For years, marketers have been fighting the wrong battle.

The argument goes like this: marketing spend creates long-term brand value. Long-term value should be treated as a capital investment, not an operating expense. Therefore, advertising budgets should be capitalised on the balance sheet as assets, just like factories, equipment, or acquired intellectual property, rather than expensed immediately against revenue.

It is a compelling argument. It is also, according to Jonathon Knowles, founder of Type 2 Consulting and one of the most rigorous thinkers on the intersection of marketing and finance, the wrong one to be making.

Brands, Knowles argues, are not assets in themselves. They are multipliers, they accelerate the value of a business model rather than sitting independently on a balance sheet. And cumulative advertising spending, however large, is not a good proxy for what a brand is actually worth. Two companies can spend identical sums on advertising and produce wildly different levels of brand equity. The input does not determine the output.

The accounting debate is real and ongoing. The International Accounting Standards Board is currently undertaking a review into how intangible assets, including brands, are treated, examining whether internally generated intangibles should be allowed to appear on company balance sheets. Under current international accounting standards, they cannot. Marketing spend is expensed immediately. A factory can be capitalised. A brand, however valuable, cannot.

Many marketers believe that changing this would transform how CEOs and CFOs view marketing investment, elevating it from a cost to be managed to an asset to be grown. The logic is seductive. But Knowles argues it is strategically mistaken.

CMOs will find a more productive conversation with their CFO by framing marketing activities in terms of improving the growth, margin, and cash flow profile of the business, rather than in terms of increasing brand value. In other words, stop asking finance to recognise brand as an asset. Start showing finance how brand building improves the metrics they already care about.

The contribution of marketing to commercial value creation is like an iceberg, the visible tip of immediately measurable incremental sales represents only about 10 per cent of the total value. The real commercial value lies beneath the surface in the long-term benefits of brand building that most traditional measurement methods cannot capture.

That iceberg framing is the more honest and ultimately more powerful argument for marketing investment. It does not require a change in accounting standards. It does now require finance departments to reclassify budgets they have managed as operating expenses for decades. It requires marketers to speak the language finance already understands; growth, margin, cash flow, risk, and to demonstrate, with rigour, how brand building improves all four.

For Nigerian CMOs and marketing directors navigating budget conversations with CFOs who remain sceptical of brand investment, this reframe is worth adopting immediately. The fight to capitalise marketing expense is a fight that requires accounting standards reform, industry consensus on brand valuation methodology, and a fundamental restructuring of how finance departments thing about intangibles. It may eventually be won. But it will take years.

The conversation about how brand building improves business performance can happen today. In the next budget meeting. With the numbers you already have.

Stop fighting for a seat at the accounting table. Start demonstrating why the business cannot afford to sit down without you.

ALSO WATCH: MARKETING EDGE ONTV