A few weeks ago, I had coffee with an old professor of mine working as a fractional CFO across a handful of B2B companies. Twenty minutes in, the catch-up turned into something closer to a diagnosis.
It took me back to a discussion with senior executives in my MBA financial strategy class, and to how those tools rarely ever reached a marketing conversation.
Prof wasn't exactly diplomatic.
CFOs, he said, are done with activity metrics dressed up as commercial insight. What they want is reporting that ties back to margin, Customer Acquisition Cost (CAC), payback period, Customer Lifetime Value (CLV) and revenue that can actually be forecasted, not impressions or Marketing Qualified Leads (MQLs) nobody has stress tested.
CMOs, meanwhile, are being asked to become commercial growth leaders while still defending the budget, like a cost centre with line items ready to cut. Underneath both pressures sits a third: CEOs want transformation, CFOs want return on capital discipline, and neither will fund anything that can't show measurable business impact.
There's a question every Board asks, whether it says so explicitly or not, each time a strategic investment lands on the table: will this create value beyond the cost of the capital committed to it?
The CFO understands that instinctively. So does every private equity partner and corporate development team that has ever built a valuation model. I'm not convinced enough CMOs do, however.
Today's CMO is one of the most commercially accountable executives in the business. Yet the case we build to earn that seat is still argued in marketing language: pipeline, brand awareness, MQLs. Every one of those metrics’ matters. None of them help investors value a company.
That distinction further elevated how I think about the role marketing plays on the executive team.
The modern CMO isn't simply responsible for creating demand. They're responsible for allocating shareholder capital and building plans that provide a competitive return. Once you accept that, financial principles and terminology like Weighted Average Cost of Capital (WACC) and Discounted Cash Flow (DCF) stop being ‘finance language’, and becomes 'growth language'.
These become tools that Marketing should be using to make its own value visible.
Marketing Is a Revenue and Capital Allocation Function
Every executive at the table is competing for the same finite resource, and marketing is no different. Every budget we're given is capital entrusted on the expectation it creates shareholder value. That contest is intensifying.
Gartner's 2026 CMO Spend Survey puts the average marketing budget at 7.8% of company revenue, 18% lower than four years ago (Gartner, 2026a). Separately, its February 2026 survey of more than 300 CFOs found Sales and Information Technology (IT) set for the largest budget increases, with marketing close behind, capital moving toward the functions that can show the clearest return (Gartner, 2026b). That's an opportunity, provided we can make the same case.
Average marketing budget as a share of company revenue
Lower than four years ago
Source: Gartner 2026 CMO Spend Survey
That's why WACC matters. Not because marketers need to become analysts, but because it's the minimum return the business expects from any capital deployed, the hurdle every investment must clear. Once you see marketing spend that way, the question stops being "did this perform?" and becomes "did this create more value than the next best use of the same capital?"
That's the discipline missing from most marketing budgets. Not more metrics, but a shared standard for what counts as proof, one Finance would recognise as its own.
WACC, Internal Rate of Return (IRR), DCF and Return on Invested Capital (ROIC), the tools Finance already uses to test whether capital is earning its keep, are what make that standard defensible rather than decorative, alongside how the business costs its own spend.
Together, they're what I think of as the investment case: the argument every other function already knows how to build, and the one marketing is only now learning to make. That hurdle already operates in practice even where nobody names it.
Gartner's 2026 survey found 62% of CMOs expect budget cuts if the function fails to meet its 2026 growth expectations (Gartner, 2026a). Boards are already applying a return threshold and pulling capital when marketing doesn't clear it.
of CMOs expect budget cuts if marketing fails to meet its 2026 growth expectations
Source: Gartner 2026 CMO Spend Survey
That's where IRR earns its place: if WACC is the hurdle, IRR is the height of the jump, the return a specific investment is expected to generate. Every marketing programme implicitly promises one. Most CMOs have simply never been asked to make that promise explicit.
Price Your Marketing Budget as an Investment Rather Than a Spend Line
Here's where most Marketing-Finance conversations go wrong.
We present one number, the annual budget, and Finance sees a cost line and asks what it produces. Every serious capital decision gets modelled as two cash flow streams: the cost of building it, and the revenue it's expected to generate over its life. Marketing rarely gets modelled that way, and the omission is costly. When a CMO presents a budget as a cost line, the only lever Finance can pull is its size.
