The relationship between marketers and finance teams is often fraught with tension, particularly when it comes to budget justification. While marketers focus on long-term brand-building and customer engagement, finance leaders prioritise measurable returns and cost control. This dynamic can lead to difficult conversations where marketing spend is viewed as a cost centre rather than an investment.

This article was inspired by a recent conversation I had during the CMO Therapy Podcast, where we delved into the dynamics of marketing and finance collaboration.

So, how can marketers shift this narrative? By building collaborative relationships, speaking the language of finance, and leveraging frameworks to measure and communicate value. Here’s how.

1. Understand the CFO’s Perspective

To build a productive relationship with finance, it’s crucial to understand their priorities. CFOs and finance teams focus on ensuring the company’s financial health, which often involves defending numbers to boards and investors. Marketing spend, especially in areas like brand awareness or content creation, can seem intangible or high-risk to them.

How to Shift Perspective:

Recognise that the CFO’s role is to justify the company’s financial decisions. When they challenge marketing budgets, they are preparing for their own accountability.
Frame marketing as an ally to finance. By presenting collaborative solutions, marketers can position themselves as partners rather than adversaries.

Action Tip: Schedule pre-meeting discussions with finance leaders. Align on goals and data before entering group settings like leadership meetings, ensuring you present a united front.

2. Collaborate to Define Metrics

One of the most effective ways to align with finance is to collaborate on defining the metrics that matter. Finance teams excel at measuring and forecasting, making them valuable partners in determining how to assess marketing’s impact.

Start with These Steps:

Map the Data Gaps: Identify the metrics that are easy to track (e.g., lead generation) versus those that are harder to measure (e.g., brand sentiment).
Seek Input: Ask finance to help solve challenges around intangible metrics. For example, how can brand awareness be linked to measurable outcomes?
Co-Create the Narrative: Develop a shared story for the board or investors that explains both tangible and intangible results.

Example: A CMO might say, “This strategy will impact brand sentiment, which is traditionally hard to measure. Can we work together to decide if it’s worth investing in external surveys or third-party tools to quantify this?”

3. Speak the CFO’s Language: Brand Valuation

Many marketers are unaware of accounting standards like ISO 10668, which governs brand valuation. This framework aligns marketing activities with financial reporting, making it easier to demonstrate the economic impact of brand-building efforts.

The Three Approaches to Brand Valuation:

Cost Approach: Calculates how much has been spent to create or replace the brand.
Market Approach: Compares your brand’s value to similar brands that have been sold, licensed, or traded.
Income Approach: Measures the economic benefits (e.g., cash flows) the brand is expected to generate.

Action Tip: Discuss with your CFO which valuation method your company uses. This conversation can guide how marketing activities are measured and prioritised.

Pro Tip: Visit resources like Brand Finance to deepen your understanding of valuation methods. Presenting this knowledge positions you as a strategic partner in financial discussions.

4. Justify Long-Term Investments with Realistic Narratives

One of the biggest challenges marketers face is proving the ROI of activities like content creation or brand awareness campaigns. While these efforts often yield long-term benefits, they can be difficult to measure in the short term.

Strategies for Proving ROI:

Competitor Comparisons: Show how competitors’ brand-building efforts have driven tangible outcomes, such as market share growth or improved talent acquisition.
Case Studies and Testimonials: Use customer stories and third-party validation to illustrate the impact of your campaigns.
Scenario Planning: Work with finance to develop models that predict how brand investments will affect metrics like customer lifetime value (CLV) or cost of acquisition (CAC).

Example: Highlight that strong brands reduce marketing costs by improving customer retention and increasing word-of-mouth referrals, as supported by McKinsey research.

5. Build Relationships Early and Often

Collaboration between marketing and finance shouldn’t start and end at budget meetings. Strong relationships are built over time and at all levels of the organisation.

Practical Tips:

Start Early: Don’t wait until you’re a CMO to collaborate with finance. Begin building these skills and relationships as a marketing manager or director.
Regular Check-Ins: Schedule recurring meetings with finance counterparts to discuss results, refine metrics, and align on priorities.
Demonstrate Transparency: Share wins and challenges openly, reinforcing trust and mutual accountability.

Key Insight: When finance and marketing work together to define metrics, it creates a shared sense of ownership, reducing defensiveness in budget discussions.

6. Reframe the Narrative Around Marketing

The perception of marketing as a cost centre can only be changed by reframing the narrative. Highlight how marketing drives business value, from revenue growth to operational efficiencies.

Highlight Marketing’s Impact:

Revenue Drivers: Demonstrate how campaigns directly contribute to lead generation and sales.
Operational Efficiencies: Show how strong brands reduce costs, such as lower recruitment expenses or higher retention rates.
Strategic Benefits: Link brand strength to attracting investors, entering new markets, or achieving premium pricing.

Pro Tip: Frame marketing as an investment rather than a cost. Use language that resonates with finance, such as “asset creation” or “revenue enablement.”

The Payoff: Alignment Leads to Better Results

When marketing and finance align, the entire organisation benefits. Marketers gain clarity on metrics, finance teams better understand the value of brand-building, and leadership can make more informed decisions.

Key Takeaways:

Build collaborative relationships by aligning with finance on metrics and goals.
Use frameworks like brand valuation to demonstrate marketing’s financial impact.
Reframe marketing as an investment in long-term growth, supported by data-driven narratives.

By approaching finance as a partner rather than a challenger, marketers can transform budget discussions into strategic opportunities, ensuring their value is recognised at every level of the organisation.

Citations

McKinsey & Company: “The Value of Brand Building”
Brand Finance: “ISO 10668 and Brand Valuation Standards”
Harvard Business Review: “The CFO-CMO Relationship: Bridging the Gap”

Musings

How Marketers Can Collaborate with Finance to Justify Spend and Prove ROI