Marketing's jargon is undermining its credibility with finance teams

While marketing feels it uses the same vocabulary as financial teams when reporting on effectiveness, a new report has shown that this isn't the case.

Marketing's jargon is undermining its credibility with finance teams

The report, titled Culture First, by the IPA, in partnership with the Chartered Institute of Management Accountants and Telefónica, detailed the current behaviours of more than 20 prominent brands, including John Lewis, Unilever, Transport for London and L’Oréal, on their journey to understanding marketing effectiveness. 

One of the recommendations made was for marketing teams to reexamine the terminology they use when reporting effectiveness to the board. 

A finance director interviewed for the report said, "I like certainty. Marketing also look at – I can’t quite remember the name of it – something to do with brand equity. If I’m really honest, from a finance point of view, I don’t give much weight to the softer ones – the brand equity stuff."

If the marketing industry wants to increase the credibility of its brand health and customer metrics among financial teams, it should consider changing its language to reflect the commercial benefit it drives, the report suggested.

Some of the brands interviewed have already started to do this, the report continued. A number of respondents have started to rephrase their terminology. For example, "non-working media budget" (which includes agency fees) has been changed to "asset production" and the new phrase has resonated more internally across the organisation.

Here are few more terminology changes highlighted in the report:

But, while a language change may help reframe the benefits of budgets spent, there is still a need to ensure that the data supporting the value of brand-building is proven more often and accepted among financial teams.

The report recommended a further four behaviours that are prevalent in brands that successfully embrace effectiveness:

Collaboration 
At the heart of the changes in behaviour, in the more mature and successful organisations, is an increase in collaboration between Finance and Marketing teams, particularly regarding decision-making on marketing investment.

Process
To improve the effectiveness of marketing investment, processes include:

  • making effectiveness the beginning, not the end of the process;
  • having a shared view of customer and measurement priorities;
  • finding the metrics that matter and being consistent;
  • having a meaningful feedback and learning cycle.

Toolbox
The more advanced companies are now including short and long-term metrics into their models. The report further documents the development of the integration of datasets, and the move from a reporting culture to a learning culture.

Capability
Skills development in effectiveness is an essential requirement across the marketing industry. The choice for organisations is whether to create a new centre of excellence, or develop existing marketing and research teams or some kind of combination of both. What is certain is that there is a skills gap, as in all areas of data and analytics, particularly for individuals with client-side experience.

Facilitating change

The IPA, in collaboration with CIMA, will be helping to facilitate this change.

This includes the development of a three-speed framework, in addition to other action points.

"The needs of brands and the changes in the communications landscape have accelerated the need to not only showcase the best in effectiveness, but to help develop a framework and capability to improve the process and behaviours to deliver effective marketing investment," Janet Hull, director of marketing strategy, IPA, said. "By bringing together, for the first time, the views and experiences of agency, marketing and finance professionals, we have been able to pinpoint what good looks like, how to make it happen, and what difference it can make."

IPA Effectiveness Awards

The IPA has also launched its call for entries to the IPA Effectiveness Awards. 

New to the competition for 2018, is Sarah Golding’s President’s Prize which, aligning with her "Magic and machines" agenda, will reward the most effective demonstration of tech-led data.

"I firmly believe that technology will soon generate a new era of highly creative and powerfully effective brand-building tools that will capture both the public’s imagination and the boardroom’s enthusiasm," Golding said.

The deadline for pre-registration and the awards advisory service is 31 January 2018. The final deadline for submitting awards entries is 20 April.