Picture a mid-market cloud infrastructure business weighing a two-year, $3 million brand and category-positioning investment. As a single spend line, the case is thin: three million spent, and fingers crossed.
As two cash flow streams, it looks different. The cost stream is $3 million, front-loaded in year one. The revenue stream is where the work happens:
- A five-point lift in competitive win rate
- Four additional months of retention as brand preference reduces churn
- A six-week reduction in sales cycles as category authority lowers the diligence buyers feel they need.
Those effects do not stop the day the campaign ends. Modelled conservatively, they generate an estimated $1 million in incremental revenue in year two, rising to $1.1 million in year three and settling near $1.2 million a year as the effects compound through years four and five.
Discounted at an 11% WACC, that is a positive net present value of roughly $460,000 and an IRR near 18%, comfortably above the hurdle, a case that reads like the acquisition sitting next to it on the CFO's desk.
The investment case
A $3 million brand investment, modelled as two cash flow streams
Orange: investment cost. Blue: incremental revenue. Illustrative example from this article.
Build the real model with Finance, rather than around it, and the same logic runs against your own numbers.
A DCF model estimates what a company is worth now, based on the cash flows it's expected to generate later, discounted at the company's WACC. The mechanics belong to Finance.
The assumptions belong to the business, and everyone a CMO touches, pricing power, retention, acquisition cost, moves the size and predictability of the cash flows that model is valuing. Marketing doesn't just contribute to growth. Marketing contributes to valuation.
The Metrics Change with the Business Maturity
None of this works as a single formula applied everywhere. A Private Equity (PE)-backed cybersecurity business three years from exit runs a different playbook than a global matrixed multi-cloud or cybersecurity incumbent reporting to a public board.
The PE-backed business usually carries more leverage, so its WACC runs higher, its payback windows are shorter, and its CFO is watching EBITDA multiple expansion and exit readiness as much as this year's P&L.
The matrixed enterprise typically has a lower cost of capital and a longer horizon, but marketing is one of a dozen business units competing for the same pool of capital, and ROIC gets benchmarked across all of them. The hurdle rate, the time horizon, even what counts as proof, all shift depending on which of these worlds you're in.
That's why getting closer to the CFO matters more than getting the model right. Don't assume the hurdle rate. Ask what their WACC is, what payback period the Board expects, and what they're personally accountable for at the next review.
That conversation does more for the relationship than any dashboard, because it shows your effort to understand their world well enough to ask the right question rather than present the right-sounding answer.
How You Position Your Marketing Cost Changes What Finance Believes
There's a quieter issue underneath all of this, which is how the business allocates marketing cost. Most organisations still use absorption costing, where spend is pooled and spread as overhead, which is why so many CFOs genuinely can't tell which activities create value and which burn cash.
A compounding brand campaign and a sponsorship generating nothing look identical on the P&L. Activity based costing fixes this by attributing cost to the activity that incurred it, because you can't calculate a credible CAC by channel if the underlying data is pooled and averaged.
If you want the Board to trust a case built on IRR and ROIC, the return on capital the business has already committed, that costing must survive scrutiny first, a conversation worth having with Finance before the next budget cycle, not during it.
An Executive Perspective
I recently worked with an executive team at a multinational Managed IT company. The early conversations circled the familiar priorities of pipeline, conversion and Annual Recurring Revenue (ARR). Those were the right discussions, but not the only ones that mattered.
The executive team reframed the question, from "how can marketing generate more pipeline" to "how can marketing increase the long-term value of the business," and partnered with Finance, Product and Sales to model growth scenarios as investment cases, each carrying an implied IRR.
One scenario assumed retention improved from 88% to 94%, CAC fell 15% as brand preference strengthened, and strategic alliances shortened enterprise sales cycles. None of those assumptions was individually remarkable. Together, they changed the predictability of future cash flows enough that estimated enterprise value increased materially once Finance ran them through their DCF model.
Customer retention in the modelled scenario
Customer Acquisition Cost as brand preference strengthened
Scenario modelled with a multinational Managed IT company’s executive team
What stayed with me wasn't the model. It was the realisation that marketing had directly shaped the assumptions driving that valuation. We hadn't just generated brand authority, demand, and revenue contribution. We'd improved the economics of the business.
