By Jill McCubbin

When building a business, which comes first – promotion or profitability? gold%20egg%20in%20nest
This is not a version of "the chicken or the egg" question.

Indeed, Roy Young, co-author of Marketing Champions and president of MarketingProfs, in a Dec 2007 podcast conversation with Jennifer Jones, uses business language to describe promotion and marketing. Roy says marketing produces cash flow in the short term and identifies sources of cash flow over the long term.

Yet many businesses struggle to determine how marketing and promotion affect profitability and often flounder when faced with tough budgeting decisions.

In truth, a business enjoys profitability when a reasonable promotional effort is maintained. If that sounds unconvincing, you need to understand this triumvirate: innovation, profitability and promotion. MarketingProfs summarize words of wisdom from Olivier Blanchard’s Brand Builder blog, in the MarketingProfs Small business Get to the Point newsletter: "Playing it safe spells brand erosion and less profit."

Once a business lets either (or both) innovation and promotion drop, future profitability is at risk. Olivier Blanchard says, "Don't settle for being reactive when you should be proactive." If your company is not visible in the marketplace, competing businesses will get ahead and establish leadership – even if the products they promote are second-rate. Once your company lags in the marketplace, it's often too late and too costly to start implementing catch-up marketing and promotion strategies.

By using evaluation systems such as Google Analytics, a company can calculate the return on investment of its promotional expenses (for acquiring online product reviews for example) by monitoring the number of new referrals that come to its Web site.

Marketcircle CEO Alykhan Jetha (AJ) agrees that PR gets results. With help from the market2world communications team, Marketcircle recently won three international awards - US Macworld's 23rd Annual Editor's Choice Award (EDDY), European IT Enquirer's Golden Cube Award of Excellence for Business Applications and UK MacUser Magazine's Best Business Software of the Year Award - for its Billings time-tracking and invoicing software. Marketcircle's proactive, ongoing promotion and product launch activities contribute to its successes. Many successful developments are reported in AJ's blog.

With growing global competition in every industry, no business can afford to work "in the basement" away from the eyes and ears of its customers. Explore market2world’s client list page. Our clients invest in visibility and innovation, and in many cases their growth tells the success story of their marketing investments.

(Jill McCubbin is a Communications Architect with market2world communications inc., Canada's Web 2.0 tech PR and product launch agency.)