Oil and Water.
Marketing and Finance.
The tension existing between finance and marketing is not a new stereotype. However, in the digital age of data-driven marketing, coupled with the lingering effects of economic adversity, it has become increasingly important to ensure alignment between these functions.
Based on research from the CMO Council and KPMG, only 10% of over 275 marketing leaders surveyed strongly believe their current marketing investments position them to emerge from economic turmoil ahead of the competition.
These marketers believe marketing and finance misalignment within their organization has negative effects on collaboration, innovation, agility, and performance measurement.
The Way Forward
Instead of operating in silos, marketing and finance must operate in lockstep. Bridging the perspective gap and creating a culture based on shared goals, data-driven insights, and open communication is key to creating better alignment.
Although marketing and finance tend to attract different types of people, their organizational goals are very intertwined. Finance is responsible for safeguarding and enhancing a company’s financial position, and marketing is responsible for achieving growth through strategic promotional initiatives. At the end of the day, both functions are seeking a greater ROI on the same budget.
The synergy between marketing and finance creates a more innovative environment. With the rise of machine learning and AI, the ability to be innovative is critical. Not only can machine learning help predict disruptions in markets and buyer behavior, but AI and automation can create efficiencies when budgets tighten.
According to a survey conducted by EY, 81% of finance professionals and 88% of those in marketing agree that marketing investments become more effective as a result of stronger collaboration between the two functions. When marketing initiatives are aligned with financial strategy, the result is a powerful growth driver.
Data- Driven Insights
The study conducted by CMO Council and KPMG asked respondents to rank their biggest restraints in creating marketing-finance alignment, and the top hurdle identified was metrics.
As Sylvain Maquet, Consulting Principal at EY, said, “while marketing and finance may be looking at the same data, they aren’t necessarily aligned on the strategic objectives behind such investments or the metrics used to gauge success. Closer collaboration can meld the best aspects of their thinking: the specialty knowledge of connecting with consumers over the long term paired with results-focused efficiency. Getting to a common, proactive understanding about marketing goals and metrics — and therefore the rationale behind investments — will pay dividends now and over the long term.” Agreeing on ways to track and measure performance allows for better investment decisions to be made in the future.
Alignment on KPIs, as well as increased visibility into promotional performance helps finance connect marketing plans with tangible business results. This transparency creates trust, which affects marketing’s ability to make fast and agile investments. Agility, as defined as optimizing and shifting spend in order to achieve desired outcomes, is essential in today’s fast-paced, ever-changing digital landscape. Finance also has direct influence over budget allocations, so having their support is vital for marketing.
While marketing and finance will always have different mindsets, the future of successful companies lies in the hands of those who strategically collaborate, embrace each other’s strengths, and support each other in navigating today’s complex business environment.
Collaboration is the future of sustainable growth. Let us help you bridge the gap.
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