The May 2007 issue of CFO Magazine touched on many topics relevant to Corporate Portfolio Management. One brief article was appropriately titled "Finance vs Marketing: Why They Still Don't See Eye-to-Eye on Measures of Return". This is one of those meaning of life type topics (similar to the value of IT investments). People have theories and are under the impression that talking about the issue somehow will make things better. (if the image below is blurry, just click on it and it will become more clear)
- 1. Finance as one might expect are unhappy with the their company's ability to measure marketing ROI (only 7%) while not surprisingly more marketing executives thinking they are doing a good job (23%). Note that although appreciably higher than finance, this # is still very low.
- 2. There are significant variations amongst industries with companies selling through retailers more evolved in their marketing ROI efforts vs those who sell through a salesforce (39% vs 11%, respectively)
- There is a significant lack of cooperation which is impeding the ability to improve on this. 19% of finance executive report full cooperation and 8% report frequent conflicts with marketing over budget and strategy. Worst of all, 13% report no meaningful relationship at all.
One quote in the article appears to be particularly telling. "Chief marketing officers who still think marketing is about brand awareness, with only a loose connection to the bottom line, won't last very long in their jobs." The onus, however, is not only the marketing organization. Finance needs to work and 'play nice' with their marketing organizations to determine a way to create a fact base that both can use to make better marketing decisions. In some instances, finance may need to realize that an ROI cannot be placed on everything but that just the simple act of knowing where resources are being allocated as part of a corporate portfolio management effort would be useful.