In the current economic environment, where the shadow of a slowdown looms, every peso of the marketing budget is scrutinized under the relentless lens of resource optimization. According to the report The Effectiveness Equation by Google, one of the main threats to the marketing budget is not a lack of results… but a lack of understanding between those who execute it and those who approve it.
The gap between Chief Marketing Officers (CMOs) and Chief Financial Officers (CFOs) is deeper than it seems. While CMOs work with KPIs such as awareness, consideration, and market share, CFOs focus on pure financial metrics: immediate return, efficiency, profitability.
The result is a dialogue of the deaf. And when it’s time to make budget decisions, the lack of trust between departments ends up hurting marketing impact.
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How serious is the disconnect between CMO and CFO?
The data from Google’s report is striking: although most CFOs believe collaboration with marketing is effective, only 43% of CMOs agree. This reveals an asymmetrical perception of joint work that, at its core, reflects structural differences in how value is understood.
Jane Wakely, Global CMO of PepsiCo, explains it clearly: “CFOs don’t debate how to measure financial performance. What would really improve marketers’ credibility worldwide is agreeing on the most important performance metrics.”
The lack of a common measurement framework fuels suspicion: CFOs fear marketing exaggerates its impact; CMOs feel finance underestimates their strategic contribution. This mismatch not only erodes trust: it hinders resource approval, stalls key projects, and limits innovation.
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What’s at stake when the marketing budget is weakened?
In times of economic uncertainty, marketing is often the first area to face cuts. But this knee-jerk reaction has long-term consequences. Google warns that every dollar not invested in marketing costs up to $1.85 to recover lost market share.
Furthermore, studies cited in the report reveal that for every quarter without advertising investment, a company can lose up to 2% of its future revenue, and take three to five years to regain that ground. In other words, cutting the marketing budget for “savings” can end up being extremely costly.
It’s also emphasized that marketing not only drives sales: it strengthens pricing power, reduces consumer elasticity, and improves brand loyalty, which protects the company during adverse economic cycles.
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Why isn’t short-term ROI enough?
One of the big mistakes marketing teams make is relying solely on short-term return on investment to justify their work. But this approach is limited. As the study reveals, 50% of marketing impact occurs between months 5 and 24, long after the campaign has ended.
If only the immediate is measured, the residual effect of marketing on positioning, recall, recommendation, and perceived value is ignored. That’s why Google proposes a mixed approach that combines short- and long-term metrics, such as:
- Total ROI (return on the entire investment)
- Marginal ROI (return on each additional peso invested)
- Customer Lifetime Value (CLTV)
- Incremental market share
These tools help translate marketing concepts into variables that finance can understand, evaluate, and support.
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How can CMO and CFO better collaborate to protect and optimize the marketing budget?
The report suggests that the first step is to build a common framework of understanding and shared objectives. This includes:
- Designing a common KPI language. It’s not about marketing speaking like finance, but building bridges: for example, translating awareness into incremental value through mixed models.
- Involving finance early in the planning phases. This allows the CFO to understand the logic behind marketing decisions and, in turn, align both departments’ goals from the start.
- Demonstrating sustained marketing profitability. Beyond tactical campaigns, it’s essential to show how brand investment generates intangible assets with long-term return, such as loyalty, recognition, and pricing power.
- Adopting a culture of experimentation with shared metrics. A/B testing, attribution models, and marketing mix modeling can help make more objective and transparent decisions.
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One of the most illustrative cases is that of a personal care brand that raised its prices by 14%. Thanks to its strong previous brand investment, sales only dropped by 7% (instead of the projected 10%). Result: +7% in net revenue.
These types of decisions are only possible when finance and marketing understand together that brand equity has tangible and measurable value. When communication breaks down, it’s not just numbers that are lost, but strategic business opportunities.
How to save the marketing budget?
Google’s report makes it clear that the conflict between CMO and CFO is not inevitable, but it is urgent to resolve. Companies that manage to align strategic vision, financial goals, and marketing capabilities will be the only ones able to sustain long-term growth.
The marketing budget should not be seen as a variable cost, but as an investment in the brand’s future. To achieve this, more than just data is needed: it requires collaboration, empathy, and a common language that turns effectiveness into a shared equation.
