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31 October 2023 / Opinion

Effectiveness in Conversation: CFO & MD


In an age defined by constant change, Jaywing's CFO, Chris Hughes, and MD, Catherine Kelly, take part in a revealing Q&A session, shedding light on the relationship between marketing and finance. Together, they explore how this dynamic has transformed against the backdrop of globalization, the pandemic, supply chain disruptions, and mounting concerns over the cost-of-living. They discuss how these two essential facets of the business can work better together through measurement and effectiveness techniques, like econometrics.

Watch their discussion now

And, if you want to go beyond their key takeouts, delve into the detail – the tensions, the evolutions, the solutions – in our write-up below.


Catherine Kelly, Managing Director:

With a PhD in mathematics and over 20 years of marketing and data science experience, Catherine previously applied effectiveness techniques, like econometrics, during her roles at ASDA and Diageo, and now uses her expertise to craft data-driven marketing strategies that empower clients to achieve sustainable results.

Chris Hughes, Chief Financial Officer:

Having previously worked with PwC in the UK and worked for the professional services giant in South Africa, Chris has also held senior finance roles with Lowell prior to joining Jaywing. As CFO, he plays a pivotal role in steering Jaywing towards financial success, working collaboratively across departments to provide strategic guidance, challenging and supporting where needed.


The tensions, the evolutions, the solutions: the full Q&A


1. What do you think causes the biggest tensions between marketing and finance teams in a business?

Chris Hughes:

“Finance people like numbers. They tend to be black and white. Marketers often (but not always) enjoy concepts and tend not to be so naturally number orientated. These two differing worlds often lead to difficulty in communication. This problem needs both sides to step out of their natural comfort zone and understand each other’s point of view but this is often challenging, especially if the marketer lacks any numerical support for the work being done.
Boards, too, are increasingly looking for numerical based support for their decision making. All around us there is an increasing presence of data in all things we do. Boards see this and are raising the bar for decision making and want to have a clearer understanding of the impact their decisions will have, what products and services drive margin, how we can best utilise our resources and where we should make our investments.

When we’re looking at budgets, particularly marketing budgets, I want to be able use data-driven explanations to reassure the board and myself, that what we’re spending is going to give a return on our investment.”

Catherine Kelly:

“I agree that the traditional language and measures used by marketers made communication with the finance team a huge challenge. Trying to explain how metrics such as saliency or unprompted awareness will affect business performance is a thankless task and not one I would relish. It is imperative that marketers employ the means to adapt to the language of the c-suite. Effectiveness tools, like econometrics, can do just that.

Econometric models are a valuable tool which quantifies the impact of marketing investment in terms of business metrics. But it goes further than that. It quantifies all drivers of a business’ performance and can be used to unify the whole board, amplifying the voice of marketing at that table. It becomes a tool for the while board to gather around to understand what has gone before, and review scenarios to facilitate forecasting for the future.”

Chris Hughes:

“Absolutely, I found tool such as econometrics help me bridge that gap, they identify which channels are best, and the returns I’m likely to get - that helps me when I go to our board because I can demonstrate why I want to make this investment and why I want to utilise that spend. It gives them the confidence to then invest in the marketing in the longer- term and not reduce spend at more difficult times.”


2. How does the perception of marketing investment differ amongst these teams?

Catherine Kelly:

“Many CFOs perceive marketing as a cost whereas marketers believe it’s an investment. When times are tough, the CFO often looks to cut marketing spend to save costs, but there is mounting evidence that not only does marketing drive sales in the short term but protects revenue when price rises are necessary and is even a factor in establishing share price.

Interestingly, recent research conducted by Ian Whittaker of 200 city investors and analysts cited brand strength as the most important factor when assessing businesses and their worth, with analysts saying that cutting marketing spend is seen as a red flag. There is growing conversations about moving marketing spend to capex rather than opex so that it’s long-term benefits are reflected.”

Chris Hughes:

“At Jaywing, we’ve certainly moved from where our marketing is just a pure expense to now being viewed as an investment, we see it as an opportunity to grow the business rather than just a cost we occur. Using a tool such as econometrics, our teams can better understand their performance and express their activity in a way that finance can both understand and support. Because of this, the debate on spend focuses much more on how we’re going to use the budget, rather than how much to spend”.


