Finding the appropriate balance between commercial opportunities and marketing investment has been a long-term challenge for brands. Recent research from Analytic Partners found marketing activity contributes anywhere from 10% to 50% of business performance. While this emphasises the positive impact an effective marketing strategy has on a business, it poses the question, what is driving the other 50-90%, of a company’s growth?
Marketing does not operate in a vacuum. This was acknowledged by Laurent Freixe, Nestlé’s CEO, recently, as when addressing investors, he mentioned that “it is important to address the issues in the right order. For instance, there is no point in increasing marketing spend behind a product without taste preference or where we have the wrong pricing”.
Over the years, many brands have seen lacklustre growth due to overinvestment in the wrong areas, or lack of attention on external trends and impacts. On average, 60% of business growth is driven by non-marketing factors such as availability, consumer trends and macroeconomic factors.
Recently Liquid Death paused international sales despite a strong demand as the business no longer had production capabilities outside the US. And the looming potential tariffs on US imports from some countries means that brands will need to identify how these changes will affect their prices and therefore sales. For example, if they can’t absorb all the increased costs and are forced to raise prices, how can they focus on retaining customers?
When businesses solely depend on narrow, siloed and partial marketing-only metrics as the main driver of sales, they suffer from marketing tunnel vision. And this carries a steep cost – businesses can misjudge the real value of specific programmes and miss out on broader growth opportunities that matter to them. Beyond marketing, areas such as pricing, distribution, operations, brand activations, and more can change the entire direction of a brand’s growth. A complete commercial view needs to encompass all of these factors while identifying different outcomes.
Each aspect has its own place in a brand’s ecosystem and may impact others to greater or lesser degrees. Marketing is often viewed as its very own ecosystem, but they need to intertwine with the rest of the business – simultaneously driving success while mitigating risks.
For example, this year, Spotify is directing its attention toward ‘accelerated execution’ by improving its service. “The landscape is shifting constantly and I want to set the pace, not play follow the leader,” said CEO Daniel Ek. The music streamer is reducing its marketing spend to focus budget on delivering the very best offering to its users in line with external trends, such as the rise in video consumption.
To help understand the different pressures on a business and to what degree they can be controlled and mitigated against, businesses need to consider which of three categories they sit within. The first category – business-owned – encompasses product strategy, pricing and promotions, (owned) customer experience, marketing and media. Next, the business-influenced category consists of supply chain and distribution, retail and channel relationships, partner experiences and third party touchpoints. Finally, external-to-the-business includes any competitor moves, macro-economic trends, social and cultural shifts, and regulatory and environmental conditions.
By categorising each factor, then understanding how to measure the impact of each category, organisations can gain a complete picture of what is affecting demand, ensuring that each marketing effort complements broader operational realities and external market forces.
Business growth, both short and long term, requires leaders to understand how all factors – both marketing and beyond – play their role to achieve real growth. Marketing campaigns, promotions and activations are, and will continue to be, an essential lever of growth but they should be seen as part of a larger ecosystem, rather than a separate silo in the business.
Heavy investment in marketing, or overreliance on flawed marketing data, means other critical insights are overlooked. And these are where the largest untapped growth opportunities often exist. Success depends on an interconnected commercial intelligence that not only measures marketing’s impact but also considers the full spectrum of factors driving business performance. Without this complete view, businesses risk missing the bigger picture and, ultimately, their greatest opportunities for growth.
Justine O’Neill is associate vice president at Analytic Partners
