The Need for Marketing to Speak from the Financial Side of the Table

posted in: Marketing Strategy | 0

Marketing Return on InvestmentI recently was presenting to a group of CMOs on Return On Marketing Investment and a question came up related to why marketing needed to defend their budget with ROI analysis when they had solid analytics showing their programs were performing. This question started a broader quite lively discussion about accountability and marketing budgets being highly scrutinized.

As a result of the market altering recession, CEOs have turned to their operations and accounting departments for cost reduction and efficiency gains to increase profitability. Although marketing budgets were greatly reduced, many CEOs feel they were unable to count on their marketing departments for measurable results and to demonstrate the return on their marketing spend.

What has emerged is that marketing professionals need to start speaking the language from the financial side of the table: Return on marketing investment and shareholder and stakeholder return. There should be a clear demonstration that marketing is driving growth, share improvement and profitability or return.

As we emerge from this recession CEOs show strong intentions to increase marketing spend in order to drive revenue growth but want to understand how increased spend will contribute to profit growth. As the economy improves the successful attainment of revenue and profit growth will rest heavily with marketing.

The new reality is marketers need to develop a strong understanding of the underlying financial drivers of marketing. This is not without significant challenges, but perhaps the starting point maybe with some basic steps:

  1. Begin to speak the language of the company’s C Suite executives

They understand return on investments, margins, risk and probabilities as long as long as the probability is for positive ROI and profitability.

  1. Leverage your metrics, test, learn and modify

CEOs have a strong understanding of risk.  Marketing needs to demonstrate the processes it uses to measure investments, manage risk and adjust to ensure success. Essentially demystify marketing.

  1. Leverage your accounting and operations groups

Both accounting and operations have their own unique functional expertise that can add new perspectives. Build a collaborative relationship to exchange knowledge, expertise and process input.


Tom Angelis is Managing Partner at Angelis Consulting Group. He brings a unique set of entrepreneurial, marketing, financial, and business process skills. These have been gained through starting his career as a Controller and for the past 25 years as CMO for both entrepreneurial startups and large multi-national companies.