Marketo makes finance and marketing new BFF

As an ex-finance geek, the notion that finance and marketing could possibly be new Best Friends Forever - or BFF in Facebook parlance - is (cough) laughable. But that's exactly what Marketo attempts with Marketo Financial Management. I like this approach and if I was back in corporate finance then I'd be more than happy to work with marketers using this approach. Here's why:

Start with the right questions

The Marketo business case (registration required)  starts with a topic that presses all my buttons and which has been a personal crusade for more than 15 years - starting with last year's budget and then using custom spreadsheets. It says:

Ideally you want to kick off your plan by first answering the question,  “What’s our organization trying to achieve with its marketing investment
over the next fiscal period?” The goal is to clarify this from both the corporate viewpoint and from a strategic marketing perspective...rather than spending in the same budget buckets as last year, you can focus your investments where it makes most sense this year.

This is about aligning spend and outcomes. Most budget holders find this a difficult concept because they worry about blowing up last year's budget. However, there are ways to overcome this. Say for instance you have spent $/€/£100 in the past. Have you figured the return on those investments? If not then how can know whether it is better to spend 90, 100 or 110? You can't. But if you work on the basis of desired outcomes then you may well be able to justify 110. There is a catch. How will you measure success without throwing money away on a project? We come to that later.

Spreadsheet hell

Prof Ray Panko at the University of Hawaii has been running spreadsheet error studies since the early 1980s. There are even conferences on the topic masquerading under the title 'governance.' And yet time and again I hear the same story: 'We love our spreadsheets.' Mostly from accountants. I'll say straight off the bat: accountants who love their spreadsheets are retarded. The evidence of serious, often catastrophic error is overwhelming. Here's why: spreadsheets are a programming environment that require documentation. Who does that? This from Marketo:

While the person managing the budget has a full understanding of the details, anyone else would be wildly confused because they weren’t involved in creating and managing the spreadsheet. Plus, countless spreadsheets create version-control problems, and don’t offer the  integration, visibility, or control needed to track returns and justify spending.

Bingo! So how does Marketo overcome the problem?

Right tool, right job

Marketo does something that again, as a finance person, I like to see. It forms a bridge between finance and marketing that fosters the notion that collaboration between the two departments leads to good outcomes. They do this by imposing a discipline upon marketing that finance appreciates. Users have well developed methods of budget assembly and roll up, spreadsheet like reporting, visual dashboards and a means to map spend to goals.

These ooze control and governance in ways that are simply impossible with the spreadsheet approach.  It's ticking all my boxes. However, this is only the start. The big operational area comes in monitoring performance so that performing projects get the right funding while those that are failing are killed quickly.

What next?

Having the right tools is only a part of the equation. My experience of marketers is they come in two flavors: those who are creative and those who are hopeless optimists and those who are process droids. My view is that there needs to be a combination of both. Marketers cannot be constrained in their creative efforts but on the other hand, endless spend without outcome assessment is a recipe for disaster.

Setting the right success metrics is key to providing the balance between creative and spend. But more to the point, knowing when to accelerate spend while at the same time being prepared to kill a pet project are arts that require nuanced understanding.

Living in hope

This may sound like wishful thinking but the accounting types I usually meet today are far more focused on helping the business than acting solely as the 'bean counter' for the enterprise. Having run through the Marketo presentation and looked around how they present this topic, I am hopeful that tools of the kind Marketo offer will solve what so far, has often been an intractable problem.

Image credit - Marketo