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Marketing Reporting to Finance? Surely the Sky Must be Falling.

The marketing world was all a twitter last week when it was announced that Twitter’s marketing group would now be reporting to the CFO.CFO on Twitter

I found the opinions and reporting from marketing folks to be very Chicken Little. Here are some reports.

Twitter gives control of its hapless marketing department to its chief financial officer – The Verge, May 5, 2015

Marketing TwitterSix Pixels of Separation Blog by Mitch Joel from Mirum

CFO as Marketing Chief? Maybe Not as Unusual as You Think (or Maybe So)Advertising Age, May 11, 2015

Most of my CFOs would shy away from taking responsibility for marketing, yet a good number of them have overall responsibility for important areas outside of Finance. Now, really, what does a Finance trained CFO understand about areas like Human resources and Information technology ?

The only important difference between HR and IT‎ and Marketing is that Marketing is seen as a lever to drive revenue, and that areas like IT and HR are good old support functions.

Yet, wait a minute.

  • Which C-Suite executive is looked at as a potential successor to the CEO?
  • Which ‎C-Suite leader is most often called upon to become Chief Operating Officer, either in conjunction with continuing as CFO or as a stand alone role?
  • Who at the executive table is volunteered for dealing with the most challenging and difficult parts of a business?

That’s right. The CFO.

Now what led Twitter decide to give overall responsibility of Marketing to its CFO in a company ‎who’s entire business is about marketing? We’ll never know for sure.

If there is one thing I’ve learned in my years in executive search and my weekly reporting on CFO Moves is that the official story and what is really happening behind the scenes can some times sound like they are fiction written in different genres.

But that won’t stop me (or others) from speculating.

In the Twitter situation, it seems that Marketing is falling under the purview of the CFO while the company is looking to hire their best next marketing leader.

The positives for Twitter of this temporary move could include:

  • Someone needs to take responsibility for this very important function. Why not Finance?
  • There could be no better way for the CFO to learn the marketing function than by taking responsibility. Most CFOs learn well under pressure.
  •  CFOs love to challenge the status quo. This is an opportunity to shake things up‎.

Most importantly, in a comp‎any where marketing is key to the product and the mission, the CFO needs to truly understand the value of marketing so they can say yes to the big dollars needed to fund the Twitter marketing machine.

So, is the sky falling?

Comments

EMERSON GALFO
Title: CFO
Company: C-Suite Services
LinkedIn Profile
(CFO, C-Suite Services) |

Here are my thoughts on it.

1. Noto is an analyst by training. Surely he will "analyze" the heck out their Marketing initiatives.
2. Twitter is in a marketing rot and a fresh look (someone who has NOT handled) Marketing will be good for them.
3. Twitter's CMO search has been going on for a long time without finding the right person.
4. Noto is consolidating power. Aside from Marketing, he heads Corporate Devt, Strategy and Real Estate. Kind of like ONE voice to speak for the company aside from Costelo who doesn't have a good PR rating right now.

Ironic that Noto's initial Twitter claim to fame is his misstep on a tweet! I read somewhere that Noto's first job is to market himself within the office as employees are asking why he is getting $70M but employees (aside from engineers) can't get a raise and be at market rates.

Gary Cokins
Title: Founder and CEO
Company: Analytics-Based Performance Management L..
(Founder and CEO, Analytics-Based Performance Management LLC) |

Samuel ... Although your suggestion will be viewed as radical it is points to an issue. There is a wide gap between the CFO and marketing and sales. It needs to be closed.

Customers are the source of shareholder wealth creation. Marketing and sales' goals have been to grow market share and increase sales. It should be to increase PROFITABLE sales. Accounting information helps answer which types of customers are attractive to retain, grow, win-back and acquire as well as how much to OPTIMALLY spend doing these with offers, deals, price discounts, and marketing campaigns. I explain why in this article I authored in this link:

http://www.imanet.org/docs/default-source/sf/2015_02/02_2015_cokins.pdf?sfvrsn=2

You have raised a relevant topic. Thanks.

Gary ... Gary Cokins

James Scott
Title: Consulting CFO
Company: Early Growth Financial Services
LinkedIn Profile
(Consulting CFO, Early Growth Financial Services) |

More than ever marketing is now being driven by predictive analytics, algorithms and data rule and trump the old "gut feel" methodologies. More information to manage, no wonder the role is moving towards finance. SaaS CRM packages aggressively sell themselves based on predicted ROI, so moving this to the CFO is no surprise.

