Brand building is increasingly important as B2B prospects come to a decision before ever talking to sales, yet a new report finds 69% of CFOs view brand marketing as a cost center
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Mindshare has always been crucial to marketing, but the sum total of these variables means it’s more important than ever. In effect, it’s made branding cool again.
There’s a lot of evidence that brand building is valuable.
For example, most B2B salespeople would much rather call on a prospective buyer that’s familiar with their brand than unfamiliar.
Some studies show strong brands can command premium pricing. You can see this every day in the grocery store: the generic products are on a lower shelf.
The value of brand building is hard to prove
Most marketing leaders believe strong brands drive growth. Yet this is really hard to prove in a spreadsheet and CFOs are a skeptical audience.
A new report – Closing the CMO-CFO brand value gap in B2B – highlights this skepticism. The report is based on a survey commissioned by B2B agency Transmission and conducted by the research firm Savanta.
In total, they polled 414 B2B respondents in North America, Europe and Asia-Pacific region. About half were senior financial leaders, such as CFOs, and the other half were senior marketing leaders including CMOs.
Here are some of the findings that stand out:
- 42% of CFOs do not believe brand health affects business health;
- 45% of CFOs do not believe brand marketing is a critical marketing function;
- 69% of CFOs view brand marketing as a cost center rather than a growth driver; and
- 79% of CFOs rightfully point out there are no reliable metrics that tie brand marketing to revenue.
Some level of skepticism is healthy – but this study suggests CFO are a pretty rough crowd. Before you can even start making a case for brand building, you’ve got to tutor the guardians of the budget on the prerequisite courses without damaging any egos.
Ironically, this is exactly the same hurdle B2B salespeople face when they call on prospects that have never heard of your company before.
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How CMOs can make the case for brand building
So, how can CMOs make the case? There isn’t a quick and simple answer, but buried in the report is a solution that CFOs themselves suggest.
When asked how CMOs could better align with finance, CFOs suggested the following:
1. Provide “more accurate tracking and reporting of brand program metrics.”
2. Have “a better understanding of commercial goals and objectives.”
3. Improve “knowledge and use of marketing technologies.”
4. Use “customer data and analytics more effectively.”
5. Have “stronger accountability for marketing results and ROI.”
In essence, CFOs are saying, “Meet us where we are.” In the process, marketing will earn the trust and confidence they need to invest in necessary activities that don’t show in a spreadsheet.
When we gain that confidence, I wouldn’t squander it on a large display ad campaign. However smart marketing and communications activities – PR, content marketing and events – that can both build and brand and drive growth are pragmatic options.
It’s worth pointing out there is a place on a company balance sheet that is both familiar to CFOs and articulates the value of intangible assets like a brand. It’s called goodwill.
Indeed, the report says, “An analysis of 13,000 of the world’s largest publicly traded companies shows that brand, as an intangible asset, accounts for up to 40% of business value.”
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The full study is an interesting read with a lot more detail. You can download the report here or read a summary of the findings on The Drum: Do CFOs value brand building in B2B? We asked them.
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Image credit: cited report and DALL-E, “many valuable brands on billboards in the style of van Ghoh”