At the same time, marketing directors are increasingly concerned at the amount of time spent on data analysis, and the value it creates. The mountains of customer data provided by one to one relationship programmes, the precision of sophisticated research and database capabilities, and the numerous metrics introduced to improve marketing effectiveness, have introduced a level of science to marketing, but also created a fear of "analysis paralysis".

One marketing director recently described her frustrations in seeking to recruit good marketers. "There are a lot of well disciplined, analytically strong marketers out there. But I really struggle to find ones who also have a creative edge these days". London Business School's Tim Ambler also expresses concern that the focus on numbers is in danger of killing marketing's passion and creativity. He even argues "marketers do not need to understand and use finance-speak, but only as an addition to their more important value-generating skills."

The answer is to use finance wisely. Marketers must think harder about which are the right numbers to use, and how they can be used to open up new marketing opportunities, to strengthen the case for investment and support, to demonstrate the impact on the business short- and long-term, and to remind the CEO that marketing is actually the best thing he or she could do. Indeed, PA's new research shows that marketing is the biggest driver of value creation in a business, yet few companies and their marketers have made the connections to make the most of it.

Market leaders such as Nike and Orange are examples of outstanding shareholder value creation, in large part due to excellent marketing. In the case of Nike, CEO Phil Knight has driven a culture of constant market and product innovation, with a keen focus on the bottom line, showing that even long-haired revolutionaries can embrace financial discipline. Similarly mobile phone brand Orange has created a bright future for its shareholders, and is estimated to have delivered around £27 billion to its various owners, as measured by its cumulative acquisition values.

First, find the bottom line
The bottom line for marketers is the same as in every other part of the business. It is the commercial and legal requirement of the company to deliver a return to shareholders. Marketing's focus tends to be closer to the top line - the revenue and sales contribution - which is seen as more relevant to their actions, yet can often conceal a whole set of factors which determine the real performance of the business, and can therefore blinker marketers from making the right decisions.

"Shareholder value" is a much-quoted and often-challenged phrase. It inevitably invites questions about other stakeholders, whether a focus on shareholders detracts from a customer orientation, whether it encourages a short-term focus rather than longer-term investment. These are actually red-herrings, and shouldn't distract us from pursuing the benefits of a value-based approach.

So what does shareholder value actually mean?

And what's so different about that?

Marketers who measure results by volumes, market shares, revenues, sales contributions, and even operating profits are not necessarily focused on the bottom line. Whilst these are worthy metrics, and all have the potential to support better marketing, there is no guarantee that they actually do contribute to the bottom line or that they actually do create additional value for shareholders.

Typically a product may look operationally profitable, however when one takes into account the amount of capital involved, it is actually economically unprofitable (because the high cost of equity eats up the operating margin). Trying to sell more of such a product would be the worst thing you could do.

An example of this thinking in action is at Diageo, where virtually all marketing effort is on the eight brands which generate the vast majority of economic profit. Diageo realise that most of the other brands are actually destroying value, and therefore have their support restricted unless they can be reengineered to create value.

Second, make the connections
The real test, and the real trick, is to make the hard connections between these economic measures that drive the bottom line financially, and the practical marketing activities that are driven by the decisions and performance of marketing people. For example, a real understanding of what drives the best TSR has helped marketers at Coca Cola know whether brand building, driving sales volume or tactical pricing has the biggest impact on their business performance. This knowledge influences the reward structures of marketers, and the decisions they make.

Indeed, whilst marketing objectives such as improving customer retention sound like worthy goals, they may not be the most important drivers of the bottom line in your business. The value drivers of each company will differ, partly influenced by the amount of capital employed in the business, and the dynamics of the market, although they will probably be similar across a sector.

The simplest way for marketers to think about what creates shareholder value is perhaps to focus on the concept of future cash, and imagine a pipe of cash stretching from today into the future. The marketers challenge is to make this cash pipe as long, as fat, and fast-flowing as possible. The bigger the size of the future cash pipe, the more shareholder value. Consider

This is a simple model, but starts to demonstrate why the CEO must use marketing rather than anything to drive shareholder value. Process efficiency will never create a fatter, longer, faster pipe. In reality these connections must be defined through more rigorous "value driver analysis", maps which connect marketing decisions to marketing outcomes, marketing outcomes to financial impacts, and financial impacts to shareholder value.

The benefits can be huge, and quick. Microsoft found that such connections across their sales and marketing activity delivered over $1 billion benefit in the first year.

Third, drive the bottom line
John Sunderland, CEO of Cadbury Schweppes, knew what he was talking about when he took up his position in 1997 and announced "Within four years I will double the value of this business … economic profit will be our key measure of success, and building strong brands will be at the heart of achieving this."

So if your CEO sets out an ambition like this, as a marketer what should you do differently?

How to get a better return on spend… a value-based marketing programme identifies the marketing actions that will generate best returns, this year and longer-term. It identifies which levers to pull (eg advertising, sales promotion, product development, relationship building) and how to most effectively leverage your marketing assets (such as brands, customer knowledge and distribution networks).

Value-based marketing is often dismissed as sophisticated analysis, or complex performance metrics. It is much more. It is fundamentally about decision-making - choice of markets and positionings, choice of products and customers, choice of offering and price, choice of activities and investment.

Most conventional data analysis is driven by the need to create a broad range of proxy measures because there appears to be no best measure; or marketers are so unsure about their criteria for decision-making that they take comfort from thick reports. So does a value-based approach to marketing create more analysis and inhibit creativity? Quite the opposite.

Great news for marketers
The great thing about value-based marketing is that it focuses on the numbers that really matter, and the right basis for effective decision-making. Invest once in the process to generate the right data, then you have less data, quicker to generate, with a much clearer focus… and therefore much clearer scope to focus innovation, and much more time to creatively do it. And the CEO will like it too. What board will argue with a new marketing proposal that creates significantly more value for shareholders?

At Cadbury-Schweppes, four years later, John Sunderland's value-based marketing approach focused on creating exceptional value for customers by investing in leading brands, and on market and product innovation. With stretching performance targets, clear marketing priorities, and billion-dollar acquisitions such as Snapple, he achieved his targets thanks to great marketing.

This is a message for every CEO as well as every marketer. PA's new research demonstrates how value-based marketing really can create much more shareholder value - on average 5 times more - than anything else a business can do.

This is great news for the marketer (ready to command a much stronger voice in the boardroom, and gain support for new initiatives and bigger budgets), great news for the customer (who will benefit from the increased investment in existing and new products and service), and great news for shareholders (who are likely to getter a better return on their investments).
PA's checklist for getting to grips with value-based marketing: