A century after merchandiser and advertising expert John Wanamaker died in 1922, modern technology should have made his next maxim clear. The problem is I don’t know which half.
Perhaps his CFO would have welcomed an answer, too. Today, mainly due to the widespread use of digital marketing, it is possible to thoroughly analyze the uncertainty surrounding the whereabouts of marketing costs and the effectiveness of a company’s numerous marketing campaigns.
According to The CMO Survey, spending on digital marketing accounts for 57% of marketing budgets and continues to grow, with a large amount of information about prospects, customers, and their behavior when interacting with websites, social media, and advertising. data points are open. However, a disconnect continues in many companies, as CFOs and chief marketing officers (CMOs) look at different metrics, pursue different goals, and often have cracks in budget time.
CFOs can no longer afford to overlook this gap. According to his Gartner survey of his CMO and marketing his leaders in 2022, the marketing budget takes up more space, accounting for his 9.5% of the company’s total revenue. How can the CFO be confident in allocating the marketing budget and the return on investment from the dollars the CMO plans to spend?A lot depends on the power relationship between the CFO and his CMO and these It depends on whether two senior leaders can have the same perception. Fortunately, the plethora of available data helps.
The disconnect between CFO and CMO
As long as the trope continues that all CFOs are bean counters tightening their belts, so too will the view that many CMOs spend big bucks with little accountability. In practice, these two roles are usually more strategic and complex than that. Both work toward the common overarching goal of corporate success, but their interpretations of what success means and how to get there can vary greatly. It is the data that can align these senior leaders, and there is no shortage of data today.
In fact, most companies are data rich but intelligence deficient (sometimes called DRIP). This is because, thanks to the rise of digital and direct-to-consumer marketing, our ability to measure marketing performance has never been better. More intuitive use of customer relationship management systems. DRIP companies should get to work determining which data is most relevant and impactful to their business, if the CFO and her CMO can get in line.
enter the same page
To deepen mutual understanding, bridge rifts, and ultimately agree on the most relevant data, CFOs should take the following steps:
1. Build trust. In many ways, the CFO’s trust in the organization is what the marketing organization can do within budget and with the primary mission of generating revenue. Does the company believe in its marketing organization and its ability to create value? and fosters a contentious relationship between finance and marketing departments.
2. Understand your CMO’s priorities and make sure they understand your priorities. Marketers are held accountable from the start and media of customer acquisition cost, total marketing revenue, customer profitability, impact on existing customer retention/customer lifetime value, marketing return on investment, or advertising spend We pay attention to many factors, such as the rate of return. Understanding what CMOs are paying attention to and why can help move the conversation toward how to connect metrics to the company’s larger strategic goals.
3. Determine your measurement approach. There are marketing attribution solutions that determine exactly which digital marketing activities lead to conversions (i.e. prospects reach out to your company and eventually become customers). The CFO and CMO, based on their respective expertise and with the help of the Chief Information Officer, can work together on the selection of such systems or agree on specific approaches to understand what drives sales. , can reach agreement on marketing effectiveness.
Ultimately, finding common ground requires an on-target conversation. This important step can start with the CFO.
Fred Ehle is Vice President of the Marketing Solutions Group. rose ryanis a ZRG company that provides on-demand financial, accounting and marketing leadership and consulting services. He previously led marketing organizations at Jockey, Redbox, McDonald’s, and his PulteGroup.