In November we published our Value of Marketing report, in which we discussed the need for CMOs and CFOs to talk the same language.
The current status quo where finance commands the greatest voice in the boardroom needs to be challenged. Half of the FTSE 100 CEOs have an accounting or financial management background, compared to just 10% who come from marketing or advertising.
However as developments in technology mean that customers have a greater power and choice than ever before, marketers are vital in helping to drive a more personalised, consumer-focused business.
Here is some insight from our report, published in partnership with Marketing Week, and based on in-depth interviews with nine senior brand-side marketers and nine senior finance officers, as well as an online survey of 171 senior finance executives and 100 brand-side marketers.
The need for marketing to become more strategic was emphasised by Centaur Media’s CFO, Mark Kerswell:
Marketing needs to and is becoming more strategic. Sales, digital, marketing – none of these teams can operate in isolation so we’re building the right teams, expertise and communications internally. The bigger picture is around where we should be investing across different channels and that needs strategic marketing input.
Marketers are increasingly valuable to the organisation as a whole. However as much as a marketing team deserves a boardroom seat, it’s very often not the case.
It’s therefore important for marketers themselves to step out of their departments and look at how their skills can impact every team in the business.
Andrew Warner, VP marketing at Monster Worldwide backs this up:
We must be able to illustrate explicitly how the marketing agenda adds value to the business agenda, how it can accelerate the drivers of the business, fits the agenda of the CEO and adds shareholder value. Crucially this all has to be done in a way that finance directors and CEOs buy into, feel comfortable with and ultimately endorse.
We asked our marketing respondents to what extent do they agree with the following statements…
As you can see, although 49% agree that “marketing is a critical function within a business” and 37% agree “marketing is becoming more important to the organisation” there is still a disconnect between marketing and finance. Only 7% have the confidence in the finance department to make good decisions related to marketing.
However, finance directors who took part in the survey do not share the same opinions.
The following is a breakdown of marketing and finance respondents and the percentage of which agreed with the statements.
While 77% of marketers agree that “marketing is a critical function within our business”, just 62% of finance directors feel the same way. Only 43% of finance directors believe that “the head of marketing has significant strategic influence on the business” compared to 62% of marketers.
Clearly there remains work to be done. There is a significant tension and lack of mutual understanding between marketing and finance, which could impede the future of marketing. In particular, the discipline was seen by finance as not having a great degree of strategic influence.
As we stated in the 2013 Modern Marketing Manifesto: “we believe marketers should sit at the board table and help set strategy. If you do not believe your understanding of markets, products, customers and positioning plays a vital role in shaping strategy then you are not a modern marketer.”