The Future CMO Will Think Like a Capital Allocator
The most effective CMOs won't only ask how to generate more opportunities. They'll ask how to grow CLV, lower CAC without eroding the brand equity that makes it low and build a market position investors read as durable rather than merely convenient for now.
Those are strategic questions that move revenue growth, margin and enterprise value at once, and most CMOs are already equipped to carry that weight. They just haven't been asked to name it.
Leading with financial fluency, before the strategy conversation rather than defending it after, changes how quickly commercial and financial leaders commit capital together.
It's less about winning the CFO's argument and more about building it with them: understanding what they're accountable for, what good looks like on their scorecard, and where marketing's assumptions feed into the numbers they take to the Board. That closes the distance between the two functions faster than any dashboard.
Built Into How We Work at Proximity
This isn't theoretical for us. At Proximity B2B Marketing, this discipline sits underneath every engagement, not an argument we make once and then drop back into activity metrics.
Before we recommend a positioning shift, a demand programme or a category play, we ask the question this piece has been building toward: what cash flow effect this underwriting is, and does it clear the client's cost of capital, whatever that happens to be for their business.
We built a single metric on top of these frameworks to hold ourselves to that standard: Return on Marketing Invested Capital (ROMIC), our measure of what marketing returns on the capital it's given. It's the number that treats marketing as a revenue and capital function rather than a cost centre, and it's what turns brand work into a figure a CFO will defend at the next board meeting, rather than a line item they tolerate until the next downturn.
For clients in cybersecurity, cloud and infrastructure, where budgets face the most scrutiny, that discipline is often the difference between marketing investment that survives a hard quarter and marketing investment that gets cut first.
It's why we build the case alongside the campaign, not after it, and why the CMOs we work with tend to walk into their own budget conversations with a case Finance already recognises as one of theirs.
TL;DR
For decades, marketing sought recognition as a strategic function. That recognition has arrived, and it comes with an obligation: financial fluency. Not because CMOs should become financiers, but because understanding how a business creates value changes how marketing creates it.
WACC tells us the cost of the capital we're entrusted with. IRR tells us whether an investment clears that cost. DCF reminds us investors value the future, not the past. ROIC tells the Board how efficiently that capital is already working. Activity based costing is what makes those numbers honest enough to trust. Together, they're the argument every other function already knows how to build, and the one marketing is only now learning to make.
None of it starts in the boardroom. It starts earlier, with one shared model, built alongside your CFO rather than presented to them.
Where marketing, brand and revenue performance may be disconnected in your own organisation is usually visible before Finance ever sees it in the numbers. If this raised a question worth working through, I'm always up for a conversation over a coffee, or a virtual one.
Jonathan Booysen is the Founder and Managing Director of ProximityB2B Marketing, a B2B technology marketing consultancy helping founders, marketing leaders, and executive teams connect brand, demand, and revenue to commercial outcomes.
Frequently asked questions
Why are B2B marketing budgets under pressure in 2026?
Gartner's 2026 CMO Spend Survey puts the average marketing budget at 7.8% of company revenue, 18% lower than four years ago, and 62% of CMOs expect cuts if marketing misses its 2026 growth expectations. Capital is moving toward the functions that can show the clearest return.
What is WACC and why should a CMO care about it?
Weighted Average Cost of Capital is the minimum return a business expects from any capital it deploys. Once marketing spend is treated as capital, every programme has to clear that hurdle, the same standard Finance applies to every other investment.
How do you build an investment case for a marketing budget?
Model it as two cash flow streams: the cost of the programme and the incremental revenue it generates over its life. Discount both at the company's WACC to get a net present value and an IRR that Finance recognises as its own.
Does the approach change for a PE-backed business versus a large enterprise?
Yes. PE-backed businesses usually carry a higher WACC and shorter payback windows, while matrixed enterprises have a lower cost of capital, a longer horizon and ROIC benchmarked across business units. Ask your CFO for the hurdle rate rather than assuming it.
Why does activity based costing matter for marketing?
It attributes cost to the activity that incurred it, so a compounding brand campaign and a sponsorship generating nothing no longer look identical on the P&L, and CAC can be calculated credibly by channel.
