The Budget Squeeze
Gartner's CMO Spend Survey shows marketing budgets have fallen to approximately 7.7% of company revenue—a historic low. CFOs are scrutinising every marketing pound, and the days of soft metrics are over.
Marketing teams face an existential challenge: prove return on investment in terms finance understands, or lose budget to departments that can.
Why Marketing Struggles with ROI
The Measurement Problem
Marketing activities don't always connect directly to revenue:
- Brand awareness doesn't have an immediate sale attached
- Content marketing influences decisions over months
- Social media engagement doesn't equal purchase
- Multiple touchpoints blur attribution
The Vanity Metric Trap
Marketing often reports metrics that don't matter to finance:
- Impressions and reach
- Engagement rates
- Follower counts
- Website traffic
- Email open rates
These are activity measures, not business outcomes. CFOs don't care how many people liked your post.
The Attribution Challenge
When a customer buys, which marketing activity caused it?
- They saw an ad six months ago
- They clicked an email last week
- They searched and found your website
- A colleague recommended you
Crediting any single activity is problematic. Crediting all of them double-counts.
If you can't connect marketing activity to revenue in a way finance accepts, you won't get budget. "Trust us, it works" doesn't survive budget reviews.
What Finance Directors Want
Revenue Impact
Questions they ask:
- How much revenue did marketing generate?
- What was the cost per customer acquired?
- How does marketing ROI compare to other investments?
- What happens if we cut marketing budget?
Clear Attribution
They want to understand:
- Which activities drive which outcomes
- How we know marketing caused the sale
- What assumptions are in the calculation
- Where uncertainty exists
Comparable Metrics
Finance thinks in terms of:
- Return on Investment
- Payback period
- Cost per acquisition
- Customer Lifetime Value
- Marginal return on spend
Building Better Attribution
First-Party Data Foundation
Rely on data you control:
CRM Connection:
- Track leads from source to close
- Record marketing touchpoints
- Calculate actual conversion rates
- Measure revenue by channel
Website Analytics:
- Track conversions, not just visits
- Set up goals that matter
- Connect to sales outcomes
- Understand customer journeys
Sales Feedback:
- Why did customers buy?
- What influenced their decision?
- Which marketing did they remember?
- What objections did marketing address?
Attribution Models
Choose an approach and be consistent:
First-Touch: Credit the first marketing interaction
- Simple to implement
- Good for awareness measurement
- Undervalues later touchpoints
Last-Touch: Credit the final interaction before purchase
- Common default in analytics
- Overvalues end-of-funnel
- Ignores awareness activities
Multi-Touch: Distribute credit across touchpoints
- More realistic
- More complex to implement
- Various weighting approaches
Time-Decay: Weight recent touchpoints more heavily
- Balances awareness and conversion
- Requires judgment on decay rate
- Often a reasonable compromise
The perfect attribution model doesn't exist. Choose one, document your assumptions, and be consistent. CFOs care more about methodology than perfection.
Incremental Measurement
The gold standard: what happened because of marketing that wouldn't have happened otherwise?
Approaches:
- Geographic tests (market A with marketing, market B without)
- Time-based tests (periods with and without activity)
- Holdout groups (some customers excluded from campaigns)
Challenges:
- Requires scale and patience
- Impractical for some activities
- Need statistical rigour
Metrics That Matter
Customer Acquisition Cost (CAC)
Calculation: Total marketing spend / Number of customers acquired
Why It Matters: Direct measure of marketing efficiency. Can compare to customer value to assess sustainability.
How to Improve:
- Reduce cost per lead
- Improve conversion rates
- Focus on higher-converting channels
Marketing-Attributed Revenue
Calculation: Revenue from customers who can be traced to marketing activities
Why It Matters: Shows marketing's direct contribution to top line.
Challenges:
- Depends on attribution model
- Can over or understate impact
- Need clear rules applied consistently
Marketing ROI
Calculation: (Marketing-attributed revenue - Marketing cost) / Marketing cost
Why It Matters: The comparison CFOs understand. Return on investment makes sense across the business.
Presentation: "For every £1 spent on marketing, we generated £X in revenue, with £Y net contribution."
Pipeline Contribution
Calculation: Percentage of sales pipeline sourced or influenced by marketing
Why It Matters: Shows marketing's role in generating opportunities, even before revenue closes.
Useful For: Longer sales cycles where revenue attribution is delayed.
Making the Case to Finance
Speak Their Language
Don't Say: "Marketing drove 50,000 impressions and 2,000 engagements." Do Say: "Marketing generated 150 qualified leads at £80 per lead, of which 30 closed for £75,000 in revenue—a 6:1 return on the £12,000 spent."
Show Your Workings
Finance respects:
- Clear methodology
- Documented assumptions
- Acknowledged limitations
- Consistent application
Finance distrusts:
- Black box "trust me" numbers
- Cherry-picked results
- Changing methodologies
- Implausible precision
Compare Alternatives
What would happen without marketing?
- Lead flow would decrease by X%
- Cost per lead would increase as we rely on sales prospecting
- Brand awareness would decline affecting all conversions
- Competitors would gain share
Present Options
Give finance choices:
- Current budget: X leads, Y revenue
- Reduced budget: Z leads, W revenue (what you'd cut)
- Increased budget: A leads, B revenue (where you'd invest)
Show the trade-offs rather than defending a fixed number.
CFOs don't want to cut effective marketing—they want to cut waste. Help them understand which is which, and you're more likely to protect valuable activities.
Automation for Better Attribution
Technology helps track and attribute:
CRM Integration
Connect marketing tools to sales systems:
- Lead source tracking
- Touchpoint recording
- Conversion tracking
- Revenue attribution
Marketing Automation
Track the customer journey:
- Email engagement linked to outcomes
- Content consumption tracked
- Scoring based on behaviour
- Handoff to sales with context
Analytics Platforms
Unified measurement:
- Multi-channel attribution
- Customer journey visualisation
- Conversion path analysis
- ROI dashboards
Reporting Automation
Regular, consistent reporting:
- Automated data collection
- Standard metric calculation
- Trend visualisation
- Anomaly flagging
Building Budget Resilience
Continuous Measurement
Don't wait for budget season:
- Monthly ROI tracking
- Quarterly review with finance
- Regular attribution audits
- Proactive communication of results
Test and Learn
Demonstrate optimisation:
- A/B testing showing improvement
- Budget reallocation based on data
- Experiments that reduce cost or increase return
- Evidence-based decision making
Strategic Alignment
Connect to business priorities:
- How marketing supports company goals
- Contribution to strategic initiatives
- Risk mitigation role
- Competitive positioning
In a 7.7% budget environment, marketing teams that can prove ROI will survive and even grow. Those that can't will continue to shrink.
Need help proving marketing ROI to your leadership? We help marketing teams implement measurement systems that demonstrate clear business impact.
Book a consultation to discuss your attribution and ROI challenges.
