Marketing and Finance: The missing link in your business strategy
We’ve all heard the phrase “opposites attract.” While it may ring true when some describe their romantic lives, it is typically disproved in professional settings…especially when we consider the tenuous relationship between marketing and finance.
Think about the last time you had to justify your investment for performance marketing. It wasn’t so difficult to make the case, right? That’s because finance teams are numbers-driven, and performance marketing is relatively easy to connect to specific results and outcomes. Brand, on the other hand, has always been in its own black box and, in turn, has felt intangible and difficult to measure. While marketing leaders know brand is crucial to long-term growth and differentiation, finance leaders need more tangible proof.
Enter Predictive Brand Technology (PBT) which applies AI computation to big brand data to deliver real-time, actionable insights for brand decision-makers and their finance team counterparts. Using PBT, marketing leaders have the unique opportunity to close this knowledge gap outlined above to create greater alignment with their finance peers. The benefits of doing so are significant: the highest-growing companies are aligned on how they measure the impact of marketing, and 83% of marketing and finance leaders agree that their company’s marketing would be more effective if the two teams were more closely aligned.
How do marketing and finance work together?
Marketing and finance leaders have to sit at the same planning table…but that doesn’t mean they always see eye to eye. A lot of the disconnect is fueled by the different ways they prioritize investments and measure success.
Marketers, especially those on the brand team, typically lean into futurism and like to explore how their consumer and industry may change in five, even ten years. Their peers in finance, though, are often biased to the measurable and the now. In a perfect world, these vastly different outlooks would create perfect balance–but that’s rare.
The role of marketing
Marketing is what makes brand equity, and the resulting increase in revenues and enterprise value, come to life. Whether they’re selling socks, salsa, or software, marketing designs multichannel experiences that support consumer education and empowerment. Through consistent engagement and communication across a multitude of channels, marketing guides consumers through the decision journey–from initial awareness to consideration, conversion and ongoing re-engagement.
Best-in-class marketers are storytellers. Big thinkers. Educators. And most of all, advocates for the customer. That is why marketing leaders and CMOs aren’t just thinking about new and exciting ways to build brand buzz now. They’re focused on creating positioning that builds trust, generates demand and ultimately creates long-term value for the business, even when it’s hard to measure.
The role of finance
In its 2021 C-suite study, IBM characterized the CFO as the executive charged with “maintaining stability, fiscal soundness, and adherence to standards.” It’s no surprise then that 57% of CEOs believe the CFO is “mission-critical” to their business, and that they will remain the most crucial leadership role over the next two to three years.
Despite the stereotypes of CFOs being rigid and risk-averse, they are the most aligned with the CEO and board of directors. They have credibility and have formed trusting relationships with these parties, which means they’re also powerful influencers and gatekeepers of budgets. That’s why, now more than ever, CMOs need to extend an olive branch and find common ground with their CFO colleagues.
How to get the most of marketing and finance
Because CFOs are so focused on squeezing the value from company investments, they often are at odds with their marketing colleagues who are passionate about exploring what’s new and what’s next. CMOs and their teams are programmed to take risks. To think about the big picture of the brand and how it shows up in the world. Their mission is to find new, brilliant ways to connect with their customers.
To successfully innovate and differentiate in an increasingly crowded market, marketing teams need support from the CFO – not just monetary support, but collaborative support, as well. And to do this, these two very different leaders need to understand how their priorities align, and how they can collaborate to communicate the impact of marketing.
Understanding the link between marketing performance and financial impact
Despite their differing priorities, most marketing and finance leaders (83%) agree that their company’s marketing activities would be more effective if their teams were more closely aligned. To achieve this level of alignment, marketing and finance need to follow the same North Star – the brand promise and value a business provides to consumers, partners, shareholders and even employees.
By aligning on a shared vision, marketing and finance can develop a common set of objectives centered on serving the customer and growing the business. Once these objectives are set across different marketing functions and disciplines, both parties should align on key metrics and measures for success to ensure accountability and transparency. After all, C-suite leaders at the highest-growing companies routinely agree on marketing metrics (79%)–a fair amount more than lower-growth companies (55%). At BERA, we believe this is the foundation for effective collaboration between marketing and finance.
Performance marketing and finance
Performance marketing’s ability to drive everything from brand awareness to conversions and purchase makes it a favorite for KPI-minded marketing and finance teams. By contrast, CFOs are often skeptical of marketing teams who focus primarily on what they perceive as unmeasurable brand building. They prioritize bottom-line results with a tangible impact on the business growth. In the words of a recent Forrester report, some CFOs “abhor the intangibility of brand.” But without the proper balance with brand-building, performance marketing can become short-term oriented, relying on special offers and discounts to juice near-term revenue, often at lower margins. Like a lot of immediate gratification, this has its drawbacks, namely in the form of erosion of brand equity. When implemented properly, however, brand building not only influences long-term value, it also paves the way for performance marketing to activate purchases tomorrow and today. Predictive Brand Tech removes the guesswork, providing CMOs and CFOs with insights for optimized audience prioritization and positioning strategies that align short-term and long-term goals.
Marketing and finance
As marketing and finance work together to establish goals, measurement strategies and KPIs, they can use BERA’s PredictiveTech Brand platform to prioritize metrics and audience that tell a compelling story to the CEO and board of directors. A story that validates how investing in brand and marketing can lead to a financial impact.
- Increased attributable net profit from faster brand growth
- Cost-savings from eliminating marketing activities that don’t contribute to brand equity
- Productivity gained from increasing marketing efficiency
Using BERA for measuring brand marketing and financial performance
While marketing often prioritizes brand building and awareness generation, finance often gravitates towards proven tactics that drive quarterly outcomes. But organizations need both to succeed. A full-funnel approach, measured using specific KPIs and shared across functions, will keep leadership aligned on goals and ideal outcomes.
Sign up for a demo to see BERA’s platform and insights in action. And if you want more insight about how you can bridge the divide between your marketing and finance teams, download our Industry Insights report now.