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Nov 04, 2005 03:40 PM
Where Do the Dollars Go?
When I talk with accountants about marketing, their eyes start to glaze over,
until we start speaking in the terms they use every day -- namely, is marketing
a cost-center or a profit center. The simple answer: it depends on how
good the marketing is. "e;Good marketing, by default, creates its own budget"e; has
been a mantra here since the beginning. But good marketing begins with having
the right marketing model. And your marketing model dictates, to a large degree,
what you'll pay for marketing.
There are three major marketing models available to companies:
The first is to build your marketing department in-house -- an in-house agency
that has a writer, a designer, a Web master, a search engine optimizer, etc.
But the problem with this model is overhead (and under utilization).
The second is the "e;agency model"e;. With this model, the marketing department is
essentially hiring the agency to do it for them. What is "e;it"e;? Everything that
they can get you to buy ... identity redesign, content development, public
relations. I've heard them offer to train sales people and even provide
physical security. The answer is always "e;yes, we do that,"e; but the truth is
usually that they are hiring another company to do the work and marking it up to
you.
Another way is to employ what we call the Interactive Marketing Model. You hire
the small companies that are actually doing the work, then enfranchise
your marketing department to manage and coordinate the moving parts. We
published an article on this topic in SmartCEO in 2002, and it is becoming the
prevailing marketing model. Marketing Directors and VPs are seeing the sense of
this model, because it gives them more control of the brand -- and the budget.
Hopefully, this will translate to naturally reduced marketing expenses. I
think this level of accountability with creative vendors will ripple through
corporate America and create a level of transparency for finance to see whether the
individual marketing tactics are cost centers or profit centers.
until we start speaking in the terms they use every day -- namely, is marketing
a cost-center or a profit center. The simple answer: it depends on how
good the marketing is. "e;Good marketing, by default, creates its own budget"e; has
been a mantra here since the beginning. But good marketing begins with having
the right marketing model. And your marketing model dictates, to a large degree,
what you'll pay for marketing.
There are three major marketing models available to companies:
The first is to build your marketing department in-house -- an in-house agency
that has a writer, a designer, a Web master, a search engine optimizer, etc.
But the problem with this model is overhead (and under utilization).
The second is the "e;agency model"e;. With this model, the marketing department is
essentially hiring the agency to do it for them. What is "e;it"e;? Everything that
they can get you to buy ... identity redesign, content development, public
relations. I've heard them offer to train sales people and even provide
physical security. The answer is always "e;yes, we do that,"e; but the truth is
usually that they are hiring another company to do the work and marking it up to
you.
Another way is to employ what we call the Interactive Marketing Model. You hire
the small companies that are actually doing the work, then enfranchise
your marketing department to manage and coordinate the moving parts. We
published an article on this topic in SmartCEO in 2002, and it is becoming the
prevailing marketing model. Marketing Directors and VPs are seeing the sense of
this model, because it gives them more control of the brand -- and the budget.
Hopefully, this will translate to naturally reduced marketing expenses. I
think this level of accountability with creative vendors will ripple through
corporate America and create a level of transparency for finance to see whether the
individual marketing tactics are cost centers or profit centers.
