Should ‘Analytics’ Report to the CFO?

CMOs have one of the toughest jobs today (Click here for a great HBR article). They face many challenges in this multi-channel world:

1)   How to stand out and acquire customers in this cluttered hyper-competitive world?

2)   How to measure the marketing outcomes when the results seem all sketchy and non-attributable?

3)   How to manage the significant tussle between the digital and traditional?

4)   How to reduce customer acquisition costs and enhance the ROI? A metric that seems to be only thing the board cares about.

I have had many conversations in various contexts in the recent past –with industry observers and senior managers of various firms, large and small. The stories are even more egregious in the start-up world. Many well-funded startups die at the altar of marketing and back-breaking customer acquisition costs.

Three critical points:

1.    The way marketing spend is allocated can best be described as ‘old school’ i.e., % of revenues. Is it still valid?

2.    Most firms struggle with developing cogent measurement systems that capture the right metrics and measure performance and ROI across channels.

3.    More importantly, who owns the outcomes of above two exercises combined?

Many organizations have been using analytics to answer the above questions. But this in itself makes the CMO’s job even harder:

·     Today, most firms have acquired ‘cutting-edge’ analytics suites and enterprise marketing automation tools. However, many of these technology sellers come in with awesome promises but rarely live up to them.

·     Most end up as dashboards and report generators about which business heads and on-the-ground staff usually don’t care. Eventually, everyone finds a more immediate problem to solve: execution focus for results

·     CMOs also have to deal with the lack of the right talent that bridges the gaps.

·     Consequently, the technology ecosystem for most firms is a hodge-podge collection of various tools that rarely integrate well. Compounded problem! Now the CMO has to deal with multiple streams of data gushing in from all directions.

This brings us to an important question: What’s is the role of analytics in modern organizations? If done right, it should inform decision making, the organization structure and processes, and budget allocation/spend and ROIC. This is not just in the context of marketing but for all the functions of the organization.

If we think about it, the one person who cares the most about these metrics is either the Chairman of the Board, or probably the CFO. Here is an interesting interview with Wes Nichols, former CEO of MarketWatch. He lays out cogently many of the key issues discussed above.

The most intriguing question of all: Should analytics function report to the CFO?

https://www.forbes.com/sites/kimberlywhitler/2017/08/20/how-data-and-analytics-are-changing-the-face-of-modern-marketing/amp/