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Challenges for CMOs

There was a time when the CMO’s life was simple.

You only needed to work out how to split the budget between TV, print, brochures, events and the website – and check whether the MD like the latest TV ad.

Market research and consumer insight was confined to pre-market testing and evaluation of new products and campaigns, and some in markets feedback on customer preferences – eight out of ten customers prefer …. and so on.

Now CMOs are faced with a proliferation of channels, devices and digital platforms.

It’s no longer the case that “half of the money I spend on advertising is wasted, the trouble is I don’t know which half”. The trouble is now “more than half of the data I have now is wasted – there’s too much to make sense of it”.

There is no doubt that the consumer has taken control and is now expecting a conversation rather than a monologue – it is no longer possible to just put out your brand and product messages – consumers have opinions and they expect you to listen and respond to them.

And the pace of change and evolution in marketing has accelerated.

Once, one year plans gave a realistic planning horizon, now activity needs to be reviewed and modified at a minimum every quarter, possibly every month.

Of course, the catalyst and driver of all this change is digital. Digital transformation is influencing not just marketing transformation but business transformation as well.

So what are the challenges we see this creating for the CMOs that we work with closely across our network?

Well, there are basically five of them – and whether it’s in the BRIC’s, the US, the EU, Japan or Africa, all of our offices are seeing a similar pattern

Challenge #1 – Owning the customer experience
Traditionally Companies have had clear silos between marketing, sales and customer service. The consumer through social media channels naturally doesn’t respect or acknowledge those distinctions. To be consumer centric the customer journey needs to be seamless.

Fast, personable customer service is a key element of the digital customer experience, and it’s progressively merging into marketers’ online strategies.

Today’s CMO is expected to do more than blanket customers with brand awareness and messaging. They need to collaborate with other departments to place the customer experience first.

It’s your job to lead the dismantling of silos that separate web, call centres, mobile, and in-store channels to create the consistent, personalised experience that today’s technology-empowered consumers demand – that means having greater responsibility and accountability across the business, not just within marketing.

Challenge #2 – Structure and capabilities of the marketing team
And breaking down those silos doesn’t just apply to the business – it is just as relevant within. Is a channel based marketing structure still relevant for a consumer centric, digitally driven marketing strategy? If not, what effect does that have on the structure and capabilities of the marketing team?

From strategy to customer experience to reputation management – success is intricately tied to the ability to create engaging and meaningful experiences across whatever channels and devices make the most sense for your consumer – and with such a broad remit having the right resource and partners is critical.

We’ve seen a shift in positioning and importance in the marketing team. At one time, the Insights team, or as they were previously known – Market Research – CRM and what could loosely be called the digital team and was probably actually the website team, where kept in a quiet corner of the office, away from the bright lights of the product and marketing communications teams.

And the members of the Market Research, CRM and web teams were often quite a difficult bunch. The steady methodical Market Researchers sitting alongside the young, geeky digital and CRM teams speaking incomprehensible acronyms and strange techy language! Not a match made in heaven.

But now Insights, CRM and Digital teams have a much greater relevance and prominence within the overall structure of the marketing teams – driven by the needs of consumer centric marketing.

And increasingly there’s demand for another key talent within the organisation – the marketing technologist – that person who is equally comfortable talking to the marketing teams and interpreting business requirements, as they are talking to and understanding the technical requirements and constraints.

The Society of Digital Agencies 2014 Report identified significant gaps on the Client side for all digital practices.

And with digital and consumer centricity playing a much more prominent role across the whole marketing and communications mix finding the talent to manage this is really difficult.

Particularly to find those leaders in the marketing teams, who have deep vertical knowledge in digital blended with broad business acumen – capable of seeing the bigger picture – and having both creative and analytics skills – or, at least the ability to manage and integrate those with these skills.

So there are multiple issues around the capabilities and structures of the new marketing teams:

  • Breaking down the silos
  • Restructuring and changing the prominence and relevance of key roles
  • Finding and retaining people with the right skills and experience
  • And then once you’ve found this perfect structure and talent – that is not enough. Digital is iterative and constantly evolving and new skills and requirements are emerging all the time – being comfortable and adapting to change is also important.

So that leads on to the next challenge…

Challenge #3 – Agency rosters and relationships
The remit of marketing is now very broad. You can’t do it all on your own. So who should be your partners – who are the right agencies to work with? What’s the right agency roster structure for your business? What skills and activities do you need to keep in house and what should be outsourced?

We are only too aware that both financial pressures and time and resource issues are playing their role in marketing departments and with this we are seeing both in the UK and the US a greater desire for a more integrated Agency offering – the ultimate version possibly being P&G’s BAL system.

The difficulty here is the definition of integration. More and more Agencies are claiming an integrated offering. But line up eight Agency CEO’s and ask them for their definition of integrated and you’ll get ten different answers.

Equally ask CMO’s of what they need from integration and the same thing will happen.

