Aaron Jacobstein is the CEO and founder of Titicus Agency, formerly known as AMJ Solutions. He has spent the past five years as an owner/operator in the digital marketing space. Prior to transitioning to the agency world, Aaron spent 15 years as a finance professional. He has held financial leadership roles in the real estate and insurance industries. Aaron has a BA from the University of Maryland and MBA with a concentration in finance from Quinnipiac University. He live in Ridgefield, CT with his wife and two children.
When asked “Why does it make sense to combine marketing with finance?”the answer begins with my experience as a finance professional. In previous roles as CFO, I often asked how certain marketing expenditures were justified. The vagueness behind the answers was always unsettling: it will lift our brand awareness (with no defined measurement), we need more leads (but at what cost per lead), our materials need updating (what was wrong with the old material and how will the new material be an improvement).
It always seemed to me that the people inside the marketing department should be asking these questions of themselves and their work, instead of the finance department. Unfortunately, in most firms, especially small to medium sized firms, marketing departments are filled with talented marketers but no analysts. This leads to tremendous focus on the creative of a given campaign before its launch without enough attention given to the campaign’s performance or optimization.
An average SMB with between $5MM and $25MM of annualized revenue often faces challenges to scale. Businesses in this range need to focus on operational staff and improvements to grow revenues. During this growth, they often find themselves weak in both finance and marketing positions. Often, a bookkeeper that has been with the company for a long time has been granted the title of Controller. When revenues were a few million a year, this wasn’t a problem, but as the company grows, their accounting and finance needs grow more sophisticated, and this “Controller” is in over his/her head, to no fault of their own.
Perhaps a marketing generalist has been hired during the same growth stage, but it can only be a generalist. In today’s modern digital marketing environment you need a person who can manage the technology of email, websites, marketing automation, paid advertising and social media. Then the content needs to be created that demonstrates your business as an expert in the industry. On top of that, the leads that are generated need to find their way to sales, and the sales team needs further support.
With these critical employees stretched thin and without the right experience, who is asking the important questions about not only driving revenue, but driving the right kind of revenue. More revenue is great, but SMBs don’t just need revenue growth, they need growth in profits.
When I ask prospects about their unit economics, they usually have a vague picture. They’ll normally have some idea of the cost of goods and gross profit margin, but that’s where their knowledge ends. There are other questions that need answering: What is the lifetime value of a client? What is your client acquisition cost? How does your revenue breakdown between COGS, operations, G&A, marketing and sales? To truly scale your company, investments in marketing need to be made with full clarity on the expected costs and expected return.
Using data effectively is critical in improving performance, in both marketing and finance. But data needs to be structured in a manner to facilitate its use. When viewing both the financial and marketing data through one prism, as opposed to two, there are steps that can be made to ensure that data can be used to optimize performance and can be done so in a timely manner.
The technology leveraged in accounting, finance and marketing continues to become more intertwined. Regardless of the marketing and sales technology you’re using (SalesForce, HubSpot, SharpSpring), integrations between systems are becoming increasingly common. The ability to effectively integrate systems across functions (finance, marketing, sales, HR, operations) increases the likelihood of maximizing the value of the technology you use and can eliminate a tremendous amount of human capital that manual tasks require.
The reports received from an average digital marketing agency provide little insight into actual performance and even less context. Awareness campaigns are reported to have “x” number of impressions and lead gen campaigns are reported to have “y” number of submissions. But beyond that, hardly anything is communicated as to the effectiveness of marketing efforts and how they convert to actual results and revenue. Having an entity with finance understanding developing and maintaining consistent marketing reports enables business owners to make data-driven strategic investments with confidence of the returns.