Ep. 124: Andrew Warner - The Collision Between Marketing and Accounting

Contact Andrew Warner: https://legendarypodcasts.com/andrew-warner/

FULL PODCAST TRANSCRIPT
Mitch: (00:05)
Hey everyone! Welcome back to Count Me In, IMA’s podcast about all things affecting the accounting and finance world. I'm your host Mitch Roshong and this is episode 124 of our series. What happens when marketing, finance and data analytics collide? Well, in today's episode, Andrew Warner CEO at Marketing CFO uses his unique mix of experience in both finance and marketing to help explain how companies can combine these efforts to create a sustainable business. Hear him speak with Adam about bridging accounting and marketing as we head over to their conversation now.

Adam: (00:43)
Now Andrew, I've been really looking forward to speaking with you as, I been wanting to know what is a Marketing CFO and how did you get to this place?

Andrew: (00:53)
Sure. So, Marketing CFO is really something that, is something that I've kind of invented just because of the unique need that I've seen in the market. I think as you know that, there's a lot of data in finance and it's very easy to approach that from an analytical perspective and that's how a lot of accountants and finance people typically will approach most problems. But nowadays in marketing, you're getting to where you can track so much spending and the results and there's so much there that it's almost to the point where it's more of a finance type role than a creative role. And if you can kind of combine those two sides of the world, the marketing side with the finance, there's a lot of potential that gets unlocked for the companies that you work with.

Adam: (01:40)
That really makes sense how marketing and CFO kind of collide. How did you get to this role?

Andrew: (01:46)
Well to be honest, it was a bit of an accident. So I started out in the finance world and I was working in a accounting firm, probably like a lot of your listeners work at, and on the side I had some e-commerce businesses mainly focused on drop shipping products and there's a lot of digital marketing involved and so I actually had tempted to leave the finance world to go into that industry. I had a small exit with an e-commerce store that I owned and started consulting on the digital marketing side, but what kept happening was that a lot of my clients, even though it was supposed to help them with the marketing, I kept getting pulled back into the finance world. They didn't know if their advertising campaigns were profitable. They didn't know what their business goals were and what campaigns fit into those and which ones didn't. They had cashflow constraints and inventory issues. And so I kept fighting it for a while, I was trying to avoid going back into finance, but about three years ago I just accepted it and have been serving in that role as kind of being the bridge between those two worlds.

Adam: (02:52)
That's interesting how I think we all kind of fall into our profession by accident a lot of times. So many times, accountants, marketing is just another line on the income statement, but a lot happens to get it there on to the income statement. As you just mentioned, how you kind of fell into the Marketing CFO, you know, how can a CFO better connect with their company to be more effective in making sure that everything is connected?

Andrew: (03:24)
Yeah, that's a great question. And what's so cool is that 20 or 30 years ago, if you'd asked me that question, it would have been a much different answer and it would've been really tough for a finance person to understand everything that's going on in the marketing world, but nowadays there's so much data and there's so much information available and it's very, it's moving more and more to being quantitative where you still, it's still great to have that creative and qualitative and understanding of the mind of your customer, that's still really important for marketing, but you can also start measuring your metrics. And that's one of the things that I do a little different than most CFOs, is that just like you said, instead of marketing expense being an expense on the income statement, I normally start with the, before getting to the revenue, looking at how many users are you getting, how many new potential buyers, how many leads are you getting, and what's your conversion rate at closing those? And I think that that's really where the story needs to begin and that really hasn't. Traditional finance hasn't had a good system for tracking that and catching it. And so I think that's something that you can't really rely on the double entry accounting built in the 13th century to really help with that. But I think it is something that's essential for a CFO to focus on.

Adam: (04:40)
So that’s not the first time I've heard you mention like the double entry 13th century accounting, when you and I were talking before we started recording, you'd mentioned it a few times, is that still the foundation of what management accountants will face today or is, are things changing?

Andrew: (04:55)
Yeah, I think the cool thing for management accounting is that it really does change a lot and it really, instead of having that standard financial reporting that is, you know, gap or whatever else, when you're on the management side you're really trying to help the business grow and there's so many other pieces there. I think that the principles have stayed the same. You always want to find your constraints. You always want to try to, maximize efficiency, maximize the return on any investment that you're making. I think the big change has been that there's more data to tell you what your return is, what your investment has put forward. And I think that you have to go a little bit beyond the traditional accounting world to be able to do that. And I could probably walk you through some examples, to really show that in a different light, but the, it is really cool, that the 13th century bookkeeping system has really just with a few slight tweaks, has continued to serve our world so well. I'm not against that system by any means, but I do think you need to add some other pieces on top of that if you want to have a holistic picture of modern business.

Adam: (06:07)
Well, can you give us some of those examples to help illustrate that for the audience?

Andrew: (06:12)
Yeah, sure. So I think that, a few things you can look at, so a lot of times people will focus on the constraint of inventory, right? And so that may be something if you're in a manufacturing company and you're trying to focus on where's the constraint, and it's almost like you might have a constraint first approach to resolving that. You could also do that with the marketing side of your business. A lot of times I see people that they're really great at getting traffic to their website for example, but they do a terrible job at converting those visitors into customers, but they continue to focus on just getting more and more people when the real constraint is that conversion rate. And I think that that's something that's really a key component that a accountant could really understand well and that they can, they have that mindset to where they could really serve a marketer or just serve the business in general to better understand where is that constraint. Maybe even get more specific into specific areas, specific web pages if it's a website, specific customer targets if it's more of like a traditional Salesforce type system and then I'm starting to track that over time and seeing what the trends are and trying to determine what the levers underneath that data you can pull to really help improve that over time. I think all that's some great examples for how you can take the principles from trad...