CFO | CMO Rise of the New Power Partnership 2018

The Rise of the
New Power Partnership
CFO | CMO

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Joe Dell’ Aquila ¤ jfdellq@tradeareamarketing.com ¤ 203.570.6639
Harry Falber ¤ hfalber@tradeareamarketing.com ¤ 203.557.4150
www.tradeareamarketing.com ©Trade Area Marketing Group, llc 20xx
The increasing importance of a
CFO-CMO partnership
1. Why the new importance of a CFO-CMO
Partnership?
2. Issues facing today’s CMO & how the CFO
can help.
3. Understanding the most disruptive,
destabilizing, & painful change in modern
marketing.
4. The CFO’s important role in agency
relationships and new agency search.
5. Wrapping it up & two take-aways.
Today’s Topics

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1. Why The CFO is
becoming more
important to the CMO
as a partner

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The CMO really needs your help
Marketing is more complex.
Demands on the dollar are greater than
what’s in the wallet.
More often than not, she is learning new
landscapes on the fly.
There are too many experts and not
enough generalists.
He lives in a world of possibilities and
abstracts…the CFO is an advocate who
can help bridge the gap into a world that
wants quantification.

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2. Issues

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CEO pressure for short term
results.
Difficulty in generating
marketing metrics.
Greater difficulty in generating
communications metrics.
Lack of real understanding of
how agencies make money.
Issues Facing Today’s CMO

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Many CMOs not truly knowledgeable in
understanding creative development over
all platforms or all media.
All too many agencies just hang out a
“shingle” (digital for instance).
What you see is not what you get
(outsourced agency talent).
“Big Data” has moved from buzz word to
most misunderstood or misused
research.
Issues Facing Today’s CMO

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Unprecedented financial concern and even
greater scrutiny.
ROI demands.
Search for measurement.
Short vs. long term.
Confusion over what’s real in advertising.
Confusion about what is advertising.
Issues Lead To Budget Pain
While every department feels it,
only one isn’t defined by
“weights and measures”

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3. The most disruptive
change in
modern marketing

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The major destabilizing culprit
at both client and agency
Digital

Joe Dell’ Aquila ¤ jfdellq@tradeareamarketing.com ¤
Harry Falber ¤ hfalber@tradeareamarketing.com ¤ 203.5
www.tradeareamarketing.com ©Trade Area Marketing Group, llc
What is Digital?
What Isn’t Digital?
Does this
define
Digital?
Maybe.
Maybe not.

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The greatest sales tool the world
has ever seen?
A technological scam, perpetrated
by propellerheads who have never
seen a marketing plan?
A “flash in the pan” that will be the
marketing world’s next hula hoop?
What is Digital Marketing?

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It is simply…
a medium or channel
that is as weak or
powerful as the idea
contained within it,
and the way it is
targeted to current or
prospective consumers.
Actually…none of them!

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New disciplines, for you to learn (and keep
relearning) with few measurements or financial
metrics.
The intersection of big data and new media
technology has greatly expanded the role of
marketing as a driver of enterprise value creation.
This new driver defines the critical importance of
a closer peer relationship between CMO and CFO in
order to drive strategy and improve the financial
health of the enterprise.
Internal economics…increased marketing “Capex
and Opex”.
Changing economics at ad agencies & their
compensation requirements.
But as CFO, Digital has or will have a
direct effect on your managing P&L

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The CFO’s role in:
CMO-CFO Relationships
Marketing
New Agency Searches

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See yourself in a role of
advisor not inquisitor when
speaking to your CMO peer
or his subordinates.
Financial Coach: Make
sure your CMO understands
the changes and their
impact on P&L.
Significant change in the
CFO’s marketing playbook

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Make sure the CMO knows, and you
reinforce, that you and your team view
marketing as an engine of growth as
opposed to a “cost center”.
Lead discussions so they shift from
"where can we trim spending" to
"how we can optimize spend and
justify when and how to increase
our investment?”
Collaboration: The Evolving Partnership

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Actively develop cross-functional teams with
open communication objectives.
Understand the CMO perspective on drivers of
customer value, that are both tangible and
intangible.
Develop a common set of metrics addressing
performance of marketing investments that can
be understood by all.
Establish accountability for marketing ROI, with
measurable performance objectives.
Recognize the need for and importance of
“unquantifiable” creativity and innovation to
enhance brand and customer experience.
How to effectively bridge the gap with CMOs

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Insure that your finance team's
forecasting work operates at granular
level based on strategic needs by
region, vertical, or customer segment
as you and CMO agree in advance to.
Work with the CMO to create a
common lexicon for your teams, so
both speak the nuances and
complexities of marketing objectives,
with the more objective and finite
metrics of finance, that perhaps have
more elasticity than would be seen as
the outcome of a production line.

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Make sure all marketing-finance
conversations address, at the least,
these three topics:
Spend by target audience: who are
we trying to reach?
Marketing investment by objective:
when are we trying to reach them*?
Marketing spend by vehicle: how
will we reach them*?
*Them = the existing, ex, or potential customer, client, partner, or influencer. Sometimes, the shareholders,
stakeholders, PE firms, investment banks, media, retailers, distributors, but not your bragging rights to the wife.

