Kellogg on Branding in a Hyper-Connected World

CHAPTER 16Connecting Marketing and Finance via Brand Value

Bobby J. Calder

With an increased emphasis on brand experience and engagement, brands will require ever-higher levels of expenditure in the future. At a Starbucks store in Shanghai, consumers engage with the brand through augmented reality displays on their phones that show (among other things) how the coffees on physical display are roasted. Such cutting-edge efforts, however, are bedeviled by a very twentieth-century problem: the long-standing tension between marketing and finance. Traditionally, it falls to finance to question the contribution of marketing expenditures to the overall performance of the business. Augmented reality at Starbucks may engage consumers, but what does this expenditure contribute to business results? Consumer engagement is very meaningful to marketers,¹ but not to finance executives.

Most often finance plays an adversarial role, adjusting budgets based on the persuasiveness of the marketing case that expenditures strengthen the brand in the minds of consumers as weighed against competing calls on the business’s financial resources. Beyond this back-and-forth organizational tussling, CEOs are generally skeptical of branding expenditures, due to their focus on financials. Many a CEO has been known to comment, “I’m pretty sure that part of this money is wasted, but I’m not sure which part.” The short job tenure of most CMOs, and the trend to replace them with chief revenue officers or chief ...