Marketers: You Control 10% of Human Output. Think About That.
Facebook likes. Retweet to win. Was there ever a more evidence that marketing was the department that should be taken less seriously than others?
There are many reasons to believe that marketing is important. In it’s widest conception marketing is the link between a firm and it’s customers; as Peter Drucker famously said:
Because the purpose of business is to create a customer, the business enterprise has two–and only two–basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.
Many marketers — corralled into no more than amplifying messages for products already produced — have lost sight of that core truth.
But here's another observation – and it may surprise you — marketers control 10 percent of human output. That is the total sum of the economic output of Brazil, Germany and Russia.
So what marketers do matters.
10 percent!
That is right. Ten percent of human output is controlled by marketing.
We got to this number by looking at a range of trustworthy surveys — don't take it scientifically but it is probably close to the money.
According to this survey of CMOs, 11% of company budgets are spent on marketing.
The average profit margin of companies across the S&P 500 is about 10%. Assume that is a constant profit margin across companies outside the S&P 500 and across the world.
And according to the McKinsey Global Institute, the largest 8,000 companies in the world have total revenues of $57trn per annum, or around 90% of global output.
This means that about 11% * (1/90%) – or about 10% – of company turnover is spent on marketing; and that large company turnover represent the bulk of global output.
One tenth of human output is controlled by marketers. The equivalent of the economies of Germany, Russia and Brazil combined.
Which means marketers have a responsibility to make sure their marketing makes sense. To make sure it serves a purpose - of ensuring customer needs get met profitably and sustainably. To ensure that customers efficiently learn about product relevant for them. To eliminate waste, redundant or substandard products. To embrace innovation, data and analytical tools to focus on getting the best results for every dollar you spend.
Remember: 10 percent.
You can follow me on twitter (@azeem) where I occasionally might say interesting things.
Photo: Jacek Falawka/Shutterstock
Sales Manager at Smart Solutions & Board Member at Mountains Beyond Borders
10 年The purpose of a business is to create a PROFIT.
Alchemy of AI and human storytelling — marketing's new magic.
10 年I'm not sure I fully understand this (although I love it, since it stokes my considerable ego...LOL). What does that mean "human output?" I tried to look at the McKinsey link you included, but it didn't work. When you say that only marketing and innovation produce results and the rest are costs...that doesn't really make sense to me. Costs are a necessary part of producing results, and if you look at it that way, every department in a company is necessary in order to create products and sell them. Seems like they are all costs and that together, they collectively produce results.