ANA Marketing Accountability Conference: Survey Suggests Finance Skeptical of Marketing-AdAge
Survey Finds CFOs Skeptical of Their Own Firms' ROI Claims
By: Bradley Johnson
July 15, 2008
(Note: Seen also at Big News Network and Argentina Star)
Financial executives don't think there's much truth in advertising.
According to a new study, six in 10 financial executives believe their companies' marketing departments have an inadequate understanding of financial controls, and seven in 10 said their companies don't use marketing inputs and forecasts in financial guidance to Wall Street or in public disclosures.
Moreover, nine of 10 finance executives said they don't use return-on-investment metrics to set marketing budgets in the annual budgeting cycle. (Two-thirds instead take a predetermined percentage of revenue or simply adjust last year's budget.)
The better, news, perhaps, was the venue where the study was being discussed: The Association of National Advertisers' 2008 Marketing Accountability Conference. The fact that the ANA put the study on the agenda at this week's conference is a positive sign that marketers are trying to learn how to work in partnership with finance.
CFOs, CMOs quizzed separately
The research used an online survey of 130 financial executives across a range of industries. More than 80% of respondents were chief financial officers; the study was done as a parallel to an annual ANA/MMA survey of marketing executives.
On the whole, the findings showed that CFOs appear comfortable with how their companies tally up marketing spending: 80% of respondents said their firms have an adequate audit trail for tracking what was spent. And more than four of five firms in the survey had some sort of marketing ROI metrics in place.
The finance study suggests there's a long way to go to win over CFOs, who Mr. Marshall said significantly outrank CMOs in influence at most companies. "Finance is suspicious of marketing numbers," he said.
What do marketing executives say? The good news: Among 128 senior marketing executives participating in the 2008 ANA/MMA Marketing Accountability Survey, 33% reported "full cooperation and an open dialogue" with finance in setting metrics and methodologies for marketing ROI, up from 22% in 2007. Nearly half of respondents reported "some cooperation."
Not convinced? Think of the upside: Maybe the finance department can help develop systems and controls that will make marketing more effective -- and give both the CFO and CMO confidence in the numbers.