73% of CEOs think marketers lack business credibility because of a lack of business strategy alignment

That is a key finding of The Fournaise Marketing Group 2011 Global Marketing Effectiveness Program which interviewed more than 600 large corporation and SMB CEOs and decision-makers in the US, Europe, Asia and Australia.

Released June 15 this year, the top 5 issues CEOs have with marketing are:

(1) They keep on talking about brand, brand values, brand equity and other similar parameters that their top management has great difficulties linking back to results that really matter: revenue, sales, EBIT or even market valuation (77%)

(2) They focus too much on the latest marketing trends such as social media, because they believe they represent the new marketing frontiers – but can rarely demonstrate how these trends will help them generate more business for the company (74%)

(3) When asked to increase their Marketing ROI, they tend to understand it as cost cutting through better economies of scale or negotiations with their third-party partners and agencies, instead of top-line growth generation: more revenue, more sales, more prospects, more buyers (73%)

(4) They are always asking for more money, but can rarely explain how much incremental business this money will generate (72%)

(5) They bombard their stakeholders with marketing data that hardly relate to or mean anything for the company’s P&L (70%)

Most worrying for agencies is: “Unlike CFOs and Sales Forces, they don’t think enough like businesspeople: they focus too much on the creative, “arty” and “fluffy” side of marketing and not enough on its business science, and rely too much on their ad agencies to come up with the next big idea (67%)”

The report says that most concerning: “while 73% of CEOs think Marketers lack business credibility and are not effectiveness-focused enough to generate incremental customer demand, 69% of the marketers Fournaise talked to feel their strategies and campaigns do make an impact on the company’s business, even though they can’t precisely quantify or prove it – confirming the great CEO-Marketers misalignment”.

Best summed up by Jerome Fontaine, CEO & Chief Tracker of Fournaise who said “Until Marketers start speaking the P&L language of their CEOs and stakeholders, and until they start tracking the business effectiveness of all their strategies and campaigns to prove they generate incremental customer demand, they will continue to lack credibility in the eyes of their CEOs and will continue to be seen more as a cost centre than an asset”.

Well put. What do you think? Do marketers lack business credibility because of a lack of business strategy alignment?

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About Darren Woolley

Darren is considered a thought leader on all aspects of marketing management. A Problem Solver, Negotiator, Founder & Global CEO of TrinityP3 - Marketing Management Consultants, founding member of the Marketing FIRST Forum and Author. He is also a Past-Chair of the Australian Marketing Institute, Ex-Medical Scientist and Ex-Creative Director. And in his spare time he sleeps. Darren's Bio Here Email: darren@trinityp3.com
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5 Responses to 73% of CEOs think marketers lack business credibility because of a lack of business strategy alignment

  1. Jon Manning says:

    Totally agree! No mentioned of marketers getting a grip on pricing though? Remember that – the forgotten "P" of Marketing?
    Fortunately, a recent survey from Accenture (1,000 execs, 12 countries, 8 industries) sheds some light on this:
    * Three-quarters of companies do not have a pricing strategy for difference marketing situations, nor is their pricing strategy tightly aligned with their overall business strategy;
    *71% of firms put price optimisation in their top three priorities for the next 18 months, but only a quarter boast "sophisticated" capabilities here at present.
    Jon Manning http://www.PricingProphets.com

  2. Bart Pavlovich says:

    Very interesting article, and I would agree that most advertising agencies are guilty, guilty and guilty as charged.

    On the other hand, a lot of marketing managers cannot supply sales figures before their campaign runs, and / or after their campaign runs.

    A lot of firms (and their marketing managers), do not seem to have any measurement procedures in place.

    They just can't tell you if your ads are working or not.

    Advertising will most probably always raise brand awareness of some kind, after all, most advertising 'works' at some level.

    But I'm sure most advertising agencies would love to know how well their campaigns are working and if they are making money for their clients.

    It's not only good for an advertising agency's client case history, but if their client is making money, there's probably less chance of them being fired.

    After all, sales is why we exist!

  3. Just to clarify my previous comment/s…

    Retailers know when their campaigns are working pretty quickly.

    I remember working with the (in)famous Wayne Garland on a 'sale' campaign for Hardy Bros.

    For the weekend sale, we picked the most beautiful and most expensive jewellery to feature in an ad that ran on the Saturday.

    Dutifully, I bought a copy off The Age to see how the ad looked.

    I was admiring it over a coffee when Wayne suddenly called me.

    He said… 'Bart…Hardy Brothers have just been robbed and the thieves stole all the pieces we featured in the ad'.

    Without missing a beat he said: 'See! We do ads that work the day they run!' 🙂

    • TrinityP3 says:

      Hi Bart, I agree. The fact is that this is an issue facing marketing, not just agencies. Marketing is increasingly being held accountable and the choice must be made: Is it a cost of business, in which case it will face increasing financial pressure to reduce expenditure? Or is it an investment with a defined and proven return, in which case increased investment will come with success? Placing your head in the sane and hoping this will go away is impossible. But like wise, marketers also need to be embraced by the organisation as marketing communications alone will not be enough. CIO, CFO, Operations, Sales, HR, in fact all areas of the business are involved in managing brand and delivering customer centric services and exceptional customer experience. But the CMO is the one that is orchestrating this experience and needs to perform this against a meausre of success.

    • TrinityP3 says:

      Perhaps Hardy Bros got more on the insurance than they would have made on the sale price?

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