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Can marketing and finance speak the same language?

March 8, 2009

Professor Robert Shaw discusses how in these tough economic times, organisations must ensure that their marketing continues to reap financially what is sows creatively.

An important new report “Return on Ideas” has just been published. Its subject? How any organisation that has to market itself can be more efficient, effective and value adding. This is a frustrating business challenge and what we’ve delivered isn’t theoretical or waffle. The report is packed with practical suggestions, checklists and case studies, solidly based on candid research on over 100 organisations, large and small and across industries. When we shared it in draft with a sample of CIMA members they gave it their unanimous thumbs up.

The need for this guidance paper came from joint discussions between the Chartered Institute of Management Accountants (CIMA), the Chartered Institute of Marketing (CIM) and the Direct Marketing Association (DMA). It emerged that members of all three professional bodies were concerned about the value contributed by marketing and what constitutes sound evidence about its value. Pivotal to this, they also recognised the need to drive productive teamwork between finance and marketing working together.

Why do finance and marketing often have meaningless discussions?

Marketing’s costs have long been the subject of discussion. A century ago the saying “half the money I spend on marketing is wasted. The trouble is I don’t know which half” was uttered by Lord Leverhulme, founder of Lever Bros and first President of CIMA. Yet finance and marketing seldom have meaningful discussions about this problem.

Finance and marketing sometimes have disjointed working relationships. They often ask different questions and they answer them in different languages. Questions that finance ask focus too much on budgets and too little on performance; and marketing focus too much on brand awareness and image and too little on sales and profit performance. Everyone retreats into their own technical jargon, each bewildering the other and wasting lots of time pursuing irrelevant questions. Ultimately any attempt at finance-marketing dialogue gets derailed.

The Infinity Model

The essence of this candid research has led to the creation of the “infinity model” – an innovative framework designed to put the finance-marketing dialogue back on the rails. Full of practical self-help exercises, questions, checklists and illustrative case study examples, the report is prescriptive about what constitutes good and bad evidence about marketing efficiency and effectiveness, and it enables managers to decide for themselves what is feasible. The model can be tailored to the needs of all types and sizes of organisation.

What we found is the best organisations have a positive creative tension between financial rigour and the marketing imagination. More specifically this involves:

• harnessing the marketing imagination to create value adding ideas
• predicting how much financial value these ideas will contribute
• delivering and demonstrating that value really was created
• establishing learning that will improve future ideas, predictions and results.

This creative tension is found in all their working practices, and these are things that any other organisation can and should copy. Managers can assess their adherence to this model by answering the questions listed in the report’s checklists.

Figure: the infinity model of marketing value creation

Figure: the infinity model of marketing value creation

Figure: the infinity model of marketing value creation

By adopting this double cycle, the failure rate of marketing ideas and associated waste can be reduced significantly. It can never be totally eliminated because customers are forever changeable and are never completely predictable. Good senior management accept uncertainty and risk as an innate part of marketing. They do not try to force a ‘right every time’ philosophy; instead they manage uncertainty using the best methods available.

What can companies do to put the report into practice?

A lot of progress can be made in just one day, through holding a workshop with finance and marketing. By discussing the questions listed in the report, participants can find out how they can do a better job of making marketing more efficient, effective and value adding. In the process they will start to speak a common language that focuses on performance as well as conformance.

Having a follow-up session with the managing director, or business unit heads, can be helpful too. The report sets out departmental specific questions to be answered by the key players. A common issue that such discussions can resolve occurs when business units hold the marketing purse strings, and they use the marketing department as an internal service function. All too often such expenditure is squandered on vanity projects, whose sole effect is inflation of managerial egos, without sound commercial justification.

Quick wins from these workshops can be put into practice with immediate benefits. A longer term programme of change may be identified too, and the report contains a road map to plan out this more strategic approach.

So what are the benefits?

Ten of the benefits of this are:

1. Making the marketing budget work harder
2. Holding Agencies rigorously to account for results
3. Eliminating production wastage and its causes
4. Making marketing assets and collateral (images, video, text) work harder
5. Maintaining media effectiveness while reducing costs
6. Getting Agencies to do a better job in less time
7. Avoiding surprises in budget commitments
8. Wasting less time on budgetary bureaucracy
9. Faster marketing approvals with fewer errors
10. Forecasting more accurately


This report is aimed at giving practical help to any organisation that has to market itself. Free to CIMA, CIM and DMA members, grab a copy of the report, read it and run a workshop. We believe this is the way of the future for responsible marketing in the 21st century.

Further information about the report can be found at:

Professor Robert Shaw is a veteran observer of marketing and finance, passionate about improving marketing effectiveness, and proficient at penetrating partial and confusing data. Over the past 25 years his analysis and advice has been sought by senior executives in finance and marketing in over 50 companies and professional bodies. He is founder of Demand Chain Partners ( His recent books include Marketing Payback: Is Your Marketing Profitable? published by FT Prentice Hall; and Improving Marketing Effectiveness published by The Economist.