Marketing has an image problem. Despite its role in driving growth, marketing is still viewed as a cost centre rather than a value generator.

When facing tough times, companies cut marketing first, while other "core" functions are left untouched.

But marketing has never been so measurable, so why does this perception still persist?

To defend the spend, marketers must first understand the causes of this bias and then change the narrative.

Marketing as soft spend

Historically, marketing was advertising - TV commercials, billboards, sponsorships – hard to measure, with no direct connection to sales, driven more by vanity than commercial sense.

With marketing costs being mainly external, in agencies and networks, marketing was seen as “not a core competence”. This made it a soft target. Compared with other cost centres, cutting marketing spend is quick and easy and would not necessarily mean redundancies.

Over the years, marketing has become way more sophisticated, but the perceptions remain.

In tough times, the upper funnel gets squeezed. And tactical lower funnel activities, which show a clearer path to sales, survive. Just.

So why can’t marketing be seen as an investment?

Finance speak vs. Marketing speak

CMOs talk a different language to their CFOs and CEOs.

While finance talks about revenue and EBIT, marketers talk about NPS, engagement and conversions.

This misalignment of language reinforces the view that marketing is an indulgence rather than a value generator. At the board meeting, it’s the dessert, not the main course.

To bridge this gap, CMOs must talk about financial outcomes.

That means talking about the impact they have on revenue and profit, on improving win rates, increasing average order value, cost per acquisition, customer lifetime value and ROI.

Proving value

But marketing has always struggled to show a clear ROI.

Modern customer journeys are non-linear, multi-channel and complex, particularly in B2B and CPG.

One purchase decision might involve multiple touchpoints with multiple decision-makers, even in B2C (think how many people are involved in buying one family holiday!).

Attribution models and psychometrics haven’t made it any easier - at least last-click was simple to understand!

Marketers have shrunk back, hoping no one will notice they are no more data-driven now than they were 10 years ago, creating “firework campaigns” that look great but make no proven impact on the business.

But in all this confusion, are we missing the obvious? ROI is merely the value gained over the cost to win it. If we spent $10 to win $20, that’s a 2x ROI. At a high level, it’s not hard to figure out.

Changing the narrative

So how do we shift the narrative.

1. Start with Business Objectives. Every campaign, every marketing activity, must start with what the business is trying to achieve, tactically or strategically. Win sales. Increase awareness. Stop churn. That’s the WHY of marketing. You don’t need to be a marketer to understand that.
2. Agree what success looks like. Understand your stakeholder’s targets and agree Marketing’s contribution to that. Set simple targets, key results, for each campaign.
3. Use ROI as the acid test. This is the only marketing metric the CFO wants to hear. And it should be the only metric you care about. Any activity that doesn’t produce a positive ROI should be cut. Anything that does, should be invested further in.
4. Figure out brand’s contribution. The ultimate purpose of brand is to accelerate your performance marketing. It produces an uplift. Find out what percentage that uplift is, and you have a cost-justification for brand.
5. Use proxy metrics. In B2B, long sales cycles make it hard to measure end to end. So produce a proxy value for a lead generated. It takes 10 SQLs to close one deal worth a $1m… each SQL must be worth $100k.

There is also a big re-education piece:

• Start with marketers. Train them to be fluent in finance speak, able to measure ROI, forecast outcomes and contribute to investment discussions.
• And then stakeholders. Educate them to see marketing as key to hitting their numbers, as a door opener, a weapon against competitors, a creator of value.

A return on investment

Until marketing is understood in financial terms, it will remain an indulgence.

To defend the spend, CMOs must translate their impact into language that stakeholders understand.

Only then will marketing be seen, not as a cost to cut, but as a lever to pull for returns.