A CEOs involvement with the CMO and the Marcomm group is more important than ever. For the company, for the CMO, and for the ad agencies.

The Rise of the New Power Partnership CFO | CMO
The Rise of the New Power Partnership CFO   CMO
The increasing importance of a CFO-CMO partnership Today’s Topics 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. 2
The increasing importance of a CFO-CMO partnership Today   s Topics 1.     Why the new importance of a CFO-CMO Partnership...
1. Why The CFO is becoming more important to the CMO as a partner 3
1. Why The CFO is becoming more important to the CMO as a partner  3
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. 4
The CMO really needs your help      Marketing is more complex.      Demands on the dollar are greater than  what   s in th...
2. Issues 5
2. Issues  5
Issues Facing Today’s CMO !   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. 6
Issues Facing Today   s CMO        CEO pressure for short term  results.       Difficulty in generating marketing metrics....
Issues Facing Today’s CMO !   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. 7
Issues Facing Today   s CMO       Many CMOs not truly knowledgeable in  understanding creative development over all platfo...
Issues Lead To Budget Pain While every department feels it, only one isn’t defined by “weights and measures” !   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. 8
Issues Lead To Budget Pain While every department feels it, only one isn   t defined by    weights and measures          U...
3. The most disruptive change in modern marketing 9
3. The most disruptive change in modern marketing  9
Digital The major destabilizing culprit at both client and agency 10
Digital  The major destabilizing culprit at both client and agency      10
What is Digital? What Isn’t Digital? Does this define Digital? Maybe. Maybe not. 11
What is Digital  What Isn   t Digital   Does this define Digital  Maybe. Maybe not. 11
50 wa ys to leave your stake holde rs…co nfuse d! 12
50 wa ys to leave  your  stake  holde  rs   co  nfuse  d    12
What is Digital Marketing? !   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? 13
What is Digital Marketing        The greatest sales tool the world  has ever seen         A technological scam, perpetrate...
Actually…none of them! It is simply… !   a new medium that is as weak or powerful as the idea contained within it, !   and the way it is targeted to current or prospective consumers. 14
Actually   none of them  It is simply             a new medium that is as  weak or powerful as the idea contained within i...
But as CFO, Digital has or will have a direct effect on your managing P&L !   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. 15
But as CFO, Digital has or will have a direct effect on your managing P L       New disciplines, for you to learn  and kee...
The CFO’s role in: !  CMO-CFO Relationships !  Marketing !  New Agency Searches 16
The CFO   s role in       CMO-CFO Relationships      Marketing      New Agency Searches  16
Significant change in the CFO’s marketing playbook !   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. 17
Significant change in the CFO   s marketing playbook       See yourself in a role of  advisor not inquisitor when speaking...
Collaboration: The Evolving Partnership ! 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?” 18
Collaboration  The Evolving Partnership     Make sure the CMO knows, and you reinforce, that you and your team view market...
Strengthening the Partnership How to effectively bridge the gap with CMOs !  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. 19
Strengthening the Partnership How to effectively bridge the gap with CMOs      Actively develop cross-functional teams wit...
Strengthening the Partnership How to effectively bridge the gap with CMOs !   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. 20
Strengthening the Partnership How to effectively bridge the gap with CMOs       Insure that your finance team s  forecasti...
Strengthening the Partnership How to effectively bridge the gap with CMOs 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. 21
Strengthening the Partnership How to effectively bridge the gap with CMOs Make sure all marketing-finance conversations ad...
Your CMO and brand team are begging for understanding. Follow These…. …3 Golden Rules 22
Your CMO and brand team are begging for understanding. Follow These   .     3 Golden Rules  22
Golden Rule One Acknowledge that good marketing does create shareholder value !   Frame questions supportively 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?” 23
Golden Rule One Acknowledge that good marketing does create shareholder value       Frame questions supportively  Asking q...
Golden Rule Two 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. 24
Golden Rule Two Embrace Ambiguity  and be willing to accept    I don   t know    as an answer from marketing in the near t...
Golden Rule Three 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 . 25
Golden Rule Three Be patient.       Don   t assume that applying time  pressure will speed discovery. More likely, impatie...
The CFO-CMO Bottom line If the spirit of your inquiry is interpreted as a quest for insight rather than an attack, !   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 26
The CFO-CMO Bottom line If the spirit of your inquiry is interpreted as a quest for insight rather than an attack,        ...
CFO And The Agency 27
CFO And The Agency  27
The Bermuda Triangle: CMO | CFO | “The Agency” Natural allies, not antagonists !  CFO defines reality for CMO !  CMO creates vision within defined parameters !  Agency is source of vision execution 28
The Bermuda Triangle  CMO   CFO      The Agency    Natural allies, not antagonists      CFO defines reality for CMO      C...
For the CFO to help achieve an agency’s success !   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 29
For the CFO to help achieve an agency   s success       Temper procurement department.       As cheap widgets can cause a ...
CFO And Agency Selection !   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 30
CFO And Agency Selection       You should always have a role on  the agency evaluation team        Resist the conventional...
CFO And Agency Selection !   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 31
CFO And Agency Selection       Try and understand your  company   s demands as a client        lots of last minute work an...
CFO And Agency Selection !   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 32
CFO And Agency Selection       Resist the temptation to offer  creative judgments   or offer them privately over coffee. L...
5. Wrapping it up.. ..and the take-aways 33
5. Wrapping it up..  ..and the take-aways  33
Wrapping it up: Why the CFO is now a friend of Marketing The CMO and her agencies are under more pressure than ever !   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 34
Wrapping it up  Why the CFO is now a friend of Marketing The CMO and her agencies are under more pressure than ever       ...
Wrapping it up: Why the CFO is now a friend of The Ad Agency Agencies are under more pressure than ever !   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. 35
Wrapping it up  Why the CFO is now a friend of The Ad Agency Agencies are under more pressure than ever       Staff based ...
Wrapping it up: Why the CFO is now a friend of Marketing and its Agencies The fact is: 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. 36
Wrapping it up  Why the CFO is now a friend of Marketing and its Agencies  The fact is  Support from the CFO is the ONE an...
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 37
Wrapping it up  Two Important Take-Aways Trust and respect   Two attributes that most agencies no longer expect from clien...
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 38
About Trade Area Marketing Group We re a hands-on advisory and consulting service working for private equity firms, busine...
Joe Dell’ Aquila jfdellq@tradeareamarketing.com 203.322.3642 Harry Falber hfalber@tradeareamarketing.com 203.557.4150 39
Joe Dell    Aquila jfdellq tradeareamarketing.com 203.322.3642   Harry Falber hfalber tradeareamarketing.com   203.557.415...

If you have begun thinking about revisiting your agency line up, evaluating your marcomm expenditures, renegotiating your agency compensation agreements, or just talk about issus you seem to feel you are having, we would be happy to discuss our services with you.