Closing the Gap between Marketing and Finance: The Link to Driving Wise Marketing Investment

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Reibstein, D. (2015). Closing the Gap between Marketing and Finance: The Link to Driving Wise Marketing Investment. NIM Marketing Intelligence Review, 7(1), 22-27. https://doi.org/10.1515/gfkmir-2015-0003

Year

2014

Authors

David J. Reibstein

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Closing the Gap between Marketing and Finance: The Link to Driving Wise Marketing Investment

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NIM Marketing Intelligence Review

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Marketing Measurement, Marketing Returns, Intangible Assets, Brand Value, Customer Value, Marketing- Finance Interface

Unlike a couple of decades ago, today the majority of firms’ value is in intangible assets. The majority of these intangibles are the primary responsibility of marketing. Therefore, it is imperative to understand how marketing expenditures are linked to these intangible assets and increasing the value of intangible assets must be in the interest of both marketing and finance.

It is not always easy to demonstrate this link and many marketing departments are still struggling with proving the financial returns of their activities. Too often marketers rely on typical marketing metrics, like awareness or preferences whereas finance is more concerned about market results like profit, cash flow or ebitda. Rather than letting marketing budgets be cut during economic downturns marketing managers should learn to show the value marketing brings to the firm. The key for marketers is learning to speak the financial language of the firm and helping to train the rest of the organization to understand the longer-term financial assets resulting from marketing.

Authors

David J. Reibstein, Professor of Marketing, Wharton School, University of Pennsylvania, USA

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Closing the Gap between Marketing and Finance: The Link to Driving Wise Marketing Investment

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Other articles of the MIR issue “Truly Accountable Marketing”