On The Firm…
The Right Metric Depends Upon Its Planned Use
Sometimes I worry that marketing academics have a bit of an inferiority complex. We seem to have an aversion to anything developed in marketing. Instead, we look back to psychology (if we are consumer behavior scholars). Or we look to economics (for more quantitative scholars). This means that we often see citations to other disciplines…
Proving The Value Of Marketing
Over the next couple of weeks I will consider ideas from a paper coming out in Marketing Science. [This post was written in 2018]. I wrote the paper with a former PhD student, Moeen Butt. This looks at the use of a metric called Tobin’s q. This has been used in papers claiming to be…
Why Are Intangible Investments Different To Tangible Investments?
Haskel and Westlake’s main point in Capitalism without Capital is that the world is changing and that the predominant form of investment nowadays (investments in intangibles) is different from investment in tangible assets. Why are intangible investments different to tangible investments? The Four Ss of Intangibles The authors, in making the case for intangible investments…
Why Financial Statements Fail “Digital” Companies
The way marketing features accounting statements is pretty awful. I have noted this often. Many of the issues raised are, however, applicable outside marketing. They occur with a wide range of intangible assets. Vijay Govindarajan and his colleagues, therefore, look at the providers of accounting for “digital” companies. They ask: Why Financial Statements Fail “Digital”…
Using The Language Of Business And Seeing Its Problems
Accounting, and finance more generally, is the language of business. This means marketers can’t get away from it. I recommend both using the language of business and seeing its problems. Engaging with Finance Language I think it is extremely valuable for people more broadly to understand the language of finance. Finance and accounting has challenges….
More On Accounting’s Failure To Deal With Intangibles
Accounting’s failure to deal with intangibles is a major problem in business. Marketers, and others, need to engage with financial accountants to find a better way. Problems in accounting statements Feng Gu and Baruch Lev give more details on the problems with financial accounting in their recent piece for the Financial Analysts Journal. They argue…
Measuring A Technological Revolution
Some have begun to make the argument that there is a technological revolution. A move towards intangible assets. How does one go about measuring a technological revolution? A Problem With Accounting Corrado and Hulten highlight a major problem in the way accounts are created. This applies to both corporate and national accounts. A basic idea…