Marketing Organization Health Has Profound Impact On Company Profitability.

The Association of National Advertisers (ANA), in conjunction with Booz Allen Hamilton, the global strategy and technology consulting firm, released key findings from the second phase of its ongoing marketing organization study. The study found a correlation between the quality of a marketing organization’s practices – or its “health” – and its profit performance versus its competitive frame. The findings showed that nearly 60% of healthy marketing organizations were more profitable than their competition.

Released this past weekend at the 2005 ANA Masters of Marketing Annual Conference, the updated study discovered that information flow and decision rights contribute most to marketing functionality.

Edward Landry, vice president in the Consumer & Media Practice of Booz Allen, offered four Organization DNA factors which affect the “health” of a marketing organization during his presentation of the study on October 9. He cited organization trust, marketing role definition, ease of information flow and speed of decision making as the underpinnings of organization health.

Building on this point, the study indicated that one-third of North American marketers believe that important strategic and operational decisions quickly translated into action, compared to more than half of marketers at more profitable companies.

The study noted that only 29% of North American marketers felt that information flows freely across organizational boundaries compared with 42% of marketers who work at more profitable companies. Even more striking, 68% of North American marketers said that decisions in their companies are often second-guessed while 80% of corporate marketers within healthy organizational structures believe their decisions are questioned.

“Understanding the complicated nature of marketing organization is critical to the success of all marketing strategies, said Bob Liodice, President and CEO of the ANA. Phase two of this study demonstrates that healthy marketing organizations are able to move ahead with their goals and become more effective than their counterparts.”

As reported in phase one of this study, the perceived role of marketing varies dramatically by management level and function.