Marketing budgets should be cut, says “father of integrated marketing”

Marketers should look to spend less money and turn marketing into a profit centre, according to a leading marketing academic.

Speaking at a conference in London Professor Don Schultz, chairman of Brand Finance in the US, says: “The company which spends the least on marketing is the best marketer, not the one that spends the most.”

Schultz, often referred to as the “father of integrated marketing”, adds that lower budgets are possible because of the increasing use of digital communication.

“What you should be doing is cutting expenditure on marketing every year, because it costs less to deliver digital than it does analogue.”

Schultz, professor emeritus of service at Northwestern University, says that marketers should think about investing in customers rather than simply buying services.

“We never think about investing in customers, we think about buying stuff such as advertising campaigns.”

He adds that to reduce budgets, marketers must know what the rate of return is.

“Once you know what kind of rate of return your company requires then you are talking management talk, not brand talk.”

Addressing delegates, Schultz says: “How many of you know how much you spend in terms of push versus pull? Do all retailers know what brands are and what they are supposed to say?

“The financial value of a brand is directly related to the financial value of the customer. Nothing [no department] makes money, only the customer has the resources to make you successful.”

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