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<p>Unlike a couple of decades ago, today the majority of a firm’s value is in intangible assets. Marketing carries the primary responsibility for most of these intangible. Therefore, it is imperative to understand how marketing expenditures are linked to these intangible assets and that increasing the value of intangible assets is in the interest of both marketing and finance.
It is not always easy to demonstrate this link, and many marketing departments still struggle to prove 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 train the rest of the organization to understand the longer-term financial assets resulting from marketing.
</p>
</abstract>

Unlike a couple of decades ago, today the majority of a firm’s value is in intangible assets. Marketing carries the primary responsibility for most of these intangible. Therefore, it is imperative to understand how marketing expenditures are linked to these intangible assets and that increasing the value of intangible assets is in the interest of both marketing and finance.
It is not always easy to demonstrate this link, and many marketing departments still struggle to prove 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 train the rest of the organization to understand the longer-term financial assets resulting from marketing.

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

William S. Woodside Professor and Professor of Marketing, Wharton School, University of Pennsylvania, U.S.A.

NIM Marketing Intelligence Review

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Unlike a couple of decades ago, today the majority of a firm’s value is in intangible assets. Marketing carries the primary responsibility for most of these...

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

Published Online: Apr 23, 2015

Page range: 22 - 27

DOI: https://doi.org/10.1515/gfkmir-2015-0003

© 2015

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.