Imagine a corporate finance department operating as follows: Every time employees spend money on something reimbursable, they stuff a paper receipt through a slot in a warehouse door. Every time they generate a purchase order, they print it out and stuff it in the same slot. When checks arrive, they go straight from the mailroom into the slot. The warehouse fills to the brim with sheets of paper. Then, six weeks before the company’s quarterly earnings call, finance sends dozens of analysts into the warehouse to sort through all the papers and determine whether the company hit its numbers.
It would be ridiculous. And yet this is essentially how marketing departments manage spend and performance data right now. Marketers let their data remain in a state of utter chaos until they need it, then they start digging. Marketing today is highly complex, requiring a myriad of specialized tools and teams to execute. The resulting spend and performance data is scattered across multiple departments, a data warehouse or two, scores of different tools and a half dozen agency partners. Each generates uniquely formatted reports that flow into marketing and sit in email inboxes or printed on desks.
When the CEO says to marketing, “We’re spending all this money. Did it work?” the mad scramble begins. Marketing analysts and data scientists wielding data exploration and visualization tools are thrown into the chaos to sift through haystacks of piecemeal data looking for needles of insight. Weeks later, a tentative and heavily caveated analysis pops out. A CFO who managed data this way would be fired on the spot.
CMOs aren’t being fired for it yet. But 45% of executives now view “marketers’ limited competency in data analysis as a major obstacle to implementing more effective strategies,” according to the Economist Intelligence Unit’s Mind the Marketing Gap report.
Finance doesn’t manage its data this way, of course. In fact, finance is typically held up as a beacon of order to marketing’s chaos. What can marketers learn from the way finance manages its data?
1. Be intentional and consistent. The moment a company is created, the finance team “sets up the books,” establishing a general ledger or chart of accounts that lays out how finance will categorize spending and report on performance to plan. Similarly, marketers should begin at the end. What reports will they want at their fingertips? What reports are asked for constantly? Probably spend and performance reporting by region. And by brand and category, if it’s a portfolio brand. Customer segments, too, if relevant. This, in effect, becomes marketing’s “chart of accounts”—the standard reporting categories for all the data that flows into marketing.
2. Structure data on the way in. Don’t leave marketing data in a tangle of different formats, taxonomies, granularities and definitions and assume you can normalize and make sense of it all later. As reports come in, pull out the metrics that matter and ensure they’re tagged according to marketing’s chart of accounts. If it’s not tagged, make it right or don’t bring it in. (Finance doesn’t reimburse employees unless each expense is properly tagged.)
3. Prioritize speed and consistency over perfection. Standard financial reporting is continuously available because all data is structured according to the chart of accounts on the way in. Finance may only report results to Wall Street quarterly, but at any given time the finance team can see where things stand. The key word is standard reports—those that map to general ledger categories such as hardware, software and travel. There will always be ad hoc analyses that require an analyst to data-dive, but don’t let the perfect be the enemy of the good. Marketing struggles with the timely and reliable delivery of even basic reporting, so marketers should start there and advance over time.
And advance marketers must. Because when nearly half of corporate bosses view the marketing department as bungling its data and tripping over its own feet strategically, the seat is already hot. And it will only get hotter.