If you want a bigger marketing budget, focus on creating cash flows

Marketing, it seems, has a complicated relationship with confidence. On one hand, industry thought-leaders are quick to dramatically highlight the strategic risks involved in budget cuts and reduced ad spend. On the other, the same voices are heard meekly admitting that, in the grand scheme of things, advertising isn’t really that important.

Both statements can be argued to be correct. But that also means that both statements can be argued to be incorrect – if there are inherent risks in cutting ad spend, advertising cannot be unimportant.

Obviously, the answer is, as always, ‘it depends’. Budget cuts may carry a strategic risk, but risks are weighed against other risks and it may turn out to be a risk that needs taking. Similarly, advertising may be a weak force, but is nonetheless a force. Improving the odds of a purchase from 1 in 10,000 to 1 in 9,999 in a single individual makes little difference, but across a large audience it may be significant.

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