Educating Your CEO About Marketing (Part 2)

CEOs are likely to think of marketing as the money the organization has to spend in order to sell its products and services. They typically view marketing as “marketing spend,” the necessary annual expense to meet forecasted revenues.

We marketers must teach our CEOs to view marketing as “marketing invest,” the resources devoted to produce profits and future growth for the organization.

Marketing's value to the organization will be fully understood by CEOs when we manage marketing as an investment rather than as an expense.

Marketing budgets are typically set as a share of forecasted revenue, with the expectations that marketing will increase market share. Marketing expenditures, including sales, is typically 15-20% of each revenue dollar, while capital projects are typically 5-0% of the same revenue dollar. But while the capital expenditures are treated as investments, the much larger marketing slice is viewed as an annual expense.¹

In Part 1 of the CEO education process, we explored “Marketing Upstream,” the value marketing brings to identify future sources of money. In Part 2, we explore “Marketing Downstream,” the investment in marketing we must make now to generate money both now and in the future.

Marketing Downstream

Read the Full Article