Accounting for Marketing Activities: Implications for Marketing Research and Practice

50 Pages Posted: 25 Feb 2011 Last revised: 14 Aug 2011

See all articles by Natalie Mizik

Natalie Mizik

University of Washington

Doron Nissim

Columbia University - Columbia Business School

Date Written: May 5, 2011

Abstract

We review accounting principles related to the reporting of marketing activities and evaluate their implications for marketing research and practice. Based on our review, we argue that current accounting practices contribute significantly to the declining influence of marketing within organizations and the rise of myopic management. Financial reports misrepresent marketing contribution and impede its fair assessment. Changes to current marketing accounting practices are needed. Balance sheet recognition of all marketing-related intangibles emerged as the prevailing proposed solution. We, however, argue that balance sheet recognition of marketing intangibles will not remedy the situation. Instead, we advocate expanded mandatory disclosure of marketing-related activities and performance drivers. We advance specific propositions intended to enhance the quality of financial reporting and improve marketing management practice. We further call for specific research to help facilitate improvements in the financial reporting model as it pertains to marketing-related activities.

Keywords: Internally Developed Intangible Assets, Acquired Intangible Assets, Marketing Accounting, Marketing Practice

JEL Classification: M10, M30, M40

Suggested Citation

Mizik, Natalie and Nissim, Doron, Accounting for Marketing Activities: Implications for Marketing Research and Practice (May 5, 2011). Available at SSRN: https://ssrn.com/abstract=1768382 or http://dx.doi.org/10.2139/ssrn.1768382

Natalie Mizik (Contact Author)

University of Washington ( email )

Seattle, WA 98195
United States

Doron Nissim

Columbia University - Columbia Business School ( email )

3022 Broadway
604 Uris Hall
New York, NY 10027
United States
212-854-4249 (Phone)

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