Why Marketing and Finance Need to Hang Out

Let’s be real: if you’re throwing money at ads without knowing exactly how much profit you’re making per sale, you’re basically gambling.

Sure, you might see your revenue jump, but what if your costs are jumping even faster? That’s where tracking your contribution profit (i.e., what’s left after product costs, shipping, and ad spend) is a game-changer.

Once you nail that number down, you can compare it to your monthly OPEX (operational expenses) and see how many orders you need just to break even. It’s amazing how a simple spreadsheet can shine a light on whether your ads are fueling real growth—or just running up a tab.

The Percentage-of-Ad-Spend Pitfall

Now, let’s talk about agencies that charge a percentage of your ad spend.

Picture this: November rolls around, and you crank up your budget for Black Friday/Cyber Monday. You’re spending two or three times as much as usual (because hello, holiday rush). Meanwhile, your agency is suddenly raking in a much bigger fee. Are they really delivering twice the value? Or are they just getting paid more because it’s that time of year when sales naturally spike?

For me, that model always felt sketchy. You want your agency to focus on helping you make profitable sales—not just “big” sales. That’s why, at the agency I’m part of, we’ve ditched the percentage model and stick to a flat fee. It keeps everyone’s eyes on what really matters: making sure your ad dollars come back with friends (a.k.a. profit).

Making the Numbers Work

It’s not enough to see “dollars in, dollars out.” You’ve got to zoom in on each step of the process. How much does it cost to produce and ship your product? How much do you spend to get a customer through the door? Once you know that, you can forecast: “If I crank up my ads by X, my efficiency might drop a bit, but I’ll still make enough to cover Y in expenses.” That’s the kind of clarity that takes you from aimless ad spending to strategic scaling.

Bottom Line

At the end of the day, you can’t separate marketing from finance. Even the most eye-catching ads in the world won’t save you if you’re losing money on every sale.

Know your numbers, keep a close watch on how much you spend versus how much you actually profit, and don’t get sucked into paying an agency more just because they cranked up your budget. When you marry a solid financial foundation with smart marketing, that’s when growth gets really exciting.