06/13/2023
Marketing is underfunded because the CFO doesn't believe the spending is indispensable.
Indispensable means "Absolutely necessary."
Are all the campaigns you're running "Absolutely necessary?"
How did the event sponsorship add quantifiable value?
The CFO's job is to spend money, but when the economic conditions change, and they need to make "absolutely necessary" adjustments to protect the business, more often than not, marketing finds itself with less.
Why?
1) P/L Literacy
2) Short-term demand capture vs. Long-term demand generation
3) Confidence
4) Alignment with business objectives
5) Proof
Here are a few ideas on how to move from "cutting table" to indispensable.
1) Learn to read a P/L and add value to financial discussions. Revenue per employee, profit per employee, burn rate, EBIDTA, cost of sale... All of these are derived from the P/L, and it's critical marketing leaders look beyond the typical advertising metrics and look at the health of the business the in a similar way to an investor and CFO. They are your audience, learn their pains and speak their language (marketing 101).
2) Stop calling your digital advertising "Demand Generation." Most companies incorrectly lump their short and long-term marketing investments into the same bucket and call it "demand gen." If you're thinking like an investor. Short-term investments like "PPC" and "Paid Social" help accelerate or maintain growth rates for the "in-market" prospects. Long-term investments in things like "SEO" or "Content Marketing" or "Communities" need to be looked at and judged with different metrics. When lumped together, it becomes easy just to say, "There's no budget for that," since marketing didn't communicate the reason for the investment.
3) Tie your short-term campaigns and long-term programs to the business objectives. Have elements that are tied to the 3-year plan but reviewed continuously. Be willing to kill your favorite initiative or pivot as the business objectives change. Proactively tell your CFO, board, and leadership the changes you are making and why.
4) Prove it! CFOs and investors love data and proof their money is being invested wisely. For years, CPG companies have been using Marketing Mix Modelling and regression testing to prove the impact of R&D, Advertising, market research, and overall GTM health. Companies like ProofAnalytics.ai are making this same methodology accessible for a fraction of what it used to cost. Invest in yourself and the business and make a tool like Proof part of how you look at performance.
5) When you can "Prove" how your investment is likely to perform against multiple economic factors and model the returns, confidence in you & your team will greatly improve. Couple this with thinking like an investor, being financially literate, and tying programs back to the business objectives, and you'll see a marketer who's truly indispensable for their company.
Are you indispensable?
