The relationship between marketing and finance is arguably one of the most important within any business. Traditionally perceived as an adversarial tug of war between marketing on one side spending the money and finance on the other trying to save it, this relationship has evolved into a modern marriage of equals.
This new look relationship is being forged by closely working teams which possess a shared vision for the business and an appreciation of each other’s specialism.
Closeness very much starts with location and physically bringing marketing and finance together. At job search site Monster there is a dedicated finance partner for marketing who acts as an integral part of the marketing team, helping to add greater clarity from an ROI perspective.
“When I joined Monster one of the things they were struggling with a little bit was that the finance guys could see big costs going into marketing and they were not entirely sure how to quantify the return,” explains CMO Andrew Warner.
“One of the things I’ve found through my career is generally, if marketing build ROI models to prove the value of marketing in isolation, it’s always going to be treated with scepticism. There’s the risk it could sound like marketing saying ‘we’re doing a great job’ and finance saying ‘really?’ So then you end up in a them versus us situation.”
To correct this Monster created a cross-functional team to build the ROI model, with finance at the heart of the process. This was a valuable exercise as it helped finance contextualise the marketing team’s decisions and see them expressed in a data framework that related to the business.
You’re never going to win in a ‘them versus us’ situation, or ‘our numbers versus your numbers’. It’s a very unhealthy relationship to be in.
Andrew Warner, Monster
“Most CFOs want to grow the business and invest money in the right places, so if they can see that there is a tangible value there and understand how that value transpires it helps them make better decisions and they feel more comfortable in dealing with marketing spend,” says Warner.
UKTV went as far as bringing a member of the finance team into their latest media review in order to ensure every department was comfortable with the decision being taken and felt embedded in the process.
Not only did the finance person work through every pitch, she also had an equal voice when it came to choosing a media agency, the same as the director of media or marketing and creative.
“She gave really great insight, she asked great questions and she was a really useful person to have on the team,” recalls UKTV CMO, Zoe Clapp.
“Rather than us coming to finance blank with this list of ‘here’s what we want to do, give us a chunk of money’, finance had been all the way through the process and we found that really helpful. That made us come to a better and more rounded decision.”
Richard Podevin, segment director (EME) for personal care at the Energizer Group, agrees that bringing finance on board at the beginning of any project only helps to simplify the process.
“It makes the work more free and simple. The way I see it, a good finance manager is someone who will make our lives simpler and think about ways to simplify our projects, because the last thing we want is for the financial planning to be a hurdle.”
At Energizer, finance physically sits alongside sales and marketing, putting the team in a central position to support the other business functions. As well as collaborating on the annual budgets, Podevin’s team works with finance on ongoing budget management and the analysis of ROI.
“We work together on a daily and weekly basis. We have a monthly budget meeting where myself and my team meet with the finance managers to make sure that the purchase orders are raised as planned and the plan is circulated as agreed,” Podevin explains.
“I also have weekly cross-functional team meetings, which the finance manager attends, to ensure information is shared within the company.”
Forget ‘us versus them’
The outdated view that marketing and finance are pulling in different directions is something many progressive brands are actively seeking to shake off.
“If you’ve got an adversarial finance versus marketing relationship, and finance ultimately are the people who are reporting on the financial health of your organisation and driving decisions that determine where investment goes and where cuts get made, then marketing is going to struggle,” Warner acknowledges.
“You’re never going to win in a ‘them versus us’ situation, or ‘our numbers versus your numbers’. It’s a very unhealthy relationship to be in.”
First Direct’s head of brand and marketing Zoe Burns-Shore describes the relationship between marketing and finance as one of the “most important and probably most rewarding relationships” in the business. For her putting up a united front is crucial.
“Both myself and our head of finance Carl [Waterland] believe by working together we’re much stronger and much more likely to be able to represent to HSBC – our parent company – what budget marketing needs to support the First Direct business in the most commercial way possible,” she explains.
“It’s working well for us and this united front was really successful in securing the spend for our brand relaunch work which kicked off at the start of September.”
In a similar way to the teams at Monster and Energizer, the First Direct finance team moved to sit next to marketing in a bid to get a real understanding of why it is so important to have the right marketing budget to support the company’s growth ambitions.
“It means on a day-to-day basis finance get a real sense of both the effort and energy that goes into all our activity – from brand right through to the PPC optimisation. They can see the level of planning we put into our activity and how we’re really commercially focused on results,” Burns-Shore explains.
