Better use of marketing departments can help spur growth

Jun 01 2006 by Nic Paton Print This Article

Companies that give their marketing departments a wider, more strategic, remit will often be superior performers, a new study has suggested.

The research by the Association of National Advertisers and management consulting firm Booz Allen Hamilton found that where marketing departments were seen as "growth champions" they were 20 per cent more likely to exhibit superior revenue growth and profitability.

But only nine per cent of marketing departments fell into this category, it added.

Most marketing departments were proficient in traditional marketing skills, such as communications and advertising, it pointed out.

But growth champions took on additional roles, such as holding primary authority over large strategic investments, leading innovation activities and spearheading growth initiatives with their company's chief executive.

More chief marketing officers and their teams were now moving to develop and deploy their advanced capabilities, it added.

"In today's business environment, growth is the critical marketing metric," said Ed Landry, vice president at Booz Allen.

"Our research has revealed a structure that can reliably produce higher growth in both revenue and profits.

"This creates a clear-cut mandate for marketing executives everywhere: upgrade your capabilities, assume a greater leadership role and position marketing so it can be a primary driver of your organization's growth agenda," he added.

Michael Palmer, executive vice president of the ANA, agreed. "For marketers to successfully migrate into a growth champion role, they must be metric-oriented to be seen as 'owners' of their company's key growth-support functions," he said.

"It's critical that they play a greater role in strategic growth initiatives and develop significant general management skills while also applying financial and analytical expertise to guide large, growth-oriented investment decisions," he added.

The online survey asked 2,000 marketing executives about the structure, practice, decision rights, and capabilities of the marketing departments at their companies.

It found several distinctive characteristics of growth champion marketers.

These included, that three quarters helped the chief executive develop the strategic growth agenda, against 38 per cent of all respondents.

A total of 81 per cent presided over product innovation and business development, compared with just 10 per cent of the rest.

In fact, half of the respondents in the other categories overall reported no involvement in these activities.

More than 80 per cent approved large, growth-oriented investments such as market-entry or product launches, while fewer than 10 per cent in the more traditional categories had this same authority.

Nearly nine out of 10 made major strategic positioning, channel strategy, pricing, and communications decisions, and 98 per cent led other functions such as sales and finance on growth initiatives.