I spoke this evening as a guest lecturer on an MBA marketing elective at NYU’s Stern School of Business. The course title (also the title of this post) gives you a good sense of the subject material that the students were interested in discussing. And, my, were they interested in discussing it! Rarely have I been in front of a more engaged audience. I think it took me over 10 minutes to get past the title slide of my presentation…
I left the class feeling really optimistic about the future of marketing, and the ability of marketing to contribute to business performance, and to create economic surplus more broadly. This was an audience that obviously embraced measurement (or they would not have chosen this elective!) but they were hungry for the story behind the numbers, not the numbers per se. They clearly had a view of marketing as the growth engine of business and recognized the need for appropriate methodologies to measure how marketing was adding to customer value. The quality of the questions was exceptional and ranged from questioning the validity of comparing market value to book value, to the relative importance of brand across different industries, to the impact of network effects on brand strength…
I stayed for their class presentations about the prevalence of marketing metrics in the 10Ks of five major companies. There was some excellent analysis of the Google, Microsoft, Disney, McDonalds and Coca-Cola financial statements – all of which highlighted the relative paucity of the marketing data included in the financial reports. This provoked a great discusion around the notion of “if marketing is so important, why is there so little data on marketing in the financial reports?” I will return to this topic in a future post.
For now, NYU Stern partipants in tonight’s marketing elective (and Profesor Dawn Lesh – whose guest I was), thank you for a fabulous evening!
{ 2 comments… read them below or add one }
I’m really curious to hear the critique of comparing market value to book value. Was this a group of students with a strong financial focus?
Not especially. It was a regular MBA class – so I think they were just a very smart group of students. For the record, the observation made was that market value reflects the discounted present value of the future earnings of a company and so is not compatible with the book value perspective which is a record of the historical transactions of the company. She is right. But, as I commented, book value is a characterization of the productive assets of a business (albeit not valued at current market rates). The problem was not so much that book value did not reflect current market values (though this certainly is a problem) but rather that it omitted whole classes of things that truly formed the productive assets of the company and represented the true basis for the company’s earnings.