The index has been set at 119 for the first quarter of 2004, indicating that executives expect to spend 19 percent more on marketing this quarter than they spent on average per quarter in 2003.

Perhaps most importantly, the Blackfriars' study shows a strong correlation between marketing measurement practices, the corporate perception of marketing and the marketing budget.

Fifty-seven percent of the companies surveyed measured the results of their marketing efforts. Firms that measured their results had marketing budget increases that were nearly twice the percentage of those that did not measure results. Companies that measured their marketing results increased their annual marketing budgets an average of 11.2% in 2004, while those companies that did not measure marketing results increased their budgets by 6%.

Further, executives at firms that measured results were less likely to be dissatisfied with the effectiveness of their marketing. Twenty-three percent of executives at companies that do not measure marketing performance were dissatisfied with marketing efforts, compared to 9% of executives at companies that do measure performance.

The study found that the marketing budget was split up as following:

• Advertising: 31%
• Website development: 17%
• Events: 15%
• Public relations and analyst relations: 10%
• Collateral: 6%
• Concept testing:6%

The report also examined the perception of marketing by executives. While 82% percent of respondents agreed or strongly agreed that marketing is important to their company and 73% agreed or strongly agreed that marketing is the "public face" of corporate strategy, only 37% of companies said they have a VP of marketing or a chief marketing officer. This is likely due to the perception that the marketing department carries out strategy, rather than develops strategy. This tactical perception of marketing was confirmed with 71% of the executives who responded either agreeing or strongly agreeing that marketing's primary function is to generate leads.

Marketers would do well to heed the message of this study. That is, marketers must measure and illustrate the effectiveness of their initiatives in order to protect their budget and be perceived as strategic by the executive team. In short, marketing must prove its worth.

The credibility gained through greater accountability and increased consistency with corporate strategy is likely to help move marketing up the strategic food chain of an organization. If the marketing department can prove it adds significant value in terms that the CFO and CEO (and consequently, the executive team) respect -- that is, in terms related to the business strategy, and specifically, in financial terms or, at least, as measured through client acquisition, client retention, cross-selling, etc. -- it is likely to significantly increase its odds of gaining a place at the executive table or if it is already at the table, increase its influence.

A number of organizations have made progress through greater collaboration between the marketing and finance departments. In many cases, it can make sense for these two departments to work together to establish metric standards and processes.

Especially in a difficult economy, greater accountability and processes for marketing expenditures not only result in more effective marketing programs, it increases both the budget’s and the staff’s odds of survival.