How CMO's Get Brand Building Investments Approved by the CFO

(Last 1:1 between CMO and CFO of 2023 before the holidays)

*begin*

CFO: Help me understand why we would continue spending on the ad set with the lower ROAS? The focus of 2024 is profitability. I know I'm going to get this question in the board meeting in January. BTW we had to update the forecast for '24. Gotta find $2M of "unproductive" spend to cut

CMO: 4sure. let's do it

CFO: I know air quotes "brand" is important. I'm a believer, but I'm also a realist. I'm the finance guy. How do I know we're not wasting money?

CMO: Well, the objective of the videos ad set is to build brand, build awareness and fill the top of the funnel. The objective of the product ad set is to convert people. We can't evaluate the success or failure of the video ad set by the same standard as the product ad set

CFO: Makes sense

CMO: The brand videos fill the top of the funnel. If we don't fill top of the funnel, we'll run out of people to convert

CFO: For the board meeting- I want to make sure first, I'm convinced, and second, I have the talking points. In the words of Jerry Maguire, "Help me help you"


*choose your adventure from here*


Approach 1:

CMO: Awesome. here you go

1. the objective of the videos ad set is to fill the top of the funnel

2. The objective of the product ad set is to convert people

3. We can't evaluate the success of the video ad set by the same standard

4. The brand videos fill the top of the funnel so we have people to convert

CFO: Anything more specific with a tie to the P&L?

CMO: No. That's always been the issue w/ brand.


Approach 2:

CMO:
 
1. Our brand investment philosophy is this: In the same way we buy behaviors (purchase) with our DR, we're buying behaviors (that have the highest probability of becoming a purchase) with our brand investments

2. The main brand building behavior for '24 is {insert your highest payout leading indicator digital action here...e.g., unpaid branded search, sms subscribers, etc...this is X}

3. Why {X}? we've done a massive amount of data work this year and found that an incremental unit of {X} drives 10 contribution (variable profit) $ within the next 180d. 2 other actions that pay out similarly. Can pivot to them if marginal cost pers or contribution $ payouts diverge materially

4. We're investing $XM, which will generate $XM incremental contribution $

5. We'll start the investments first thing in Jan. We'll see movement in our leading indicator metrics immediately. We won't have to wait a year to see if we did a good job

6. Jan goal is {###} {of X}. Based on the historical monthly payouts of {X}, we should see X contribution $ in the following 30 days

7. You'll get an update from me on the first Friday of every month.
Actuals relative to plan and forecast for:
# KPIs bought
$ cost per
incremental contribution $ payout on cohort level

*end*


Which one has the higher probability of getting budget AND delivering results?

Let's go with Option 2 in 2024.

Our brands depend on it.
—
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