Jim Meier, (an executive at MillerCoors), is an expert on getting marketing and finance to work together. Let’s call this the marketing finance partnership. He has written a fascinating chapter on the problems of doing this.
Perceptions Of Marketing
The portrayal of marketers through the eyes of finance people is amusing. Still, it isn’t pretty. Sadly it rings true. Finance people see marketing as being “..fraught with subjectivity, murkiness, and fluffiness” (Meier, 2016, page 152). Marketing is seen as imprecise.
Meier, therefore, worries that marketing measures are often quite divorced from financial outcomes. They aren’t much use to anyone. Even if the measures used are useful this is not enough.
[T]he trail goes cold before it reaches a true financial destination.
Meier, 2016, page 154
In return finance people are seen as having a “lack of understanding of what truly matters” (Meier, 2016, page 153).
Mini-CFOs
After outlining the problems Meier explains actions taken at MillerCoors. One idea was seeding finance people throughout the organization. These distributed finance staff were “mini-CFOs”. As a result they had a chance to better understand what will help other disciplines perform their roles. In addition, MillerCoors was even [2016] examining the possibility of valuing brands periodically. The plan was to better highlight the effect of decisions on hard-to-measure intangible assets. This is critical. This is because these assets, which include brands, are crucial to the success of a firm like MillerCoors. Yet the importance of intangibles is easy to miss looking only at the numbers reported in company financial accounts.
The Marketing Finance Partnership
To be clear it is not just finance people that must change. Marketers need to understand finance decisions. As a result this “does necessitate that the organization take steps to “financialize the marketers”. This should not be done to an extreme in which they are converted into de facto accountants.” (Meier, 2016, pager 163).
The point is a good one. To influence finance decisions it is not enough to plead for finance people to understand marketing. Marketers, therefore, need to try to understand finance. It is a tough challenge for the discipline. One that I think/hope will be very worthwhile.
For more on the marketing-finance interface see here, here, and here.
Read: James Meier, 2016, Creating a Partnership Between Marketing and Finance, In Accountable Marketing: Linking Marketing Actions to Financial Performance, Edited by David W. Stewart and Craig T. Gugel, Routledge, MASB