Financial analysts want consistent metrics from marketers

CEOs and financial experts urged marketers to develop consistent metrics if they want to help investors understand the contribution of marketing to revenue growth.

Evening Standard London Live
The City and financial institutions need more transparency and consistency on the value of marketing in company reports.

Speaking at the Advertising Association LEAD conference today (30 January), Ash Park Capital founding partner Jamie Isenwater said that the City, investors and analysts needed consistent metrics and were also often baffled by the number of terms used for marketing spend.

He said: “Consistency of reporting terms would help engage {with that audience}. Consistency really is the crux of it – to engage the financial community you need to avoid confusion.”

He pointed out that after conducting research among companies dealing in “consumer staples” he found “not a single company reports brand equity regularly”, yet intangibles (i.e. brand value) made up the bulk of their worth.

Isenwater referred to a note he wrote while at Deutsche Bank that could help marketers in their boardroom dialogue and which formed the basis of this Marketing Week feature.

Ronan Dunne, CEO of Telefonica UK, said that win their case marketers have to convince chief executives that they have robust metrics.

“You have to build an integrity in the boardroom so CEOs have confidence in the metrics when they engage with analysts.”

Chief financial officer and managing director of commercial businesses for BSkyB Andrew Griffith said that analysts had accepted “sales per square foot” as a measurement for retail and marketing had to develop something similar, although it was essential there was also a time frame reference included.

Addressing the debate about whether marketing’s value has to be measured over a longer term than quarterly shareholder reports, chairman of Unilever UK & Ireland Amanda Sourry said: “In my experience it is very rare that you do not get a short term as well as a long term ROI. I’d always be a bit concerned with any marketing investment not returning in both the short and longer terms.”

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