Chris Burggraeve shares his experience of the marketing finance interface in his new book Marketing is not a black hole. (Why black hole? There are a lot of science fiction references. I must say that I appreciate that even if the rocket ship veers towards cheesy). His main point is a good one, that marketing should matter to finance people.
Advice On Investing
The main deliverable of the book is a way of looking at investments. In essence, Burggraeve sensibly says you should work out if the firm is good at marketing before deciding upon investing in it. His point is hard to argue with, marketing should matter to finance people. If someone doesn’t understand marketing, how can they possibly assess whether the firm will be successful going forward?
No one should follow my investing advice — I don’t. As such, I won’t comment upon his model. I think the key thing is that marketing matters, not any specific methodology.
Marketers And Finance Don’t Get On Sometimes
I did think it was funny when he mentioned people could be hurtful in their descriptions of other groups. He wasn’t wrong but I’m hoping people can get over that.
“These finance people are always so full of themselves” ([said by] marketers)Burggraeve, 2021, page 46
Honestly, that sounded like the nicest thing a marketer has ever said about a finance person. I hope they weren’t too offended by it. It could have been a lot, lot worse.
Getting Academics To Care About The Real-World
The author started a DBA (practical doctoral degree) and is clearly frustrated with academia.
It is high time we re-evaluate how marketing gets taught, not only to undergraduates, but especially to graduates, at PhD level, and in executive education.Burggraeve, 2021, page 81
I share many of his concerns. He argues academia has no plans to help with real-world tools (at least in his area of marketing/finance). Instead, academics stay in the area of basic research. (I think that is sometimes too generous — some academic work doesn’t seem even to be basic research to me).
That said, I’m not sure about his solutions. For example, starting a new journal is fine but academics only get credit for papers in recognized journals so won’t send their best work to the new journal. Academics completely ignoring many journals is sensible given the number of pointless (predatory?) journals that no one reads that are already in existence. The challenge is getting academics to care about whether they are relevant. It is a tough one. Academics won’t care simply because there is a new journal added to the list.
To this end, I also think Burggraeve should have pushed more on academics use of Tobin’s q. He cites this uncritically. I think the use of Tobin’s q is both a symptom and a cause of the disconnect between academics and managers (see here). I would have liked to hear more about his thoughts on this.
Marketing Should Matter To Finance People
I enjoyed his clear view of how brand values were put together during acquisitions.
[How much marketing assets are valued at] is more of a pure financial negotiation, rather than a marketing due dilligence-based valuation discussion.Burggraeve, 2021, page 110
Basically, the finance people and the accountants don’t really care what the number is. The process often doesn’t seriously attempt to value the marketing asset. They just want something to plug into the numbers they have already decided to use.
Another example is that:
The notion that marketing matters appears nowhere on the CFI [Corporarte, Finance Institute] site, other than an adjacent mention of the need to do some marketing research.Burggraeve, 2021, page 110
It seems evidence to me of the claim that, “These finance people are always so full of themselves“.
A Shout Out To The University Of Minnesota And MASB
On a minor note as a Minnesota alum I must note that I think E. Jerome McCarthy (also a Minnesota alum) proposed the 4Ps of marketing. Kotler, who Burggraeve credits on several occasions (e.g., page 66), has plenty of how own achievements. Why not let McCarthy have his due on the 4Ps?
He does give a shout-out to the MASB common language marketing dictionary, see here for the dictionary and here for my thoughts on it. I totally agree with the author’s view of the importance of this. The way to get people to care about what marketers are saying is to make sure we are being clear about what we mean.
For more on marketing and finance see here, here, and here.
Read: Chris R. Burggraeve (2021) Marketing IS NOT a Black Hole, Vicomte LLC, https://www.youtube.com/watch?v=4ewKSbUNOJI