To say that chief marketing and chief financial officers have historically had a taut relationship is an understatement. CFOs often look at the marketing function as a soft cost — purely in terms of profit and expense. They typically don’t understand the ethereal nature of traditional marketing metrics, such as “brand awareness,” “positioning” and “shifting perceptions.” In fact, the CFO party line on the marketing organization is that it has dodged financial accountability for far too long and after extensive investment.
In a down economy, that’s code for slash your budget or prove your worth.
CMOs need to take on the mantle of leadership and learn the CFO’s lexicon for return on investment. By creating a data-driven culture, you can translate your creative strategies into terms the CFO can understand and support.
One of the best places to start this effort is by employing a strong web analytics expert, one that a web analytics recruiter can help you identify. Websites consume corporate dollars, and it’s a reasonable demand to prove with cold, hard facts that the investment is worthwhile. Although more marketing departments are taking the reins of web analytics away from IT, most are still clumsily fooling around with it. Most organizations haven’t really figured out how to take advantage of this treasure trove of data.
It’s not for lack of trying. Forrester Research estimates that businesses will spend $953 million dollars on web analytics in 2014, with an average annual growth of 17% from 2009. Still, it likens web analytics to a teenager in terms of maturity in the corporate marketing sphere.
The challenge, therefore, is before you. Marketing has a reputation for being surrounded by data but often falling short of effectively leveraging it. CMOs need to shift their work from the more subjective, intuition-driven approaches to a more objective, analytical and data-driven operation.
In practical terms, the shift has four distinct tracts. You are closely watching data, such as traffic sources and volume increases, conversion and bounce rates, etc. But the next step is moving beyond tracking to data analysis. Link the experiences your targeted audience is having on your corporate websites with your marketing programs, using your traditional measurements. Explicitly connect your work to data from your analytics.
Next, cross over from being data-informed to data-driven. That is, make decisions and changes in your marketing programs based on that data. All of this is quite an undertaking, but you’re not done yet. The fourth element is presenting your analysis in ROI terms, aligning your marketing measures with corporate goals and objectives, including profit, growth and savings.
We’ve seen this changeover take place a few times, in which interim marketing executives go in and create web analytics programs where none existed previously and begin to make the shift toward data driving marketing decisions.
Both chief executives understand to a certain extent that there is a bit of intangible when it comes to marketing. A bit of magic, a dose of uncertainty and an unending quest for perfection in timing. Even CFOs grasp the concept of assumption. When justifying your need for marketing dollars, consider a language soaked in fiscal responsibility and methodical analysis.
Web analytics is a good place to start, because of the web’s growing centrality to business. But it’s not the only place. In our next post, we’ll unpack more practical steps in shifting their culture and the other domains CMOs need to mine for data.
