Why are CFOs now part of the CMO meetings?

There was a time when marketing budgets were largely discussed between the CMO and the management. The marketing team would put forward its plans, explain the need for advertising and promotions, and seek the necessary funds to take the brand to the market. The finance team would examine the numbers and approve the budget. But the situation today is somewhat different. CFOs are increasingly becoming part of the CMO's discussions, and there are good reasons for this change.

Marketing Needs Budgets Throughout the Year

A CMO cannot build a brand without spending money. Whether it is launching a new product, promoting an existing brand or increasing awareness in the market, every activity requires financial support. Advertising, media planning, consumer promotions, digital campaigns and market activation all come at a cost.

More importantly, marketing is no longer a seasonal activity. Brands need to be visible throughout the year. Festivals offer opportunities to connect with consumers, while sporting events provide another platform to reach large audiences. There are product launches, retail promotions, digital initiatives and occasions when competitors step up their advertising. A brand cannot afford to go quiet simply because its annual campaign has ended.

This means the CMO needs to plan expenditure across the year and make provisions for opportunities that may not have been part of the original plan. However, the finance team also needs to know how much the company can afford to spend and whether these activities fit into its larger business plans.

The CFO Wants to Understand the Returns

This is where the CFO enters the conversation. Businesses work on the principle that investments must deliver returns, and marketing cannot remain outside this expectation. The CFO is naturally keen to understand how much is being spent, what the company expects to achieve and whether the investment makes commercial sense.

For a CMO, a campaign may be an opportunity to build awareness, improve brand recall or strengthen the brand's position against competitors. The CFO may look at the same proposal and ask a simple question: what will the organisation get in return?

Neither perspective is wrong. The challenge is to bring them together.

Marketing does not always deliver immediate sales. Some campaigns are meant to build familiarity and trust, and their impact may become visible only over time. At the same time, a CMO cannot keep asking for money without explaining the purpose of the expenditure. There must be a reasonable way to evaluate whether the campaign is doing what it was expected to do.

Media Negotiations Are No Longer Just the Marketing Team's Business

Another reason for the CFO's involvement is the growing size and complexity of media investments. With brands using television, print, digital platforms, outdoor media and other channels, the money involved can be substantial.

CFOs may join the marketing team during negotiations with media agencies and media owners. Their involvement can help the company examine rates, understand the costs and negotiate deals that make better commercial sense.

But the lowest price should not automatically become the deciding factor. A media deal may look attractive because of the discount offered, but the real question is whether it delivers the required reach and connects the brand with the right audience. Saving money on a campaign that fails to achieve its purpose is hardly a saving.

The marketing team brings its understanding of consumers, media choices and brand requirements. The finance team brings its understanding of costs and commercial terms. Together, they can arrive at decisions that serve the business better.

A Different Perspective Can Make a Difference

CMOs and CFOs do not necessarily look at business through the same lens. A CMO may see an opportunity in a major sporting event or a festive campaign and want to move quickly before competitors take advantage of it. The CFO may want to examine the likely expenditure, the expected returns and the financial risks before agreeing to the proposal.

Sometimes, the CFO may raise questions that the marketing team has not considered. Is the proposed investment necessary at this stage? Could the same money be used more effectively elsewhere? Are we spending because there is a genuine opportunity, or because every competitor is doing the same thing?

Such questions can help the CMO look at a proposal differently. Equally, the CMO must be able to explain why an investment is necessary and why its benefits may extend beyond the immediate sales figures.

This exchange of views is useful, provided it does not turn into a contest between two departments.

Knowing When Spending Is Going Beyond the Limit

There is another advantage to having the CFO involved in marketing discussions. A CMO may be enthusiastic about several opportunities and may want to pursue them all. But the cumulative cost of these activities can sometimes become difficult to justify, particularly when the expected returns are not coming through.

Regular discussions with the CFO can help identify such situations early. They can review the expenditure, examine the results and decide whether a campaign needs to be modified or whether the money should be redirected to another activity.

However, this cannot become an exercise in cutting budgets whenever the numbers do not look encouraging. Marketing also requires continuity. A brand that cuts its spending without considering the longer-term consequences may lose visibility and give competitors an advantage. The CFO needs to understand this reality just as the CMO needs to recognise the financial limits within which the business must operate.

Leave the Egos Outside the Meeting Room

Ultimately, the growing involvement of CFOs in CMO meetings should be seen as a positive development. It brings marketing and finance closer at a time when businesses need both strong brands and sound financial management.

The CMO should not view the CFO as someone who is only there to question expenditure or restrict budgets. Similarly, the CFO should not look at marketing merely as a cost that needs to be reduced. Both have an important role to play in the organisation's growth.

The CMO must build brands, create awareness and keep consumers interested. The CFO must ensure that the money invested is used responsibly and that the business remains financially healthy.

When both understand each other's responsibilities, the discussion moves beyond budgets and approvals. It becomes a conversation about what is good for the organisation.

There should be no chips on shoulders and no departmental barriers. The objective is the same: to build a stronger business, create sustainable growth and make the organisation more profitable.

Disclaimer: The views expressed here are solely those of the author and do not in any way represent the views of exchange4media.com.