LONDON: Three quarters of finance directors are unable to say what they get in return for their company's marketing spend, new research has shown.
Econsultancy surveyed 171 senior finance executives in the UK working at board or director level within organisations across a range of sectors and sizes, as well as carrying out in-depth interviews with both finance directors and chief marketing officers.
In an echo of Oscar Wilde's quip about cynics, most of the finance directors polled had a clear idea of what they were spending on marketing but were unable to quantify the return on investment.
What emerged from the research – being presented in full at the Festival of Marketing currently taking place in London's Tobacco Dock – was a picture of the two functions speaking different languages and not fully appreciating the role the other played.
So, for example, 62% of senior finance executives believed that marketing was a critical function within their business, but only 39% had confidence in marketers to make good commercial decisions.
But there was a clear need for that to change, as just over a third of finance executives (35%) believed that 'the role of marketing has expanded in recent years to include more strategic and financial responsibility'.
Accordingly, there was a widespread desire for marketing departments to show a greater understanding of commercial objectives (52%) and to provide realistic forecasts and projections (48%).
CMOs may be further disheartened by the finding that 24% of finance directors don't know what percentage of their organisations' revenues are directly driven by marketing activity.
But some had a more positive outlook. Andrew Peeler, CFO at health insurer Bupa, for example, understood that "from a finance perspective you can see marketing working when brand awareness is increasing, you're selling more, and you have truly differentiated products and service, you are gaining share".
Not only could marketing "demonstrate its value in terms that finance understands", he said, but the two should be "aligned from the onset of strategic decisions and key projects and build their plans together".
Data sourced from Econsultancy; additional content by Warc staff