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Reinvention is at the top of every executive’s agenda, creating new opportunities for marketers to drive long-term growth. About 40% of executives in PwC’s 26th Global CEO Survey said their companies won’t be economically viable in 10 years on their current path, putting more pressure on how they deliver for shareholders and investors.
To do so, leading marketers are turning to new catalysts like stronger collaboration between marketing and finance. That can help achieve measurable outcomes through coordination on key investments like AI and generative AI, which can help significantly in critical areas such as personalization and customer experience. Consider that more than half of the CEOs in our survey said changing customer preferences will have the greatest impact on profitability over the next 10 years. In addition, PwC’s 2023 Global Entertainment & Media Outlook projected worldwide advertising spend will be close to $1 trillion by 2027 — the first time it’s ever reached that figure.
Here are three ways CMOs can help keep their marketing machine in high gear and prove its value to finance departments, as well as across the C-suite and in the boardroom:
- Make every dollar work. Embrace a value-creation mindset to show your marketing function’s impact and help it grow.
- Think like a CFO. Demonstrate how you achieve clear financial outcomes and a measurable return on investment (ROI), and how that ROI and overall impact is tracked to inform future spending.
- Build better, broader relationships. Forge alliances across the C-suite with the belief that marketing is connective tissue for the enterprise.
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Why marketers need to prevail in the boardroom
Make every dollar work
Start by looking beyond media, which typically accounts for less than 50% of overall marketing budgets yet is often where companies choose to increase the volume of activities. What about your overall operating model? Are you streamlining processes to increase productivity? Are you leveraging scale through centers of excellence and shared services? How are you enhancing your marketing technology stack and using your workforce to power it?
Agency relationships should be a natural extension of your internal operating model. We’ve worked with many clients to help rationalize their agency roster to gain efficiencies while redesigning commercial models and aligning incentives to improve effectiveness. Many top marketers assess where their total spend is actually going, aiming for meaningful ROI from each dollar.
That still includes media, of course, but while spending more on media can drive growth, marketers should first improve their current media investments — and that could mean resource reallocation. Are you dedicating media dollars to the right markets, brands and channels? Once you’re happy with the answer, then you can look at campaigns. We’ve found that up to 70% of campaigns fail to achieve internal reach and frequency targets. That tells us that too many companies are spreading their efforts too thin, diluting ROI. A better strategy is to think fewer, bigger and better as opposed to just “more.”
For example, when we looked at one global food company’s many campaigns over multiple years, we found that most were underfunded and didn’t meet their thresholds for reach or frequency. Imagine more than half of the cars in a Formula One race running out of gas before the finish. What’s the point of even starting the race?
Think like a CFO
They might be often cautious, methodical and data-driven, but CFOs also are usually business-savvy, open-minded and ultimately consumers themselves. Understanding their mindset helps you anticipate what they expect from marketing:
- Demonstrate a clear connection between marketing activities and overall financial performance targets, zeroing in on metrics that matter to your company and its bottom line.
- Offer different investment options and related ROI scenarios, keeping in mind that CFOs are solicited for funding by all functions in the enterprise and have to prioritize investments and allocations.
- Balance short- and long-term performance, recognizing that CFOs appreciate the lasting value of brands and the benefit of investing to build that value.
Investments in data and technology can be big connection points. Our research has found that many companies struggle with demonstrating return on data and analytics investments. But CFOs — as well as other C-suite execs and board members — are definitely interested in the promise of tech, including how it can augment workforces for additional productivity and provide new revenue opportunities.
Consider AI and how its implementation could free up resources, increase productivity and profitability, and improve ROI. That includes scaling further with fewer resource constraints and working faster to enhance the speed of production and reduce costs. It also involves automating and enabling new business models by converting existing knowledge into meaningful, actionable insights and ultimately new services — all of which can create more value.
Build better, broader relationships
In our 2023 Trust Survey, nine out of 10 executives agreed that building trusted relationships contributes to the bottom line. That’s critical for helping leaders better understand how marketing helps drive brand value that represents a meaningful part of business value.
Developing a greater appreciation for that connection helps show the worth of marketing in the C-suite and boardroom. And communication and collaboration shouldn’t be limited to just the marketing and finance functions. Without question, finance is important for ensuring that marketing initiatives are adequately funded. But collaboration with functions such as data, technology and procurement — or any area that can affect customer experience — is critical to successfully delivering marketing initiatives as well as building boardroom support for strategic marketing investments.
Take, for instance, delivering personalized experiences to customers — something 94% of CMOs told us they do in our most recent PwC Pulse Survey. This requires the right investments in marketing technology, a robust first-party data strategy and advanced analytics to translate data into actionable insights. But it can’t be done — at least, not successfully — without close collaboration with functions across the organization.
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