In a time of budget cuts, interactions between CFOs and CMOs across many companies often resemble conversations on a marriage counsellor’s couch. Marketers are from Venus, finance people are from Mars. Marketers feel misunderstood and underappreciated. Finance people don’t know how to trust or evaluate proposals mired in marketing jargon. The level of foundational understanding that finance has of the role that marketing is playing in driving business value -- contributing directly to revenue – is often lacking. And financial literacy among marketers could be a lot better. This combination of factors does not make for a healthy relationship. And that’s a big problem.
The CFO’s org has become a larger player in driving performance (as opposed to just reporting on it). According to McKinsey, 51% of CFOs now manage corporate strategy, a task central to the CMO. They are increasingly influential in controlling the levers of effective marketing performance, such as data, analytics, and pricing, not to mention the compensation and success KPIs of marketing leaders. Meanwhile, outside the narrow band of categories like CPG or retail (where marketing is still considered to be a main entrepreneurial function) marketing departments in many companies have lost control over product, place and pricing decisions during the past decade, ending up owning only promotion. If this continues, CMOs will lose their ability to contribute to the decision-making strategy. And as a result, organizations miss out on opportunities to create value and growth.
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