Zach Morrison, CEO and a member of the board of directors for Tinuiti, breaks down why today’s heads of marketing and finance need to be on the same page if they want to drive growth.
Clients have often heard me say, “If the chief marketing officer is coming to the meeting, the chief finance officer has got to be there too. Because if not, we're not going to make any progress.”
I’m the CEO of one of the largest independent performance marketing firms. We are not just an advertising agency. We are marketers, of course, but we are also data scientists and business-minded quants. Ours is a yield business: You put in a buck; you get two back.
In the world of digital transformation, it is increasingly important that the CFO understands the power of marketing as a growth driver, not as a cost center. And that means they need to be in sync with the CMO.
If the CMO is coming to the meeting, the CFO has got to be there too. Because if not, we’re not going to make any progress.
We’ve all heard that CMOs have the shortest tenure in the C-suite. But not many people know that CFOs have the second-longest runs after CEOs. As marketing becomes more about lifetime customer value, CMOs need time and agility to succeed, and with CFOs at their side, this becomes possible. Together, this duo can make the case for the investments needed to allow for maximum growth and innovation.
Meet the new power couple
It’s an old trope that marketers are fuzzy-headed creatives and the finance team is a bunch of bean counters, that one is a cost centre and the other a cost container. In today’s world, they understand the value of one another’s roles, as well as the role of performance marketing in driving everything from brand growth to sales to ROI.
Tinuiti partnered with E.L.F. Cosmetics in 2019 to manage its digital strategy. We instituted a holistic approach to paid media, segmenting audiences, and leveraging data-driven attribution within Search Ads 360 to ensure E.L.F.’s campaigns delivered the right message to the right users at each stage of the consumer journey. This resulted in strong double-digit growth in revenue, return on ad spend, and conversions on ElfCosmetics.com.
Foundational to this success? The shared vision of E.L.F.'s CMO Kory Marchisotto and CFO Mandy Fields, who describe themselves as a “power couple.” Marchisotto says that much like the brand’s primer and concealer, the CMO and CFO achieve far greater impact when working together: One lays down a smooth canvas, allowing for the other’s optimal performance.
“From strategy to execution, we are always in lockstep,” said Fields. “That is true for both short-range and long-range planning.”
Together, Marchisotto and Fields achieved exponential results, driving maximum impact for E.L.F. The company’s continued outsize performance illustrates the enduring strength of the CMO/CFO power couple.
“Our strategic alignment is fundamental,” said Marchisotto, adding that they both believe that “the real value is in the long game.”
The right people in the room can unlock opportunity
Digital marketing is measurable, accountable, and predictable — three words the CFO lives and breathes. Having their alignment is often the key to unlocking funds and the catalyst for digital transformation, empowering the CMO to make bolder decisions.
One of our most successful clients is Etsy, whose CMO Ryan Scott partners closely with the finance team and data scientists at the onset of building a campaign strategy. This allows for quick decision-making on how investments should grow as programs scale. Teams align on performance expectations and build systematic test plans, which enables them to take advantage of the rapidly changing e-commerce landscape.
“We develop a full, incrementality-testing road map to continuously measure the true value of our media tactics,” said Scott. “This allows us to allocate budget most effectively to our channels driving the most incremental value on the business.”
Etsy’s attribution model incorporates customer lifetime value, which it feeds directly into Google conversion tracking, so bidding algorithms can go after the most promising customers in real time. Incrementality testing enabled my firm to scale nonbrand SEM and social efforts, effectively uncovering any additional growth tactics that this attribution model might miss. We also partnered closely with Google to run sophisticated geo experiments that measured the incrementality of different tactics. By suppressing our ad spend in specific test geographies, we were able to measure the uplift and define a true incremental value of that media.
None of this could have happened without an agile CMO/CFO relationship. With proven incrementality and finance on board, my firm was free to jump on new opportunities without the unnecessary delay that often hinders growth. This is the boring stuff that happens behind the scenes but that ultimately contributes to successful campaigns.
Set growth goals, not budgets
The traditional CMO is slowly but surely being replaced by the chief growth officer, responsible for not just brand awareness but ROI. Likewise, the CFO is increasingly evolving into a chief revenue officer, not simply forecasting revenues but helping decide how to grow them. In other words, both are accountable for converting the company’s actions into predictable and scalable revenue through the right media mix model.
Multichannel attribution is how CFOs and CMOs can find a shared language for how to accelerate growth and clarity on how much to spend. This weighted approach assigns a percentage of revenue across channels, allocating credit to each. CMOs get proof that increased spend will increase sales, and the CFOs gain certainty that the cash register will go “cha-ching.”
The truth is that indiscriminately capping the digital marketing budget needs to be a thing of the past. Why would you ever set a cap on your revenue or growth?
Multichannel attribution is how CFOs and CMOs can find a shared language for how to accelerate growth and clarity on how much to spend.
As we brace for the death of the cookie, an IDFA-less future, and OTT everything, how companies reach and grow customers is only going to get more complex. The CFO has to understand marketing; the CMO has to understand finance; and everyone has to understand data.
Working as partners, the CMO and CFO will not only be the most powerful duo at any company. Theirs will be the brands that thrive.