By Dr. Grace Kite

Make finance the co-star, not the villain, in your marketing movie

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It’s not surprising that marketing people think finance are the bad guys.

Afterall, if you don’t understand them, it looks like they go around doing exactly what movie villains do: randomly killing just to prove how big, bad and evil they are.

Then, when they explain why they’ve killed your idea, they sound like a baddie all over again: ‘I’m bringing order to this chaotic land (ahem, company)’, they say. Or, ‘even though it’s nasty, I have to do this, there’s a bigger scheme that justifies it, one that only I can see.’

It feels like the movie’s going to end badly, but there’s a plot twist. Because the way to win support and money for your best marketing ideas isn’t to defeat the villains, it’s to recognise that they aren’t villains after all.

To learn how they think and bring them what they need.

You’re going to have to change your great concept into numbers

It’s sort of obvious to say it, but finance people do like a few numbers.

In interviews my team at magic numbers did with seven CFOs and Finance Directors, this was the minimum viable thing to bring to a budget discussion. Table stakes.

Finance needs something concrete that shows this marketing is going to put more back in the company’s bank account than it takes out.

Solid evaluations of what happened in the past matter a lot, because they inform what will happen next. Everything from graphs and charts that illustrate past stories, through to analytics and especially econometrics done by an unbiased third party.

Whatever you present, your CFO or FD will doubt your numbers. Even though you’ll probably find that terrifying, they’re not doing it to be evil. It’s just part of their job description to question plans.

“It’s our role to question the business case. We may have a scenario based on the past, but last year was different, because there was a heat wave. So, is the expectation going forward based on wonky foundations?” Rupert Morton, Finance Director, ex-Secret Escapes

The trick that stops the conversation being a confrontation is having more than one version of how it’s likely to go: A best case, worst case, and a middle one.

And the move that brings both sides into the same team is knowing what causes each of these futures to happen and having an agreed plan to cut losses in the worst-case.

Present brand as CAPEX, performance and retail as OPEX

For finance, every expenditure has to be either a capital expenditure – where you buy something that pays back later – or an operating expenditure where you pay for something that’s used up straight away.

It helps finance to be your ally if you frame what you want to do in these terms, and show that you’ve considered what matters for each.

Performance and retail media ads help customers to find you online, mainly doing an availability job. So, it helps finance people if you present them as OPEX, and show how you are minimising their cost. For example:

“Amazon is like a machine, and we’ve got to spend about 20% of the retail price on ads there. You spend more, you don’t get much upside, you spend less, you see sales drop off. So, it’s like an OPEX” Finance Director from Amazon reseller

Brand advertising is an investment into a better future, so it should be presented as a CAPEX. The CFOs and FDs said that for these types of expenditure they need to know the return, when it will arrive, and whether, in an emergency, we can cut our losses.

If you want finance right behind you as you go about brand building, summarise answers to these questions in a number called discounted cashflow. This allows CFOs and FDs to compare it with other CAPEX, like R&D, product development, and machinery investments.

What you do is get the expected revenue that’ll arrive this year and in future years. That’s the cashflow part. Then apply a discount – a reduction – to revenue in future years to recognise that money in the future is worth less than money now.

Ask your analytics team, econometrics partners, or better still, finance themselves to help with the calculation. There’s also a calculator, from magic numbers and the IPA, that uses benchmark data to provide estimates.

There is a bigger scheme

It’s true. Finance do have an ulterior motive, one that most marketing people don’t fully understand. But it’s not to destroy the universe. It’s to make the annual results come out good.
They take the numbers you provide and business cases from other departments and add them up. Then, because this never matches the targets, finance makes decisions to convert what everyone wants to do into a plan that will achieve the bigwigs’ objectives.

“We have to take a view based on the profit number that we’re trying to deliver. We have to take a view on what we can spend across lots of different areas. We are very in-year profit focused.” Grant Welland, COO, UKTV

As numbers problems go, it’s chewy, because there’s a lot of uncertainty about whether the payback from different plans on the table will actually come to pass.

With that annual result looming, finance is looking for safe bets, and amongst many proposals that seemingly tick the numbers boxes, the track record of the person or team making the request can very often be the tie-breaker.

So, if you want that sign off, it’s not about fighting a battle, it’s about building trust.

The advice from Liz Kistruck, CFO at Motorway, is to bring the numbers that show the plan you pitched last year worked. And if it didn’t work, bring the reason why not, and a plan that learns from the mistakes.

If you do good marketing, you’ll be fine.

Finance people want to back good ideas, strong annual results for the business depend on it.

So, if the marketing you do works, you’ll be able to demonstrate it, make a good case to do more, and get your proposals agreed.

And, if your creative idea is good, finance will react well to it too. Just ask Yorkshire Tea’s FD, Helen Southwell, about the “everything done proper” idea in their ads. She’s seen the evidence the ads work and she’s also on board because they reflect something that’s genuinely true about how the business behaves.

People in finance teams aren’t cold, dark, brooding creatures, scheming in dark towers, they’re humans that can be proud of working somewhere that delivers for customers, and that can be moved by a creative idea.

And more than that, they’re practical numbers people that can recognise good marketing, and see ways to improve it that you might miss.

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