Tomato, Tomato – Exploring the CMO-CFO relationship in B2B
Any piece written about brand marketing in B2B wouldn’t be complete without mention of the relationship between marketing leaders and their finance counterparts.
Research reports, opinion pieces, whitepapers, webinars, you name it, and every time we talk about brand, we cover the need for increased budgets. If the stereotypes are to be believed, CMOs are the creative thinkers who care more about delivering stand-out campaigns than driving revenue. And CFOs are sensible leaders in charge of the purse strings.
But to what extent do these stereotypes reflect the reality of the relationship between the much-misaligned functions? Has economic uncertainty shaken CFOs’ faith in brand marketing as a crucial segment of the marketing function? And does common ground even exist?
Collaboration, collaboration, collaboration
As an industry, we’ve talked on and on about Sales and Marketing alignment in B2B. It helps lead to better campaign performance, increased revenue growth, and customer experiences that build loyalty in your audience. But alignment doesn’t just apply to those on the front lines – it’s also vital across other business functions.
Despite an ever-growing body of research showing the overwhelmingly positive effects of a holistic approach to short- and long-term marketing, what the Institute of Advertising Practitioners (IPA) call the ‘Board-Brand Rift’ still exists.
Our seminal 'Closing the CMO-CFO brand value gap in B2B' report found that only 32% of CFOs feel the relationship with their CMO is “highly collaborative”. On the other hand, CMOs were slightly more positive with 43% stating that they enjoyed high levels of collaboration with their CFO.
Marketing leaders need to convince CFOs of brand building’s value. An ask made harder given the harsh truth that 55% of CFOs don’t see it as a critical activity of the marketing function. There needs to be a concerted effort to address the uncertainties, misapprehensions, and fixed mindsets standing in the way of greater brand-building investment and therefore, success. But that starts with those at the top.
A question of confidence
B2B Marketers have an uphill struggle on their hands. The buyer journey is more complex than ever, with committees of decision makers spread across remit and region doing more individual research and less talking with sales reps. But with less budget and a growing scope of responsibilities beyond their traditional role, it appears that CMOs aren’t being given their dues.
Just half of the CFOs we surveyed felt only “fairly” confident in their CMO’s ability to make commercial decisions for how and where marketing budgets are spent. When contrasted with the 49% of CMOs who said they were “completely” confident in their CFO’s ability to make the same decisions, we’re confronted with the bleak reality that C-suite Finance leaders are failing to recognise the value CMOs bring to the business and the imbalance of trust in organisations.
A serial lack of confidence – in both brand marketing’s ability to drive growth and profit and in Marketers in themselves – is hampering CMOs’ capacity to fight for greater brand-building budgets. A challenge made worse upon learning that the average CMO’s tenure is at its lowest in a decade.
So, how can senior marketing leaders appeal to and more importantly, convince those across the aisle about the importance of brand marketing in B2B?
Finding common ground before speaking a common language
There’s enough content highlighting the need for Marketers to speak the language of Finance. But perhaps unsurprisingly, there isn’t the same volume of work discussing the need for common ground between the two functions.
We cover the CFO view that CMOs fail to appropriately demonstrate brand’s commercial value in another blog. However, it’s an opinion borne from misaligned perspectives of how and where brand sits in the revenue generation cycle. Difficulties in demonstrating the commercial value of brand, at a campaign level and to a business’ bottom line, are reflected in the areas CFOs think CMOs could improve on for better alignment with the finance team.
Providing more accurate tracking and reporting of brand programme metrics ranks top of finance leaders’ alignment priority lists. Conversely, CMOs feel that CFOs need to demonstrate a deeper understanding of brand marketing goals and strategies.
Put into context, our findings suggest that CFOs want brand to be measured in terms they understand best and not the best terms for it to be measured. CMOs, on the other hand, feel CFOs aren’t doing enough to understand how and why brand marketing exists as a tool for growth, nor the most effective way to measure its impact.
Now, that’s not to say measuring the commercial value of brand isn’t something CMOs should be doing anyway. In fact, it’s quite the opposite. Marketing leaders need to address the reality that they need to be able to demonstrate impact if they want to secure future spend.
But it might be tough when 57% of CFOs believe the optimum period to measure the commercial effectiveness and ROI of brand programmes is between 6-12 months versus the 52% of CMOs who think it should be given 12-18.
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In the end, we need to recognise that educating CFOs on the commercial value of brand is a two-way street. It’s no use rueing the finance department’s refusal to invest more in brand when we don’t have the confidence to tell them exactly how it needs to be measured.
At the same time, CFOs need to compromise on the timescales and methods they use to track and measure brand-building activity. Both functions are looking to drive success within their organisation. We just need a little more give and take.