So there’s work to be done here – and that might need outside help to guide you through what’s real and what’s not. But without question, if you get it right there are significant levels of efficiency improvement and cost savings to be made.

Importantly, any structure of a modern marketing agency roster should be flexible, agile and adaptable to the new digital and consumer centric environment. It may well take the form of single integrated lead agency model which will need to be supplemented by key specialists agencies and disciplines.

And one of the key requirements for your agency partners is that they create a learning environment. They should be helping you to train and embed digital and analytical skills across your organisation.

A well structured roster of agency partners is a critical component in delivering your marketing effectiveness.

Challenge # 4 – Data and data based insights – mastering metrics that matter and in real time
The data explosion is one of the most powerful external factors affecting the marketing organisation. And an IBM survey in 2013 revealed that 82% of CMOs felt underprepared to deal with it.

We now create as much information every two days as we did from the dawn of civilization to 2003. Navigating through this information to get a clear picture and meaningful insights is extremely difficult.

According to IBM at least 80 percent of CMOs rely on traditional sources of information such as market research and competitive benchmarking to make strategic decisions. Similarly, more than 60 percent rely on sales trends and campaign analysis.

Only 26 percent are tracking blogs, only 42 percent are tracking third-party reviews and only 48 percent are tracking consumer reviews.

Yet blogs, consumer reviews and third-party reviews disclose what discrete customers want. They provide the rich source of information about customer sentiment, with context, that can help companies more accurately predict demand patterns. Real-time conversations between informed individuals are also a valuable source of new ideas. These new digital data sources provide immediate crucial insights into how customers and influencers think and behave.

And closely related to data is challenge number 5…

Challenge #5 – Technology
The combination of the proliferation of digital channels across multiple platforms and devices with the increased demands of analytics and insights inevitably result in a much greater need for technology.

Companies are seeing a much greater proportion of IT spend on marketing related projects and increasingly competition for capital expenditure includes marketing rather than just the traditional product development and manufacturing department.

Understanding what the priority marketing technology projects are, the appropriate solutions and securing the funding and support of the CIO are all critical.

The level of technical expertise required by CMOs is becoming an increasingly important differentiator.

And again according to IBM where the CMO and CIO work well together, the enterprise is 76% more likely to outperform in terms of revenue and profitability – so it is also critical for the business not just the reputation of the CMO.

All of these challenges may paint a depressing picture, but that is not necessarily the case.

For the CMO all of these factors mean much greater influence in the business. Ownership of the customer journey means a much greater direct responsibility and contribution to revenue growth – marketing ceases to be a cost centre and becomes a profit centre.

Survey’s conducted by IBM indicate that CMOs are wielding much more power in the boardroom, as CEOs increasingly call on them for strategic input. In fact, the CMO now comes second only to the CFO in terms of the influence he or she exerts on the CEO.

As custodian and steward of the consumer within their organisation CMOs need to build bridges across functions.

As I’ve said, digital transformation and data management generate greater demands for technology and integration. This in turn demands close collaboration between the CMO, CIO and CFO as marketing technology requirements begin to be incorporated within the CapEx budget

How to tackle these challenges?

All of this might sound rather daunting but there is a structure and framework to start thinking about this and ensure you are equipped to tackle the challenges.

A key starting point is to go back to your business and marketing objectives – what are you trying to achieve? This will help you develop your priorities. For example in terms of marketing what are you trying to achieve:

  • Brand building
  • Customer experience and engagement
  • Demand generation
  • Product innovation
  • Or a combination of the above?

And then take a realistic audit of where you are in terms of people, processes and tools or technologies to tackle these, and where do you want to get to. Are you ready?

And when you have a clear plan there is the not insubstantial task of getting buy-in and support from your executive boards and colleagues – and more significantly the budget to deliver this.

Bring that all together

It’s clear that the pace of change and evolution in marketing has accelerated, and that digital is the catalyst.

Key challenges you need to focus on are:

  • Dismantling silos across the business and within marketing to create a seamless consumer experience
  • How to structure and resource a marketing team with appropriate skills and capabilities?
  • Ensuring an agency roster and set of partners that will enable you to deliver – and enhance your overall team performance
  • Managing the increasing levels of data complexity and insight available to you
  • And selecting and implementing enabling technologies to deliver your marketing objectives

And there is a framework that can help you pull this together:

  • Ensure all your priorities are aligned with your business and marketing objectives
  • Have a realistic audit of your people, process and tools to deliver and then select which are going to deliver the greatest opportunity
  • Develop a plan to deliver and monitor and measure it on at least a quarterly basis.

And don’t forget, it’s a recognised business ‘law’ that businesses are more accepting of the advice and recommendations from external consultants than they are of internal colleagues developing and delivering the same message.

In that respect, we’d be very happy to bring together our day to day global learnings to help guide you through the maze.

Originally presented as a Keynote Speech by Stuart Pocock of The Observatory International at the CMO of the Year 2013, Mediarun Awards, Warsaw.

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