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Power Partnership Rising - CFO _

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Power Partnership RisingCFO | CMO

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2Harry Falber ¤ hfalber@tradeareamarketing.com ¤ 203.557.4150www.tradeareamarketing.com ©Trade Area Marketing Group, llc 2019 The increasing importance of a CFO-CMO partnership1. 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.Topics

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3Harry Falber ¤ hfalber@tradeareamarketing.com ¤ 203.557.4150www.tradeareamarketing.com ©Trade Area Marketing Group, llc 2019 1. Why The CFO is becoming more important to the CMO as a partner

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4Harry Falber ¤ hfalber@tradeareamarketing.com ¤ 203.557.4150www.tradeareamarketing.com ©Trade Area Marketing Group, llc 2019 The CMO really needs your helpMarketing 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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5Harry Falber ¤ hfalber@tradeareamarketing.com ¤ 203.557.4150www.tradeareamarketing.com ©Trade Area Marketing Group, llc 2019 2. Issues

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6Harry Falber ¤ hfalber@tradeareamarketing.com ¤ 203.557.4150www.tradeareamarketing.com ©Trade Area Marketing Group, llc 2019 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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7Harry Falber ¤ hfalber@tradeareamarketing.com ¤ 203.557.4150www.tradeareamarketing.com ©Trade Area Marketing Group, llc 2019 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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8Harry Falber ¤ hfalber@tradeareamarketing.com ¤ 203.557.4150www.tradeareamarketing.com ©Trade Area Marketing Group, llc 2019 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 PainWhile every department feels it, only one isn’t defined by “weights and measures”

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9Harry Falber ¤ hfalber@tradeareamarketing.com ¤ 203.557.4150www.tradeareamarketing.com ©Trade Area Marketing Group, llc 2019 3. The most disruptive change inmodern marketing

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10Harry Falber ¤ hfalber@tradeareamarketing.com ¤ 203.557.4150www.tradeareamarketing.com ©Trade Area Marketing Group, llc 2019 The major destabilizing culprit at both client and agencyDigital

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11Harry Falber ¤ hfalber@tradeareamarketing.com ¤ 203.557.4150www.tradeareamarketing.com ©Trade Area Marketing Group, llc 2019 What is Digital?What Isn’t Digital?Does this define Digital?Maybe. Maybe not.

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12Harry Falber ¤ hfalber@tradeareamarketing.com ¤ 203.557.4150www.tradeareamarketing.com ©Trade Area Marketing Group, llc 2019 50 ways to leave your stakeholders…confused!

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13Harry Falber ¤ hfalber@tradeareamarketing.com ¤ 203.557.4150www.tradeareamarketing.com ©Trade Area Marketing Group, llc 2019 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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14Harry Falber ¤ hfalber@tradeareamarketing.com ¤ 203.557.4150www.tradeareamarketing.com ©Trade Area Marketing Group, llc 2019 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.Actually…none of them!

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15Harry Falber ¤ hfalber@tradeareamarketing.com ¤ 203.557.4150www.tradeareamarketing.com ©Trade Area Marketing Group, llc 2019 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”.Changingeconomics at ad agencies & their compensation requirements.But as CFO, Digital has or will havea direct effect on your managing P&L

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16Harry Falber ¤ hfalber@tradeareamarketing.com ¤ 203.557.4150www.tradeareamarketing.com ©Trade Area Marketing Group, llc 2019 The CFO’s role in:CMO-CFO RelationshipsMarketingNew Agency Searches

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17Harry Falber ¤ hfalber@tradeareamarketing.com ¤ 203.557.4150www.tradeareamarketing.com ©Trade Area Marketing Group, llc 2019 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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18Harry Falber ¤ hfalber@tradeareamarketing.com ¤ 203.557.4150www.tradeareamarketing.com ©Trade Area Marketing Group, llc 2019 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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19Harry Falber ¤ hfalber@tradeareamarketing.com ¤ 203.557.4150www.tradeareamarketing.com ©Trade Area Marketing Group, llc 2019 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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20Harry Falber ¤ hfalber@tradeareamarketing.com ¤ 203.557.4150www.tradeareamarketing.com ©Trade Area Marketing Group, llc 2019 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. How to effectively bridge the gap with CMOs

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21Harry Falber ¤ hfalber@tradeareamarketing.com ¤ 203.557.4150www.tradeareamarketing.com ©Trade Area Marketing Group, llc 2019 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*?How to effectively bridge the gap with CMOs*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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22Harry Falber ¤ hfalber@tradeareamarketing.com ¤ 203.557.4150www.tradeareamarketing.com ©Trade Area Marketing Group, llc 2019 Your CMO and brand team are begging for understanding. Follow These….…3 Golden Rules

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23Harry Falber ¤ hfalber@tradeareamarketing.com ¤ 203.557.4150www.tradeareamarketing.com ©Trade Area Marketing Group, llc 2019 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 OneAcknowledge that good marketing does create shareholder valueFrame questions supportively