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Your CMO and brand team are begging
for understanding. Follow These….
…3 Golden Rules

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Asking questions of discovery
tend to work well, such as:
“What can we achieve with
good marketing?”
“How well is our current
marketing performing?”
“How can we improve the
payback we’re getting?”
Golden Rule One
Acknowledge that good marketing
does create shareholder value
Frame questions supportively

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Embrace Ambiguity and be willing to
accept “I don’t know” as an answer from
marketing in the near term……(difficult as this
might be for most CFOs)
provided it is followed in short order by
“…but here is what we can do to find out.”
You will be seen as the stable, measured
voice of management helping to embrace
uncertainty, especially in the early stages of
marketing measurement when the unknowns
will outnumber the knowns.
Golden Rule Two

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Be patient.
Don’t assume that applying time
pressure will speed
discovery. More likely,
impatience will be met with
passive-aggressive resistance
which will surface many more
complex obstacles than you or
the rest of the finance team have
the time or ability to conquer.
Premature demands for precision
will backfire in the form of higher
weighting of the more
measurable marketing elements
such as web site traffic .
Golden Rule Three

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you’ll get much closer to the
answers you’re seeking, much
faster, with greater accuracy
You’ll have improved your
company’s and your marketing
department’s chance to achieve
goals exponentially
You’ll have contributed immensely
in creating a positive environment
in your agency that will deliver
exceptional results
The CFO-CMO Bottom line
If the spirit of your inquiry is
interpreted as a quest for insight
rather than an attack,

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CFO And The Agency

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Natural allies, not antagonists
CFO defines reality for CMO
CMO creates vision within
defined parameters
Agency is source of
vision execution
The Bermuda Triangle:
CMO | CFO | “The Agency”

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Temper procurement department.
As cheap widgets can cause a product to fail,
so can cheap creative and insight.
Agency must make a fair
(not usurious) profit
Help CMO learn how to challenge and
and manage procurement while challenging
& managing, on her own, agency service costs
CFO should work with marketing to
insure that creative quality and
business sense, not price, is the
requisite for an agency
For the CFO to help achieve
an agency’s success

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You should always have a role on
the agency evaluation team
Resist the conventional role of inquisitor
Embrace the role of being cheerleader
You should always play a major role
in compensation terms and system
Do not leave this to a procurement
line employee
Be supportive of the agency’s need to
make a reasonable profit
CFO And Agency Selection

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Try and understand your
company’s demands as a
client
(lots of last minute work and changes,
multi-department “freebee requests”,
shift in-house routine brand work to
agency staff, ex: dealer & retailer
promotions, events)
Contribute to defined Scope Of
Work (SOW) upon which the agency
will be compensated
Consider helping CMO craft
“invitation to compete” which
states what is involved for new agency so you
both can evaluate agency’s SOW that fee is
based on

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Resist the temptation to offer
creative judgments
(or offer them privately over coffee. Let marketing always
do the feedback. Reinforce to the CMO that you will
always keep opinion private between each other)
Vet the agency’s numbers on
staffing and overhead
Understand all the components
of agency overhead
Buffer the procurement group

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5. Wrapping it up..
..and the take-aways

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The economic change wrought by the
rise of digital marketing
The dilution of effective channels to
reach both b-to-b and b-to-c customers
Creative confusion
Marketing has become even more
of a scapegoat
The rise of immediate negative
response in social media (from blogs,
to twitter, to Facebook, to huffpost et
al)
Ire of board and stakeholders
to new visibility
Wrapping it up:
Why the CFO is now a friend
of Marketing
The CMO and her agencies are
under more pressure than ever

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Staff based fee systems.
The problems with generating realistic
incentive compensation.
The increasing velocity of account switching
which can devastate them, and cost you money.
Client approval processes have become
increasingly difficult to manage.
Marketing direction has become ambiguous, and
more often than not marketing team members
have not been trained in advertising, media,
or even financial controls.
Wrapping it up:
Why the CFO is now a friend of The Ad Agency
Agencies are under more
pressure than ever

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Support from the CFO is
the ONE and ONLY
concrete vote of
confidence, as it is
defined by role
consensus as financial
acumen, not just opinion.
Wrapping it up:
Why the CFO is now a friend of
Marketing and its Agencies
The fact is:

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Wrapping it up:
Two Important Take-Aways
Trust and respect:
Two attributes that most agencies no
longer expect from clients, and marketing
teams no longer expect from colleagues
Take-away One: Both marketing
and the agency will walk through walls
for those that give them trust & respect.
Take-away Two: And first in line to
give them what they need to produce
best-in-class marketing and advertising
can be the CFO and her team….
The stabilizing voice of the client

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About Trade Area Marketing Group
We're a hands-on advisory and consulting service
working for private equity firms, business-to-business
and business-to-consumer corporations as well as
advertising agencies.
We work in four primary service areas:
CEO & CMO advisors for advertising, media, digital, direct
marketing | direct response | public relations | licensing | media
|sales promotion agency searches, client:agency compensation
agreements on-boarding | relationship development
Advisors to Private Equity investors with existing or new portfolios
in advertising agencies looking for mergers or acquisitions
Advisors to agency management for mergers, acquisitions, exit
strategies
CEO & CMO consultants providing on-site management for
international or domestic corporate/brand strategy and
marketing plan execution in critical situations
More detailed information can be found on our website
www.tradeareamarketing.com

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Joe Dell’ Aquila
jfdellq@tradeareamarketing.com
203.570.6639
Harry Falber
hfalber@tradeareamarketing.com
203.557.4150

CFO | CMO Rise of the New Power Partnership 2018

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