Robin ong
Title: CFO
Company: Affinity Equity Partners
(CFO, Affinity Equity Partners) |

With more diverse stakeholders coming into Twitter, it seems natural to pass marketing to the Finance guy. I mean, how convenient? I remember the first time when my direct boss turned out to be a formerCFO whom had excelled in different health settings. Imagine everytime when I talked to him; he would asked me to speak his language. "Make me a forecast! Give me a spreadsheet !"
So long Twitter, for your demise is just around the corner. The CFO will strive his best to kill all forms of gut feelings aka creativity. Those who are savvy in numbers crunching will survive. To those of you whose passion lies in brand engagement, well, it is time to look elsewhere.

Randall Bolten
Title: CEO
Company: Lucidity
LinkedIn Profile
(CEO, Lucidity) |

Gosh, that’s a little unusual, and probably not the start of a trend. But here are some possible reasons for this particular management move:

1. MARKETING’S NEEDS. The biggest current flaws in Twitter’s mktg dept are ones that particularly lend themselves to a CFO’s expertise.

2. THE CFO’s SKILL SET. This particular CFO, by virtue of his skill set or perhaps because of some prior experience, actually looks like a potentially good Mktg VP.

3. GROOMING. The CFO is under consideration as the next COO or CEO.

4. SIGNALING. This is not a permanent move, and the CEO and CFO both know it. The goal was to send a very loud msg to the entire mktg dept, while a Mktg VP search is underway.

5. WHAT TWITTER MARKETING REALLY NEEDS. Perhaps through an unusual combination of circumstances of industry and company dynamics, a CFO’s skill set actually lends itself to managing marketing.

6. THE CFO LOST A BET WITH SOMEONE.

James Metzger
Title: CFO
Company: Astadia
(CFO , Astadia) |

Sam - I just took over the Marketing department last week and your points above mirror the logic behind my CEO/Boards decision.

Topic Expert
Samuel Dergel
Title: Director - Executive Search
Company: Stanton Chase International
LinkedIn Profile
(Director - Executive Search, Stanton Chase International) |

Congrats James. I'd love to hear about what you end up learning with this new responsibility.
Best,
Samuel

Gene Siciliano
Title: President
Company: Western Management Associates
LinkedIn Profile
(President, Western Management Associates) |

I'm with Robin on this. I don't know what's wrong with Twitter's marketing department, unless it's the company's overall business model, but I do know one thing: a move like this is virtually never going to end up well.

Marketing depends on things the CFO is typically not good at, like creativity, market sensitivity, (reasonable) risk taking, vision beyond the numbers. We need both to sort out the best course of action and the best metrics to measure success.

The difference between finance and marketing is one of the strengths of any company, because only through that "conflict" can the best ideas come to the forefront. It's the job of the CEO to blend them into the company's strategy. Without that conflict - likely to be stifled when one functional head (either one) controls both - the strategy is seriously hampered, perhaps fatally so.

Randall Bolten
Title: CEO
Company: Lucidity
LinkedIn Profile
(CEO, Lucidity) |

I’m inclined to agree with Gene & Robin here. Robin’s characterization of CFOs as soul-less number crunchers is a little unfair, and it may be that Noto actually has a skill set to be a good marketing CFO, but in the long run marketing and finance require two fundamentally different mindsets. And as Gene points out, the tension between those mindsets is critical to most successful businesses.

So notwithstanding my somewhat flippant earlier comment, for Twitter’s sake let’s hope this is some sort of interim strategy.

Topic Expert
Samuel Dergel
Title: Director - Executive Search
Company: Stanton Chase International
LinkedIn Profile
(Director - Executive Search, Stanton Chase International) |

"CFOs as soul-less number crunchers"

Sounds like a great blog topic, no?

Robert Ewalt
Title: Exam Development Manager
Company: Institute of Certified Management Accoun..
(Exam Development Manager, Institute of Certified Management Accountants) |

I think we all agree that the CFO, and the finance function, can make great contributions to meeting corporate goals. But, in general, I can see Finance diluting their reputation for being an impartial "umpire" if they are also managing a team competing for corporate resources. Maybe Randall has it right - this is a temporary move until a permanent Marketing VP is found.

Richard Barrett
Title: Consultant
Company: Independent
(Consultant, Independent) |

In my experience many marketing folk are innumerate and having the business function that spends a heap of dosh and is responsible for orchestrating revenue generation report in to the CFO may make good sense.

Topic Expert
Samuel Dergel
Title: Director - Executive Search
Company: Stanton Chase International
LinkedIn Profile
(Director - Executive Search, Stanton Chase International) |

Media reports say that the move is Interim. I'd tend to agree with the sentiment, until a new CMO is hired.

What will be interesting to see (as a fly on the wall) is how the CFO and the new CMO will work together....

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