In EY’s view, there are three areas where marketing and finance should prioritize their efforts to work together more effectively.
1. Diverse approaches to martech
More than half of respondents to the survey (57%) believe there is little agreement on what constitutes leading practice in the adoption of martech. This is troubling given that technology spend accounts for 29% of a CMO’s budget today – compared to just 24% for labor – according to Gartner’s 2018-2019 CMO Spend Survey.
As martech continues to grow in sophistication, and as data opens up new opportunities for customer engagement, our research also highlights the need to find more common ground around marketing cost allocation and its impact on P&L.
In justifying martech spend, CMOs are likely to highlight the potential for new growth and insight, while CFOs are more apt to look for cost efficiencies and associated risks. For reasons like these, CMOs flag the challenge they face when seeking finance’s approval for investment, indicating that they may be highlighting the wrong areas when seeking CFO buy-in.
In some organizations, however, the approval process may be complicated further by varied tenure length between marketing and finance chiefs. As Dan Carter explained: “My biggest challenge was trying to accept that marketing investments would pay off over the long term knowing that the current CMO might not be there long enough to see it come to life. At one of my companies, we had four different CMOs in seven years.”
We also see differences in the sources that marketing and finance turn to when estimating the positive and negative impact that new technology might have on the organization. For example, CMOs are more likely to turn to external sources – such as consultants, suppliers and partners – than CFOs, who favor internal resources.
Moreover, 61% of respondents agree that their finance organization is generally under-informed on marketing in the digital era. It could be argued that CMOs are bolder and more exploratory in their approach to technology implementation, whereas finance takes a more exacting approach to justify the investment. In turn, CMOs’ willingness to explore unfamiliar, untried sources for technology insight may suggest divergence in the two functions’ risk appetite.