I am currently engaged in research linking marketing efforts on revenue reporting/recognition/management. Please share any insights you may have.
In the account system you can follow the past performance, seasonality, and develop Key Performance Indicators (KPIs). Also, you create forecasts.
The marketing efforts have costs and impact the sales and margin. What is challenging sometimes to identify the impacts of the Marketing activities, since the environment is changing. For instance, decreasing margin can be a consequence of the competition and the marketing action was efficient in lowering the decline speed. Another example our margin is growing fast and marketing added value, but the trend is the result of our product development or purchasing power increase in the given region (in that case better to compare our performance with the competitors' performance, e.g. looking the changes in market share).
I would use longer trend lines of revenue and margin by product, customer group and region, and look for bumps, slope changes followed by a marketing activity. Also, you can do marketing pilots in a given region or for a given customer group to see how they differ from the uninfluenced groups. The other way to leave out a region from the marketing campaigns or developments, and see how this control behaves compared to the others.
In a typical business, ALL decisions are made based on the expected Return on Investment (ROI). It is the accounting people who do that calculation of ROI, or attempt to estimate ROI for proposed projects and activities.
Even marketing efforts are planned and evaluated based on anticipated and actual ROI. So the accounting function is vital to strategic planning in a business or organization.
Accounting research mostly involved in linking accounting variables/numbers to improving the firm values. Earning of a firm is a crucial measure to underline the progress of the firm in improving its market value. In this context, how does the marketing expense become important or really worth in improving the firm value can be investigated, by incorporating other important factors as controlling variables in a model (such as portfolio investment, expenses in IT, etc.), which also contribute to improve the firm value. The main focus of the investigation should be on exploring the role of marketing related expenses in adding market value of the firm. Hope this simple suggestion will help you. Good luck.
Dear David,
In my opinion, the effort in trying to link marketing actions to financial outcomes (not accounting) is being made mostly by the marketing academics , you can find a paper on ROI and EVA of Marketing written by me in my profile. Also you can look for papers related to Customer Lifetime Value and Customer Equity, some authors: Gupta, S., Rust & Lemon, Villanueva, Pfeifer...
Best Regards,
Mariano
There is a strong link between accounting and brand valuation. All marketers are concerned with brand equity which can be measured by using the tools of consultancies like Interbrand, Millwardbrown, Brandfinance, etc. All of them, at a certain stage of the valuation process, need accounting competences, for example to determine the EVA (based on forecasts) that can/should be attributed to a certain brand.
- Badges
- Science topic
- Similar topics
- Linguistics
- Composition Studies
- Writing