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24Harry Falber ¤ hfalber@tradeareamarketing.com ¤ 203.557.4150www.tradeareamarketing.com ©Trade Area Marketing Group, llc 2019 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)providedit is followed in short order by “…but here is what we can do to find out.”Youwill 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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25Harry Falber ¤ hfalber@tradeareamarketing.com ¤ 203.557.4150www.tradeareamarketing.com ©Trade Area Marketing Group, llc 2019 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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26Harry Falber ¤ hfalber@tradeareamarketing.com ¤ 203.557.4150www.tradeareamarketing.com ©Trade Area Marketing Group, llc 2019 you’ll get much closer to the answers you’re seeking, much faster, with greater accuracyYou’ll have improved your company’s and your marketing department’s chance to achieve goals exponentiallyYou’ll have contributed immensely in creating a positive environment in your agency that will deliver exceptional resultsThe CFO-CMO Bottom lineIf the spirit of your inquiry is interpreted as a quest for insight rather than an attack,

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27Harry Falber ¤ hfalber@tradeareamarketing.com ¤ 203.557.4150www.tradeareamarketing.com ©Trade Area Marketing Group, llc 2019 CFO And The Agency

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28Harry Falber ¤ hfalber@tradeareamarketing.com ¤ 203.557.4150www.tradeareamarketing.com ©Trade Area Marketing Group, llc 2019 Natural allies, not antagonistsCFOdefines reality for CMOCMO creates vision within defined parametersAgency is source of vision executionThe Bermuda Triangle: CMO | CFO | “The Agency”

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29Harry Falber ¤ hfalber@tradeareamarketing.com ¤ 203.557.4150www.tradeareamarketing.com ©Trade Area Marketing Group, llc 2019 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) profitHelp CMO learn how to challenge and and manage procurement while challenging & managing, on her own, agency service costsCFO 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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30Harry Falber ¤ hfalber@tradeareamarketing.com ¤ 203.557.4150www.tradeareamarketing.com ©Trade Area Marketing Group, llc 2019 You should always have a role on the agency evaluation teamResist the conventional role of inquisitorEmbrace the role of being cheerleaderYou should always play a major role in compensation terms and systemDo not leave this to a procurement line employeeBe supportive of the agency’s need to make a reasonable profitCFO And Agency Selection

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31Harry Falber ¤ hfalber@tradeareamarketing.com ¤ 203.557.4150www.tradeareamarketing.com ©Trade Area Marketing Group, llc 2019 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 compensatedConsider 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 onCFO And Agency Selection

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32Harry Falber ¤ hfalber@tradeareamarketing.com ¤ 203.557.4150www.tradeareamarketing.com ©Trade Area Marketing Group, llc 2019 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 overheadUnderstand all the components of agency overheadBuffer the procurement group CFO And Agency Selection

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33Harry Falber ¤ hfalber@tradeareamarketing.com ¤ 203.557.4150www.tradeareamarketing.com ©Trade Area Marketing Group, llc 2019 5. Wrapping it up....and the take-aways

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34Harry Falber ¤ hfalber@tradeareamarketing.com ¤ 203.557.4150www.tradeareamarketing.com ©Trade Area Marketing Group, llc 2019 The economic change wrought by the rise of digital marketingThe dilution of effective channels to reach both b-to-b and b-to-c customersCreative confusionMarketing 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 visibilityWrapping it up: Why the CFO is now a friend of MarketingThe CMO and her agencies are under more pressure than ever

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35Harry Falber ¤ hfalber@tradeareamarketing.com ¤ 203.557.4150www.tradeareamarketing.com ©Trade Area Marketing Group, llc 2019 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 AgencyAgencies are under more pressure thanever

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36Harry Falber ¤ hfalber@tradeareamarketing.com ¤ 203.557.4150www.tradeareamarketing.com ©Trade Area Marketing Group, llc 2019 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 andits AgenciesThe fact is:

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37Harry Falber ¤ hfalber@tradeareamarketing.com ¤ 203.557.4150www.tradeareamarketing.com ©Trade Area Marketing Group, llc 2019 Wrapping it up:Two Important Take-AwaysTrust and respect: Two attributes that most agencies no longer expect from clients, and marketing teams no longer expect from colleaguesTake-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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38Harry Falber ¤ hfalber@tradeareamarketing.com ¤ 203.557.4150www.tradeareamarketing.com ©Trade Area Marketing Group, llc 2019 About Trade Area Marketing GroupWe consult to CEOs and CMOs providing on-site management for international or domestic corporate/brand strategy and marketing plan execution in critical situations. We advise CEOs and CMOs on new agency searches for an AOR, or specific verticals including broadcast advertising, media, digital, direct marketing , direct response, public relations, licensing, media, and sales promotion. In conjunction with the awarding of accounts, we work with client CMOs, CFOs, procurement and agency management to arrive at fair compensation, and through on-boarding of the agency, and relationship development, help insure a long-lasting and productive partnership.

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39Harry Falber ¤ hfalber@tradeareamarketing.com ¤ 203.557.4150www.tradeareamarketing.com ©Trade Area Marketing Group, llc 2019 Harry Falber hfalber@tradeareamarketing.com203.557.4150