First Direct has taken a cross-functional approach to team structure, rather than focusing on discipline-only silos. This means mixed teams work together on a project, not only from marketing and finance, but also from propositions, digital, IT and legal.
The beauty of financial fluency is that it can be transposed from one company to another. Regardless of the product or the brand, it will always work the same.
Richard Podevin, Energizer Group
UKTV CFO Tom Davidson acknowledges that while traditionally the marketing/finance relationship has tended to have a bit of “healthy tension”, he takes a different approach based on trust and a shared strategic focus.
“You talk to anyone in the finance role and they say ‘oh those marketing guys spend all the money and they don’t think about the bottom line’, which is clearly not true. But there is this prejudice,” says Davidson.
“So it’s our job to break that and say this relationship is based on trusting [marketing] to do their job and be transparent with us when it is done and when it isn’t done.”
Davidson and CMO Zoe Clapp believe it is up to them as leaders in the business to model that trust at their level and then push the message down to the junior members of their teams. Their conversations are less about the nitty gritty detail of spend and more focused on the strategic future of the company, creating a sense of alignment that in turn builds trust.
“I know that when Tom is making financial decisions he’s thinking about what’s the impact on marketing,” Clapp explains.
“Similarly, when I’m making decisions about the marketing budget or the direction we’re going in, I’m thinking about whether that’s a good use of the company’s money. Is that pushing us in the right direction we want to go in? There is that level of trust between us from looking at the company as a whole.”
Learning from both sides
Taking the time to understand how each department functions from a holistic perspective is helping both marketing and finance get better at their jobs.
Learning from finance early on in his career helped Energizer’s Richard Podevin gain insight on crucial commercial aspects of marketing like profit and loss, and profitability, helping him build stronger business cases.
“I think it is really important that marketers acquire those skills both from their educational background, but also from the finance managers in their business. The beauty of financial fluency is that it can be transposed from one company to another. Regardless of the product or the brand, it will always work the same,” he adds.
A collaborative relationship can also help both sides understand the context and constraints affecting how key financial decisions are being made.
“There may be months where cashflow has to improve or there is a number that the business needs to hit. If you’re aware of that then you can propose more thoughtful plans and you’re more likely to get buy in from your organisation,” says Warner.
“A good CMO can play that role, taking a step back and helping to put a strategic focus on things. You’ve got that relationship where marketing has more credibility because the marketing leader is operating in a way that proves that he or she understands the dynamics of that organisation from a commercial perspective.”
Finance have even helped us develop some ‘softer measures’ for work that doesn’t necessarily drive an instant ROI.
Zoe Burns-Shore, First Direct
Marketers have a role to play in helping the finance team better understand the various aspects of marketing, such as the need to take a long-term view on brand investment or consider every decision in relation to the customer.
The fact that the Monster finance team sees marketing as an investment rather than a cost is one of the company’s biggest achievements, says Warner.
“I think we’ve now got to a point whereby not just finance, but other functions, see that marketing plays a key role in terms of aligning marketing metrics with business metrics and that means that as an organisation we are able to be more strategic across all functions and have more of an informed debate about some of the decisions.”
At First Direct, Zoe Burns-Shore has found huge benefit in going through the detail of her team’s activity with finance. She takes part in a monthly meeting to chat through what marketing has spent where and why, which she believes adds genuine value to both teams.
“Since we started doing this finance have even helped us develop some ‘softer measures’ for work that doesn’t necessarily drive an instant ROI,” Burns-Shore explains.
Being exposed to marketing on a regular basis has helped UKTV CFO Tom Davidson better appreciate marketing’s revenue generation potential. He makes specific reference to CMO Zoe Clapp’s idea to open up the UKTV innovation fund to people in creative and production roles, as part of its proposed airtime for equity swap.
“That was the first time I’d seen a commercially proactive move from a marketing department. I was really impressed with that,” Davidson recalls.
From a marketing perspective, Clapp’s close relationship with Davidson has helped to bust some of the myths about what marketing “can and can’t do”, empowering the UKTV marketers to shake off the fear of “what finance might say” and take more risks.
“We proactively brought Tom into our meeting to bust that myth. We’re quite confident with saying ‘have a good solid plan, but make sure you’ve built experimentation into your plans’,” she explains.
“I’m never going to stop you from doing it, Tom would never stop you from doing that either. And I remember one of the phrases that Tom said in the meeting that has absolutely stuck – ‘you guys need to do more crazy’.”
By casting aside the outdated assumptions that marketing and finance are diametrically opposed, brands are finding better ways to create a collaborative business culture that simultaneously fosters creativity and delivers concrete results.
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