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Marketing Accounts

  • Dec 20, 2017
Marketing Accounts

In a recent article, Ivey professors Neil Bendle and Xin (Shane) Wang argue that one reason for marketing's relative weakness in the boardroom could be a neglect in reporting market-based assets. Marketing is often an investment that create market-based assets, such as brand equity, but financial accountants find it preferable to omit market-based assets from their balance sheets rather than use imperfect estimates; this limits the chance of mistakes that might mislead investors into overvaluing a firm. As a result, nearly all marketing investments are immediately expensed, even when they are intended as investments in building long-term value. Creating comprehensive “marketing accounts” internally can mitigate the problems caused by financial accounting's omission of market-based assets, and could increase the influence of marketing in an organization. Bendle and Wang explain their ideas with data and examples, making a persuasive case for using marketing accounts to capture the value of market-based assets.

 

Bendle, Neil Thomas and Xin (Shane) Wang (2017), “Marketing Accounts,” International Journal of Research in Marketing, 34 (2), 604-621.

Tags

  • Marketing
  • Neil Bendle
  • Xin (Shane) Wang
  • Faculty
  • Research