The Institute of Practitioners in Advertising (IPA) has criticised finance directors’ lack of understanding of the value of marketing, after a survey found they failed to appreciate the value of brands.
The survey of 200 finance and marketing directors from The Times Top 1,000 Companies was a joint project by the IPA and CIA Media-Lab, a media research division of CIA Medianetwork.
In the survey, finance directors admitted that if business costs were under pressure, the marketing budget would be the first to be cut. Many finance directors also believe their companies have no methods of measuring marketing effectiveness.
Only 29 per cent of finance directors felt that, after people, brands are a company’s most important assets. They understood the cost of advertising and direct marketing, but not the value of brand building.
The results, which do not materially differ from those of a similar survey in 1996, have led the IPA to step up its drive to put a marketing representative on the board so that brands receive better treatment. Only one-fifth of companies have a marketing director on their main boards.
IPA president Rupert Howell says: “If finance directors don’t appreciate the value of brands, we in the marketing community should try harder to make them do so, in a language they can understand.”