Published June 24
Judging by how quickly the industry has become laser-focused on “outcomes,” you’d think CFOs have installed a watchdog in every brand’s marketing department, closely watching over the CMO’s shoulder.
But during this week’s Cannes Lions International Festival of Creativity, The Current got a sneak peek at results from a survey by Bain & Company that suggests the CMO-CFO relationship is simultaneously fraught with misunderstandings but has the potential to be much more straightforward than it currently is.
The results are based on a survey, due to be released in the coming weeks, of more than 1,400 senior marketing and finance leaders and qualitative interviews with 20 CMOs and 20 CFOs.
“Every marketer I’ve ever met, myself included, always said that finance is harder on marketing than any other department,” said Brian Dennehy, expert partner at Bain & Company and former CMO at Nordstrom. “The truth is … that finance trusts finance more than anything else, and they mistrust everybody else.”
“Finance and marketing are actually really aligned on key metrics. Marketing’s problem is in the ability to present the impact, and finance is more charitable toward impact than we had anticipated,” Dennehy added.
Let’s unpack that statement in three parts, because it is a summary on making the CMO-CFO relationship work.
First — the metrics alignment
Laura Beaudin, partner at Bain & Company, said that the findings showed alignment on metrics that CMOs and CFOs want to track, particularly return on investment and revenue growth impact — something that may surprise marketers.
Even so, neither party thinks the other is aligned.
“In the qualitative interviews, both the CFOs and the CMOs would say things like, ‘We probably have the wrong objectives,’ but it turns out they actually have the same objectives,” Dennehy said.
Certain industries had unique high-level KPIs — cost of acquisition in credit cards or deal margin in software — but Bain found sales and customer acquisition to be the two metrics that CMOs and CFOs prioritized across all industries.
Second — marketing’s storytelling problem
Marketing and finance keep score with the same metrics. So why can it seem so laborious to get a budget approved?
Turns out, marketers should drop the storytelling cap when conversing with finance. Instead, it is — unsurprisingly — all about the numbers.
“I was always told that marketers have to be better storytellers to CFOs. But finance executives said, almost literally, whatever you do, don’t become a storyteller if you’re a CMO, that is the worst thing you can do,” Dennehy said. “The CFO’s perspective on that is they just want to see the hard data, and they don’t necessarily need to even interpret it, they just need to agree to it.”
“CFOs don’t want to wait for the punch line. One of the things we heard in several of the interviews is, ‘I just want to get to the table that has the metrics that allows me to know, did this do what we wanted it to do,’” Beaudin added. “CMOs can include some of the highlights at the end, but they have to start with the punch line.”
There is still a lot of work to do to convince CMOs to drop the storytelling instinct in the boardroom, given it is part and parcel of being a marketer. But perhaps more than anything else, this one relatively simple change could have massive impact in building a strong CMO-CFO relationship.
“After interviewing one of the bigger CFOs of a consumer products company, he said to me, ‘Look, let’s just be clear, if I believed in marketing’s data, I would throw money at them. I want my company to grow. I want the share price to go up,’” Dennehy said. “And he said, ‘There’s this idea that CFOs are holding marketers back, but I just want to believe in them and invest in them.’”
Third — finance’s understanding of marketing
It turns out finance leaders understand many of the more high-level marketing metrics. They just aren’t convinced by them.
“I was personally surprised by how many CFOs were comfortable with the idea of aided and unaided awareness, pre- and postflight, in media campaigns. They all got it,” Dennehy said.
The issue is finance’s lack of trust in how marketing is measured. Most marketing results as presented today don’t map cleanly to a company’s ultimate objectives, revenue and revenue growth.
“It was interesting to me how little the CFOs wanted to know what the marketing mix was,” Dennehy said.
Instead, the CFOs surveyed wished that marketing would co-create a measurement framework before launching campaigns, “because if marketing comes in and says, ‘We scored on brand,’ and the CFO didn’t know they were scoring on brand, it’s very frustrating.”
Dennehy continued: “We heard a lot of CFOs saying, ‘Sometimes I don’t think the CMO is doing the company’s strategy. They were solving for brand, and it wasn’t a brand year,’ or, ‘They were solving for getting a lot of customers, but our CEO was talking about loyalty.’”
AI is helping. The most sophisticated marketing leaders are now using AI to stitch together disparate data sources, not in marketing mix models but in more holistic aggregations of business outcomes with marketing activities and spend.
“Leading marketers are stitching together their data and working directly with finance to make it flow through systems all the way to sales. It’s a fundamental shift that I think will be differentiating leaders very quickly,” Dennehy said.
Another finding: CFOs can actually be flexible when it comes to investing in branding — as long expectations and goals are set and agreed beforehand.
“Finance does appreciate that sometimes you need time to see the returns of the investment, probably better than most marketers have given them credit for, over the long term,” Beaudin said. “They know that if we’re making a brand investment, I shouldn’t expect to see that in sales next week.”
Trust in the relationship
If this all sounds like finance encroaching on marketing with guardrails and directives, the opposite is actually true.
“What finance really didn’t want was for them to write the marketing strategy,” Dennehy said. “They were nuanced in saying, ‘My job is to allocate capital at the company; that person’s job is to run marketing.’ They want to be aware of what this strategy is, but they don’t want to run it or control it. They want to run and control the money.”
If there is one sentence that encapsulates how CFOs feel about CMOs, it’s this: “I don’t think about marketing as being any different than any other function. I don’t care about them. They just have to live up to their own budget,” Dennehy said.
Both the marketing and financial sides are tasked with growing revenue sustainably. Rebuilding their relationship could expose how they’re natural partners.
“I think CMOs are easy for CEOs to fire when sales are missed. It’s the easiest person on the C-suite to go after,” Dennehy said. “One of the things I wish we would have gone after is CEOs’ perception of marketing, because I think CEOs think short term. There are very few who think really, really long term.”
