Marketing is growth capital allocation, not opex

To understand the future of your business' leadership, look to a well-trained marketing manager. Not as a cost-center operator, but as a capital allocator with a portfolio of time-lagged growth bets.

Marketing as capital allocation

When Philip Kotler defined marketing management as "the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value,"* he wasn’t describing communications. He was describing resource allocation.

Segmentation, targeting, positioning, and the 4P mix—these are investment decisions not even in in disguise. Done well, marketing isn't a downstream advertising function. It's upstream growth design.

* Marketing Management, 16e, Kotler, Keller, Chernev (2022).

This is why Procter & Gamble, Unilever, and other market-oriented incumbents have long treated marketing as the core pipeline for future general managers. As former P&G CMO Jim Stengel noted, marketing at P&G is business leadership. You're expected to know the consumer, define the strategy, price for margin and market share, and orchestrate execution across functions. That is not marketing in the recent B2B SaaS sense—it's full-spectrum business command.

Yet in most B2B boardrooms, marketing remains framed as discretionary spend: variable opex that inflates when growth is good and compresses when the CFO tightens belts. Worse, it's a 1P marketing mix: promotions only. This framing is not just outdated—it's analytically incoherent.

To once again paraphrase Jim Stengel, marketing isn't a department—it's the company.

The false dichotomy of spend and scale

It's true that some forms of marketing—performance ads, direct response sales activation—yield immediate lift. And that's precisely the trap: executives conflate fast feedback with reliable return. But if 95% of a category's addressable market is out-of-market at any given time (as John Dawes' work shows), then short-term sales activation is operating on borrowed demand. It's yield harvesting, not creating future demand.

Brand investment, on the other hand, is a long-duration bet. It reaches the 95% who aren't ready now but will be someday. The time-lag between exposure and action might be quarters or years. So when companies cut "non-working" media, events that don't immediately drive deals, or delay brand campaigns in the name of efficiency, they're not saving money. They're de-capitalizing future growth.

This isn't a creative problem. It's a finance problem. Specifically, it's a misclassification of marketing as opex when much of it behaves like time-lagged growth equity. The returns are nonlinear, the feedback loops noisy, the payoff schedules unpredictable—and yet the ROI* over time, is compelling.

* ROI has it's place but let's be clear that it's an accounting efficiency metric, not a marketing effectiveness metric.

Introducing Time-Adjusted Growth Equity

Great marketing managers don't treat campaigns as isolated initiatives. They manage a portfolio. Each campaign, channel, and tactic has a unique risk profile, time-lag, and return distribution. The role, then, is not to "run marketing." It's to allocate growth capital across a spectrum of time horizons, from immediate revenue (sales activation) to long-term brand equity (mental availability mapped to category entry points).

We call this time-adjusted growth equity (TAGe). It reframes marketing not as an expenditure but as an investment with deferred yield, subject to the physics of demand readiness and category cycle times. Like venture bets, these investments have asymmetric outcomes—misses are cheap, hits compound.

The implication is profound: marketing managers, properly understood, are capital allocators.

Their job is to map capital across consideration and conversion functions, to build and price products the market needs, with a precise understanding of payback periods, marginal channel efficiency, and market saturation dynamics.

TAGe, where e symbolizes the Euler's Number, modeling natural growth processes (e.g., compounding of interest, growth, etc.)

Accounting treatment: a necessary distinction

Let's be clear: this isn't a call for CFOs to start capitalizing marketing expenses. Under current accounting standards, marketing spend is classified as opex, and that's appropriate for most activities.

However, it's worth noting that there's an ongoing discussion among financial professionals about whether certain long-term marketing investments—like brand development—should be treated differently. These investments often yield benefits over extended periods, resembling the characteristics of capital expenditures.

Until accounting treatment evolves, marketers and CFOs must work cross-functionally to:

• Justify long-horizon marketing investments using multi-period payoff models (e.g., customer lifetime value IRRs, brand equity lift curves).
• Separate sustaining activities (maintenance) from strategic bets (growth) in internal budgeting.
• Quantify depreciation or economic decay of brand-related assets, even informally, to enable more investment-grade evaluation of marketing's contribution.

While this debate continues, the key takeaway is that marketing leaders should approach their budgets with the same rigor and strategic thinking as capital allocators. This means evaluating the long-term impact of marketing initiatives and aligning them with the company's growth objectives.

From tactical operator to strategic growth partner

This is why great marketing managers are closer to general managers than ad campaign coordinators. They forecast not just what will work but when. They know that the hardest part of marketing isn't attribution—it's patience.

The strategic marketing manager brings a dual fluency in hard and soft skills:

Hard skills

Soft skills

The key differentiator? Tactical marketers operate in a 90-day window. Strategic marketing managers stretch capital across multi-year arcs, managing volatility while compounding advantage.

Hire the capital allocator, not the brand babysitter

If marketing is treated as a set of promotions activities, it will be managed for activity. But if it's treated as capital—time-lagged, risk-adjusted, portfolio-based growth capital—it will be managed like a portfolio, not a cost center.

For all executives, whether operating a SME or a Fortune 500, the call is clear: stop hiring optimization only marketers. Hire those who allocate. Look for the ones who treat brand building like R&D and growth strategy like capital deployment.

The future of compounding growth advantage doesn’t sit in the creative brief. It sits in your go-to-market capital allocation.