3. How have measurement techniques adapted as the industry has changed?

Catherine Kelly:

“Twenty years ago, marketing campaigns generally pivoted around a TV advert, with some press and maybe radio to amplify. One of the few ways to quantify the impact of this was econometric modelling which would be supplemented by customer research metrics such as awareness, saliency. At the time, these econometric models were expensive - partly due to the immaturity in data gathering and storing, but also due to lack of experience and skill in defining hypothesis. As digital channels emerged, econometricians struggled initially to accommodate this in the models.

Emerging digital channels introduced lots of new metrics that were easy to access and easy to understand such as impressions and clicks – which required no mathematician. We also had google creating a whole new way of allocating value to marketing through rule-based models, such as last click. The challenge was, and is, that in isolation these easy-to-access metrics only give you a narrow view of performance, it is very short-term and often builds an inaccurate picture.

The anecdote to disparate, unconnected data was data-driven attribution models that were built at customer journey level. These models can accurately calculate the contribution of digital channels in a customer journey. If well-built, these offer an unbiased and broader understanding of marketing performance and can be built for different customer segments or categories. That had, and still has, a great role in understanding customer journeys. However, with increasing privacy concerns and the demise of the cookie measurement, we have almost had to loop back to a world where we need to use econometrics again so that we can gain a fuller picture of all business drivers with and, crucially, without cookies.”


Learn more at our upcoming econometrics webinar. 


4. How has Jaywing, and your clients, had to evolve in light of the ongoing industry changes?

Catherine Kelly:

“Clients have had to make some major changes to keep up with the shifting business landscape. The biggest one being that now everyone around the boardroom table expects marketing to be measurable. In the past, marketing was seen as more art than science, but today, it's all about showing tangible results.

At Jaywing, we’ve created a marketing measurement framework which comprises a breadth of capability which measures across varying time horizons. It includes a data-driven attribution model which provides an agile and unbiased measurement of digital marketing; and econometric models which are individually designed and build to understand the nuances of our clients’ businesses. All modelling is complimented with customer analysis as the models can often tell you the what, and customer behaviours indicate the why. It’s all about making marketing investments count.”


5. How have CFOs had to evolve?

Chris Hughes:

“People do not want a score keeper. Telling someone they are not achieving a financial metric and leaving them to devise a solution on their own is unlikely to build an effective team or find the right solution. The CFO has needed to evolve into a true business partner to the organisation. They need to robustly challenge whilst also being the sounding board and contributor to finding a solution. If you stay stuck purely in the financials, you are unlikely to fulfil your role.

When driving the business there are two key parts, first is to understand your business, the market you are in, the opportunities and risks and, from this, formulate a plan for the short to long term. Coupled with this is the role of championing the strategy and driving change. To do this, you must have a reliable set of numbers and understanding of what is happening so that you are both making the right decisions and can withstand challenge when it presents itself. I spend significant time analysing our performance to really understand what is happening and this gives me the conviction to drive strategy forward.

It’s also important to realise that, as a CFO, you are held to a higher standard due to your understanding of the financials and how they drive performance. To meet these standards, CFOs have to invest in measurement techniques. Clearly there is always an element of judgement/uncertainty, but by using tools like econometrics, you are giving yourself the best chance.”


6. What advice would you give to businesses looking to improve the way marketing and finance teams work together through effectiveness and measurement techniques?

Catherine Kelly:

“When advising clients embarking on econometrics for the first time, I would always advise that finance are engaged in defining the hypothesis and jointly owning the input. The models are constructed around hypotheses, determining what is driving the business forward, and the CFO will offer a valuable perspective on this. The finance team should also be included in choosing and assessing the inputs. If the CFO is bought into the hypothesis and inputs, then they are joint owners of the output which is crucial.

Collecting the right data is also critical. Data is the fuel that will underpin the model. Stakeholders should suggest drivers they believe affect demand for their business, and then external factors (such as GDP, weather, national events and competitor activity) and internal data (such as price, promotions, stock levels and marketing activity) can also be gathered. We always test all variables as a potential sales driver. During this process, gaining support from all stakeholders proves important when ensuring we can gather the best quality data.”

Chris Hughes:

“My advice to anyone in the finance team would be to step outside of your role and try to put yourself in the shoes of other people. To be a true business partner to the wider business, you need to understand the marketing department, you need understand what they’re trying to achieve and the challenges they’re coming up against. You need to support them in overcoming those challenges, to ensure not only can the marketing team understand and critically demonstrate the impact of different activities, but that the whole business can. This ultimately has the effect of getting buy in and building credibility with the c-suite.”

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