Six Key Steps to Winning CFO (and CEO) Support for Increased Investment in Brand Marketing

After languishing in the shadow of performance marketing for more than two decades, B2B brand marketing is experiencing a renaissance. The number of blog articles, LinkedIn posts, and other forms of content highlighting the importance of having a strong B2B brand has increased dramatically over the past couple of years.

This growing interest in B2B brand building can be attributed to several factors. For one thing, many B2B marketers are finding that demand generation/performance marketing tactics that worked well only a few years ago have become less and less effective.

In addition, recent research studies by The B2B Institute, Bain & Company, Google, 6sense, and others have provided insights about the B2B buying process that make the value of a strong B2B brand abundantly clear.

Despite the increased attention on B2B brand building, many marketers are reporting that it's still difficult to win support from their CFO and CEO for increased investments in brand marketing programs.

In response to this challenge, several marketing pundits have published articles or guides advising marketing leaders on how to "sell" brand marketing to senior company leaders, particularly the CFO.

One of the better resources I've seen recently is "Selling brand marketing budgets to the CFO:  proof, not promises" by Wynter, a provider of B2B brand tracking and research software. This article describes five steps B2B marketing leaders should take to make their proposed brand marketing spending more likely to win support from their CFO.

Here are Wynter's five steps:

• Link brand investments to improved financial outcomes such as increased revenue, market share, and profit margin.

• Incorporate specific, quantifiable KPIs and targets in the budget proposal.

• Include competitive benchmarks whenever possible. What are your primary competitors spending on brand marketing? How does the health of your brand compare to that of your competitors?

• Make the risks of under-investing in brand explicit.

• Spell out when the proposed brand investments will produce results. In other words, provide a realistic ROI timeline that's supported by credible evidence.

I agree with these specific recommendations, but I have a couple of concerns about the section of the Wynter article that discusses "modeling brand ROI."

First, the article makes developing a credible, evidence-based quantitative model that shows the financial benefits of brand marketing appear to be simpler than it actually is.

And second, this portion of the article uses the term "brand ROI" in an overly broad way, which can make it more difficult for marketing leaders to win the support of their CFO for greater investment in brand marketing.

When You Say ROI . . . Mean ROI (The Sixth Step)

For years, many marketers have used "ROI" as a catch-all term to describe the value of a wide range of benefits produced by marketing activities, including brand marketing activities. Unfortunately, this practice has been perpetuated by marketing pundits and other industry participants who should know better.

Advocates of brand marketing forcefully argue that a strong brand produces several valuable benefits, including:

• Increased share of branded search (an indicator of brand awareness and possible purchase interest)

• Increased response and conversion rates from "performance marketing" programs

• Increased presence in "day-one consideration sets"

• Lower customer acquisition costs

• Increased market share

• Increased revenue (total revenue, not gross margin)

When some or all of these benefits are supported by credible evidence, marketing leaders should include them when discussing increased investment in brand marketing with their CFO. However, none of these benefits constitutes ROI.

Return on investment is a specific financial metric that has a well-established meaning among management and financial professionals. It's a ratio that compares the incremental financial gain from an investment (the "return") to the amount of the investment.

When marketing leaders use "ROI" to describe anything else, they can quickly lose credibility with their CFO, and probably with their CEO as well. If a marketing leader displays a fundamental misunderstanding of this basic financial metric, why should a CFO rely on any other financial estimates or projections the marketing leader provides?

The lesson here is clear:  If you're a marketing leader, you need to be careful to calculate and use financial metrics in ways that trained financial professionals (like CFOs) will see as proper. This will enhance your personal credibility with your CFO and make it more likely that he or she will support your proposed marketing plans.

Image courtesy of Limelight Leads via Flickr (CC).