Beyond cost management: How CMOs and CFOs can unite
Opinion
By creating a more collaborative relationship, CMOs and CFOs can dispel misconceptions around marketing and establish clear, shared objectives.
Economic downturns put even the most lucrative businesses into survival mode. Often, the marketing department is the first and most significantly impacted for three reasons.
First, a siloed marketing function struggles to gain understanding and buy-in from other departments. Secondly, a lack of collaboration negatively impacts the department’s strategies. Thirdly, a misunderstanding of metrics fails to support wider business objectives.
As marketing budgets are slashed, KPIs and objectives often remain the same. This puts immense pressure on chief marketing officers (CMOs) to do more with less.
But these dynamics can be addressed by establishing a more transparent, collaborative and value-driven relationship between the CMO and chief financial officer (CFO). Doing so will result in clearer objectives, a refocus on the metrics that provide real insight and, ultimately, a more cohesive understanding of budget requirements relative to resource, existing skills and expected performance.
The data divide
The perception is often that marketers don’t fully understand which metrics support wider business goals, so they resort to “vanity metrics” — those that look good on the outside but have little value when examined further.
In fact, this is seldom the case. Marketers are acutely aware of how their work supports the wider business. Yet, they have to deal with requests from other departments via a “more data, the better” approach that fails to connect the dots between campaign metrics and tangible business results. In turn, a marketer’s ability to form a compelling narrative to educate the broader business becomes more challenging.
CMOs need to take a step back from these requests and be allowed the flexibility and investment to present a comprehensive business response. Only after this is achieved can the correct decision-making be made on budgets and resources.
ROI redefined
The CFO understands, perhaps better than anyone within the organisation, how the brand is performing from a financial standpoint, what needs to happen to ensure growth plans are met and what key challenges will need to be addressed to ensure operational resilience and brand strength going forward.
This is where transparency is crucial for determining how effectively the marketing function can support wider business objectives. The CMO and CFO need to speak the same language, guiding each other on the role marketing can play in wider business outcomes.
Technology investment
To change the way a brand uses data and measures metrics, marketers need to be supplied with the right tools for the job. This is where AI should come into the equation — Adludio’s recent Decoding Advertising’s Efficiency Illusion report revealed a key blocker to AI adoption lies in wider business buy-in (32%) and lack of resource (34%).
This highlights an opportunity for both the CFO and CMO. AI can make the lives of marketers much easier by supercharging the day-to-day tasks of monitoring performance, interrogating data models and gaining actionable insights. The technology removes the reliance on data teams, freeing up resources that will help counter the steep slashing of overall marketing budgets.
And it’s not just the efficiency benefits of AI that should be lauded. AI-enabled advertising and marketing platforms paint clear, data-driven pictures of performance, enabling the CMO to enter the boardroom with a breakdown of what’s working, what isn’t and what can be improved — and, most importantly, why. Presented correctly, AI can help CMOs take strides in gaining confidence and trust from other departments, increasing buy-in as a result.
Of course, the benefits of emerging AI platforms can only be utilised if they are invested in — something that our data reveals is not the mindset of the CFO in roughly a third of brands. This is where collaboration comes in: the CFO needs to be in a position to trust the CMO’s request for AI investment, which will benefit the department’s ability to perform in line with wider business objectives.
Future-proofing strategies
Realigning data measurement tools, specifically by empowering the marketing team with AI and adopting a transparent, collaborative approach to metrics, are two surefire ways to produce a clearer brief for marketers and more accurate resource and budget allocations that appease both the CMO and CFO.
This collaboration is not a one-off exercise. Our rapidly changing environment requires flexibility from the CMO to adjust campaign strategies quickly, leveraging new tech-enabled platforms to guide them efficiently through changes to stay responsive to the market.
When it comes to the success of the marketing department, collaboration between the CMO and CFO must be a continual process, as must investment into new marketing technologies. The victors in the digital advertising battleground are those empowered by the best technologies. Combining powerful platforms with the strategic talent and creativity of marketers ensures a competitive advantage.
When the CMO and the CFO are united, with a common view of the business and the impact that marketing makes, this can be a top-line revenue-supporting conversation, rather than just a bottom-line cost-management conversation.
Chris Allan is CEO at Adludio
