CMOs and CFOs in many respects have widely differing views of the value of marketing, finds a new survey [download page] conducted in the UK by Econsultancy, in association with Marketing Week. While it’s understandable that marketers would have more enthusiastic perceptions of their worth than other parties, the findings are a sobering reminder that it’s not only the CIO relationship that needs work.
Indeed, with CMOs feeling the pressure to prove their worth, the gap in perceptions between CMOs and CFOs as to marketing’s value means that there is plenty of work to be done. For example, while about half of the marketers surveyed believe that more than 30% of their organization’s revenues are directly driven by marketing activity, only about one-quarter of finance directors feel the same way. The perception gap is similarly acute when it comes to the percentage of sales influenced by marketing activity: two-thirds of marketers believe that more than 30% of sales are influenced by marketing, while only one-third of finance directors concur.
It’s worth calling it a perception gap, because results from the survey indicate that it really is just that – perception. That’s because 83% of marketers and 76% of finance directors surveyed admit not knowing what the return on investment from their company’s marketing actually is. Also worrisome for marketers: half don’t know (not even approximately) what percentage of their organization’s revenue is allocated to its marketing budget. While finance directors fared better in this respect (one-third have no idea), one would expect that to be the case. As the Econsultancy analysts note, “the results suggest that a significant number of finance directors are assessing the value of their company’s marketing efforts independently of those in charge of running them.”
It’s perhaps no wonder then that finance respondents feel that the most important requirements for the marketing department are understanding commercial objectives and realistic forecasts and projections. From the marketer side of things, the most important requirements for the financial department are understanding the difficulties in measuring marketing (surprise!) and sharing of financial data.
A contributing part of the problem appears to be what Econsultancy deems “differing personalities.” So while marketers tend to see people in the finance department as “analytical/detached,” “consistent/cautious” and “efficient/organized,” finance respondents see those in the marketing department as “outgoing/energetic,” “inventive/curious,” and “easy going/spontaneous.”
Add it all up and it’s clear that there’s a gulf in the perception of marketing’s value. This could be due to marketers overestimating their value, or finance directors underestimating it. But the gap is clearly there. Consider that:
- 84% of marketers agree that marketing needs to grow for the business to grow, but just 47% of finance respondents agree;
- 77% of marketers agree that marketing is a critical function in their business, while fewer (62% of) finance respondents agree;
- 72% of marketers agree that the marketing function is becoming more important to their organization, compared to just 55% of finance respondents; and
- 62% of marketers agree that the marketing function takes the lead in driving innovation within the business, with only around half as many (34% of) finance respondents concurring.
About the only thing that they agree (disagree) on? The finance team’s confidence in the marketing department’s commercial decisions. Only 46% of marketers feel the finance team has it; only 39% of finance respondents agree that they do. Ouch.
About the Data: The results are based on an online survey conducted in October of 171 senior finance executives and 100 senior brand-side marketers on the topic of the value of marketing. All respondents are UK-based.