Marketing accountability continues to be a hot topic. The reality is that there is a lot of talk, but not an equivalent degree of action. Consider a recent study by the CMO Council that found less than 20% of top technology marketers surveyed had developed "meaningful, comprehensive measures and metrics for their marketing organizations." The last major study on marketing ROI found that 68% of marketers were unable to determine the ROI of their initiatives.
While marketing accountability is a priority, these studies send a clear message: We're not there yet. With all of the recent buzz over marketing ROI, the truth is, it is not necessarily the most appropriate metric for every marketing initiative. While determining marketing ROI is ideal for large initiatives and initiatives where it can be easily determined, such as direct mail or online marketing, it can be complex and cost prohibitive process to accurately determine marketing ROI on small offline branding campaigns. Don't get me wrong, marketing ROI is the ideal measure, but it can be costly to properly implement. The majority of CFOs will agree and want to set thresholds for when marketing ROI is used as a measure of effectiveness.
The real bottom line is that CMOs need to sit down with CFOs to determine the appropriate marketing measures and who is best suited to monitor these measures. In 2002, I provided the keynote presentation for IQPC's "Measuring and Ensuring Return on Your Marketing Investment" and recommended that CMOs work in cooperation with CFOs to determine the appropriate marketing measures. Further, I suggested exploring whether it may be most effective to have a member of the Finance department take responsibility for managing and monitoring these metrics. A number of consumer goods companies have successfully implemented such an approach. At minimum, CMOs should explore this option.
A Marketing - Finance partnership is beneficial on two levels. First, it helps create important CFO buy-in of marketing measurements. Second, it can put responsibility for metrics in the hands of the most qualified staff to handle metrics. Additionally, having these measures monitored by a member of the Finance department can eliminate the need to promote marketing successes to the finance department. It also means an immediate awareness of failures, which is probably the part that scares most marketers.
There is another reason. The divide between Marketing and Finance is often the greatest between any two business departments. I believe that the CMO must make forging a strong relationship with the CFO a priority. Finance must be a partner in determining marketing metrics. This buy-in is essential to marketing gaining the organizational credibility it needs to reach its potential.