Addressing Spend Optimization Challenges

At Aprimo Sync! 2019, KPMG’s Jason Galloway shared his thoughts about the growing importance of marketing management, why marketers need to better align with finance to build clout, and the growing pressure for marketing teams to demonstrate their value to the business.

This interview is adapted from KPMG’s 2019 Sync Presentation presented by Jason Galloway.

Aprimo Mobilizer: Let’s start with a hot topic: marketing management. Marketing management isn’t new, but just about every report we read says that marketers are spending a lot more time on the concept. Why do you think that is?

Jason Galloway: You’re right about that! It’s interesting because the new concept isn’t planning, but how you talk about it. When I talk about marketing management, I don’t think about it as a one-time activity, a one-time thing to sort of do and just check a box. I really look at how do you actually build a financially focused and aligned organization—that’s what marketing leaders care about, because that’s what their boss, the CEO, cares about too!

Aprimo Mobilizer: It’s obviously good to be financially focused and aligned—no one would argue against that—but why do you think it’s more important now than before where marketing seemed always to focus on things like new customer acquisition with flashy marketing?

Jason: Let’s look at a bit of history of business to answer this. If you think about the early 1900’s, it was really this “Age of Manufacturing.”  Then the 1960s came and now we’re in the “Age of Distribution”—think Walmart or Toyota. Then you have the 1990s and the “Age of Information” with Yahoo! and Google. So, to answer your question, where are we now? Now we’re really in the “Age of the Customer,” but it’s not about traditional customer acquisition.  It’s about how the shift in market power has gone from the brand to the customer. A few major brands no longer control the best marketing channels. Every day is a new dogfight with your competition to get the attention of the customer and that’s why it’s critical to not throw your good money at bad programs!

Aprimo Mobilizer: Thinking about that timeline, it’s crazy how much the world of marketing has changed even since Aprimo was founded 20 years ago!

Jason: I think the really interesting thing is you think about the first jump was 60 years and then it was like 30 years then it was 10 years. We’re constantly being disrupted and our point of view is that the leaders in any given space will be the ones who actually cause the disruption.

 Aprimo Mobilizer: How do we go about creating the right organizational capability to be the disruptive leader?

Jason: It’s this idea of a connected enterprise. It starts by lining up the front, middle, and the back office together to be able to seamlessly synthesize the right financial data to make the right marketing investment decisions. And who should be leading this transformation? We think the front office is typically the one who interacts with a customer right and it’s a combination of marketing, sales, and service.

Aprimo Mobilizer: Of marketing, sales, and service, who needs to bring the other two to the table to execute?

Jason: Of those leaders, I think it should be marketing, naturally. Marketing is typically the first touch point with a customer, and, in most cases, a customer really feels like they’re interacting with the “brand” when they engage with marketing. The struggle that we find with this though is that marketers have been challenged with the ability to create transformational change. Every other leader is constantly asking marketers if they have the credibility or the capabilities to make these big changes.

Aprimo Mobilizer: Why do you think marketing has that crisis of confidence?

Jason: Marketing itself is being challenged and, in a way, it’s under attack now. While it is interesting that the average tenure of the Chief Marketing Officer is increasing (I think they’re at three years now so congratulations! That’s better than the previous average of two years.) something like less than half of all companies have marketing lead their tech activities. So, it’s really a matter of stepping up to the plate. If you’re going to drive that innovation and growth shouldn’t marketing be leading more of that?

Aprimo Mobilizer: Do you think marketing lacks the tech prowess or is it something more?

Jason: It’s something more, it’s credibility. It’s impossible to start answering questions like ‘How do we start to be financially focused’ when you struggle to answer basic questions such as ‘How much money did we spend today?’ Something like 11 percent of total enterprise spend is marketing. For consumer-oriented businesses it’s higher—about 17 percent. That’s a very large chunk of money for an organization to spend when that function, in a lot of cases, can’t answer those basic questions. That’s where marketing starts to lose credibility.

Aprimo Mobilizer: Something that is always on people’s minds but maybe isn’t broadcast too much is the pain of big changes versus implementing light improvements on the status quo. Do you think it’s worth the pain to change?

Jason: Good question. That’s what all marketing leaders are asking themselves, too! Here’s an interesting takeaway: when the CFO and the CMO are more aligned with each other, marketing’s overall budget is about three times higher. So yes, it’s worth it to change! It really is valuable to the marketing organization to see the finance organization as an advocate for you.  Or as a partner rather than an enemy.

Aprimo: Is that why it’s so important to take marketing measurement seriously as a strategic digital transformation initiative?

Jason: Absolutely! It’s interesting talking to clients that spend billions and billions of dollars on marketing and yet they still manage it all in an Excel spreadsheet (with an army of Excel wizards trying to maintain it). How can you expect to have credibility in the organization if you’re still managing a billion dollars in marketing spend in an Excel spreadsheet? You can’t measure, you can’t report, you can’t do your job. But within something like Aprimo you can do the job right and that’s how you build credibility and get access to that critical data I mentioned earlier that gives you the confidence to make the best decisions possible.

Aprimo: Thanks so much for your time Jason!

Does your organization have an opportunity to improve how it optimizes marketing spend?  You can learn more about the capabilities of Aprimo Plan & Spend by attending the Plan & Spend Forum.

You can also learn more about KPMG services by visiting: https://www.kpmg.us/alliances/kpmg-aprimo.html

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