There has been a recent surge of demand for accountability and transparency in marketing. Unfortunately, many marketers cannot deliver on this expectation because they’re missing essential building blocks in their marketing technology stack. Most marketing systems lack the ability to set clear objectives and to report variance from these objectives. This is a basic requirement of any marketing governance system.
What is a marketing governance system?
A proper governance system has three fundamental capabilities:
- The ability to plan your investments and objectives
- The ability to measure actual business outcomes
- The ability to compare actual results to the planned results
Every CFO provides monthly reports that show budget (the plan), actuals, and variance on financial objectives. Now CMOs are being asked to produce similar reports that show the marketing plan, actuals (KPIs), and variance on marketing objectives.
Unfortunately for CMOs, most marketing systems lack the tools required to set a clear and accountable marketing plan. Without a plan, it’s impossible to report on variance. So, marketing dashboards simply report in the rear-view mirror on what happened yesterday and never answer the critical business question, “are we on track to achieve our objectives?”
Setting marketing objectives is hard
Unlike finance, where money is the universal metric, marketing has dozens of key performance indicators such as net media cost, impressions, clicks, GRPs, visits, downloads, purchases, ROMI, and many more. If you’re like most marketers, you’ve got several campaigns running concurrently each with scores of placements with different timeframes, flighting, and spending levels. Without the right system in place, knowing even the simplest objectives, such as how many impressions to expect during a given period, is a major challenge.
Reporting against marketing objectives is even harder
Reporting on finance objectives used to be a daunting task back in the old days when accountants wore sleeve garters and did their work on paper ledgers. Today, in stark contrast, virtually every finance department has a good system in place to answer these questions with a click of a button.
A lot of marketing plans are still stored in Excel spreadsheets, today’s equivalent of the paper ledgers of the past. It’s no wonder why CFOs often accuse those in the marketing department of being irresponsible and out of control. By comparison, they are.
It’s time for a marketing governance system
It’s clear that a wild west mentality will no longer be tolerated in marketing. It’s time for marketers to take a cue from the finance department and begin the journey of installing a solid marketing governance system. If you’re in marketing, your job may depend on it.