Journal of Promotion Management

ISSN: 1049-6491 (Print) 1540-7594 (Online) Journal homepage: www.tandfonline.com/journals/wjpm20

Marketing Audits
Why Principles of Accountability in Marketing Are Useful in Promoting
Company Growth

GeorgeSchildgeMBA

To cite this article: GeorgeSchildgeMBA (2006) Marketing Audits, Journal of Promotion

Management, 12:2, 49-52, DOI: 10.1300/J057v12n02_05

To link to this article: https://doi.org/10.1300/J057v12n02_05

Published online: 08 Oct 2008.

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 Marketing Audits:
Why Principles of Accountability
in Marketing Are Useful
in Promoting Company Growth
George Schildge

ABSTRACT. More audits are being performed in financial depart-

ments today due to the irresponsible behavior of a few top executives.
Why stop there? Might it not be useful also to look at marketing invest-
ments as a fertile field for scrutiny? A marketing audit would measure
profit and loss just as an accounting audit does. That is, it would measure
return on investment (ROI). This article points out the benefits a com-
pany can derive from measuring the ROI of marketing to see whether
this vital activity is being used to its full potential. [Article copies available
for a fee from The Haworth Document Delivery Service: 1-800-HAWORTH.
E-mail address: <docdelivery@haworthpress.com> Website: <http://www.
HaworthPress.com> © 2006 by The Haworth Press, Inc. All rights reserved.]

KEYWORDS. Audits, budgets, marketing, measurement, return on in-

vestment (ROI)

George Schildge (MBA, University of Colorado) is President and CEO of Matrix

Marketing Group, Inc., DTC Tech Center, 4600 South Syracuse, Denver, CO 80237-
2719 (E-mail: george.schildge@matrixmarketinggroup.com).
Matrix Marketing Group is a full-service marketing and public relations firm that
helps small to medium sized companies with proven strategic solutions for marketing,
branding, and profitable growth.

Journal of Promotion Management, Vol. 12(2) 2006

Available online at http://www.haworthpress.com/web/JPM
 2006 by The Haworth Press, Inc. All rights reserved.
doi:10.1300/J057v12n02_05 49
50 JOURNAL OF PROMOTION MANAGEMENT

THE PROBLEM

While marketing budgets are often being cut because they are seen by
many executives as a superfluous expense item, marketing has evolved
in some quarters to go beyond a discretionary item in the budget to be-
ing a critical component of tight budgets in the present economy. This
evolution has been driven by several factors, a key one being a new per-
ception of how important marketing is for growth. Simply understand-
ing that better marketing is crucial is not enough, however. The impact
of a company’s marketing programs is often poorly measured; so their
full potential cannot be known nor fully realized. Given the current de-
pressed economic climate, it is essential for a company to be able to
measure its ROI. When a company cuts marketing spending, it cuts the
one function whose sole purpose is to increase sales.

HISTORY

Over the past twenty four months or so, many high technology and
other companies were blind-sided by the economic downturn and did
not know how to react. When some firms finally figured it out, it was
too late. Jobs were lost, budgets slashed, market share lost and company
value diminished. Of all times to stop investing in activities designed to
sell more, a recession or period of soft demand or uncertainty would
seem the worst; yet companies do it all the time.
Further, limited internal resources are causing increasing competi-
tion between marketing and other departments. Companies are look-
ing to increase their new prospects while shortening the sales cycle by
improving the marketing efforts without increasing the budgets. When
budgets are thus limited, it is important to know which tactics within
the program are working and which are not, so that strategies can be
realigned accordingly. In effect, the push for ROI is intended to justify
marketing and demonstrate its effect on the company’s bottom line.

THE SOLUTION

Yearly, semi-annually, and monthly audits in the sales and market-

ing organizations can help marketing executives, top management,
 George Schildge 51

and investors ensure they are doing the right things to help drive
growth for their organizations. Information gleaned from these audits
can align the marketing organization and put in place the scorecard to
keep it on track.
A marketing audit is a thorough examination and evaluation of mar-
keting practices and results. It offers a baseline for performance mea-
surements and a framework for effective business planning to maximize
positive external perception and demand generation. Many companies
choose to measure the quality of marketing by the amount of generated
leads as a means of determining marketing effectiveness. Measure-
ments, an audit, must be based on marketing strategy and programs
based on pre-established criteria that include factors such as quantity of
leads, sales cycle reduction, and lower cost per sale. Periodically, this
audit can be revisited to see if the changes have had a positive impact on
company performance in the areas of sales growth and company value,
or indicate where adjustments may be required, such as positioning, or
demand generation on the sales cycles.
The audit helps the organization understand aspects of strategic im-
portance in sales and marketing. Its results become the blueprint for
strategic decisions, for future sales and marketing plans by tying funds
for sales and marketing to direct sales and leads generated. For example,
if the sales cycle is twelve months, the associated income must be dis-
counted back to the date the marketing program funds were spent under
the “time-value-of money” concept.
Additionally, an audit helps the company determine the value of a
sale and a sales lead. Value of a sale itself is fairly easy to determine–in-
come generated after all expenses incurred–but the value of a lead is
trickier. Is the lead strong or weak, we ask. What is its income potential?
Where is it in the buying cycle? What are the chances of closing the
lead? Marketing measurement programs–audits–that factors in all of
these variables provide a detailed picture of a marketing program’s ROI
and are critical for a company to stay in business.

CONCLUSION

There are no permanent “right” answers in marketing. Customers’

needs and wants are moving targets, and marketing programs require
testing and retesting to find the most profitable formula. A marketing
audit is the way to achieve success by providing an interim report card
52 JOURNAL OF PROMOTION MANAGEMENT

to help you and your staff tap into inherent resource. Whatever industry
your company serves, whether or not you work with a marketing
agency, your company executives should insist on developing robust
measurement practices to assess and demonstrate effectively the value
of your marketing efforts.

Received: April 11, 2005

Accepted: June 18, 2005