If you’ve read some of our articles on attribution or analytics, you’ll know that we’re extremely focused on ad spend performance and ROI. In fact, a report we just sent to a tourism client focused squarely on the most important metric – cost to book a room. In our mind, this is the ultimate figure that can make or break a campaign.
The Disconnect Between Finance and Marketing Teams
When everything we do revolves around spend (and performance) we know that people outside the marketing department are watching closely. Namely, the finance people. To them, marketing is a mystery. It’s a line item on a P&L which they may not be able to directly attribute to the bottom line. So, they question budgets and campaigns. And rightfully so.
But that shouldn’t be the case. As stewards of brand growth, customer traffic and sales, marketing plays an enormous role in the bigger picture and not only should other departments know about it, they should be involved. Primarily, the finance department should have a clear understanding of what marketing does, how it evolves, and most importantly, what the outcome will be.
With that said, we’re firm believers that the finance team shouldn’t be a department down the hall or even in a different building. Instead, they should be sitting right next to the marketing team, listening and participating in the strategy, and planning and developing marketing initiatives.
Reasons Why Finance and Marketing Should Collaborate
1. Finance gains vital knowledge of what the marketing team is doing. This provides a deeper understanding of how marketing impacts the brand’s bottom line and revenue.
2. Seeing the inner workings of marketing provides finance people the backstory to why certain decisions are made. This can potentially prevent many unnecessary conversations.
3. If finance is part of the process on day one, the walls are torn down. Everyone starts on the same page, and implementation becomes exponentially easier.
4. Often finance holds the keys to sales figures, sales volume by customers, and customer value. Putting marketing and finance together, with the former sharing such key data, improves budget management and ROI predictions.
5. It’s a two-way street. Marketing can learn a tremendous amount from finance with regard to margins, acquisition goals and critical sales data. Marketing might even learn new ways to approach campaign budgeting.
6. Finance learns from marketing who the customer truly is by putting a face on those who buy the product. They learn about their interest and desires, versus only looking at them as a dollar sign or profit margin.
7. Marketing will no longer be a P&L line item or “investment.” Instead, it will be recognized as a profit center moving forward. That new found identity will open opportunities and reduce pushback from outside the marketing team.
8. Marketing learns to talk like a CFO, which is often what clients want to focus on and ultimately discuss. For example, that means understanding patients acquired and revenue per patient, versus just looking at visitors and sessions. Or looking at cost per legal case opened versus just the expense to deliver a campaign.
Marketing is one of the most actively changing industries that exists today. So, it’s imperative that evolution and growth be on everyone’s mind. A major way to do so is invite the finance department to your next strategy meeting. Even ask the CFO to assign a designated finance person to the marketing team. While it’s easy to think of the finance department – or any other department for that matter – as someone who will get in the way, the reality is just the opposite. Sitting together as one team will break down walls, speed up communication and open a world of knowledge and ideas.
Morgan & Co. is an ad agency specializing in audience, media strategy and analytics. Want to learn how our team works with our clients’ finance departments to improve communication and performance? Connect with us!