7 Things You Should Know About CMOs
Just last week, Ad Age reported that Best Buy will reconfigure its Marketing team, parting ways with three of its top marketing executives, all hired within the past three years, folding the department into Merchandising. It’s not uncommon. Take Coca-Cola’s announcement that their CMO would leave last month as a result of consolidating Marketing, Customer and Commercial Leadership Strategy into one function – led by a Chief Growth Officer.
Spencer Stuart most recently found the median tenure among CMOs is 42 months – representing a two-year decline of six months, or 13%, over the past two years. And while there’s more tools, niche partners and resources than ever to demonstrate data and results, the stakes are infinitely higher for CMOs to impact real business outcomes. In fact, 93% of CMOs say that they are under more pressure to deliver measurable ROI today. For a role that has long had to rely on investing in patience, with outcomes that weren’t always immediate, the opportunity of time is no longer present. CMOs must demonstrate results not just faster, but more holistically when it comes to their impact on the overall business – ushering a call to agencies to support their clients with execution backed by strategy to help keep their seat at the executive table.
We’ve compiled 7 things agencies should know about today’s CMO:
1. Today, everything is branding – transforming the traditional CMO role.
“89% of companies now expect to compete mostly on customer experience, versus 36% five years ago. For marketers, these trends are upending their old adage from ‘Branding is everything’ to ‘Everything is branding.’…What does that mean for today’s CMOs? Their role is completely transforming and their influence expanding so it touches every detail along the customer journey. That simple flip of words may seem like just a nuance, but it has huge implications for the modern CMO.” –Everything is Branding: The Expanding Influence of the CMO, Digiday
The one-and-done shiny projects of the digital age won’t cut it in today’s marketing landscape where the customer journey is hyper connected. Where branding was once everything, marketers and their agency partners could solely focus on it, “but as digital technology has empowered customers with a stronger, louder voice, we’ve been forced to recognize that they co-create brands based on every interaction they have. That makes everything branding – every experience, every interaction, every touchpoint” as Digiday goes on to explain. Where everything is branding today, marketing is too – upping the ante for CMOs to support each interaction, deliver across business units and measure every outcome.
2. Short-term KPIs can pose a threat to CMOs responsible for impacting business outcomes.
“This also has CMOs feeling more and more pressure to produce instantaneous business results and a measurable ROI, which has led to an increased focus on short-term KPIs—and myopia. As the renowned marketing consultant Peter Field has put it, ‘The single greatest threat facing marketing at the moment is short-termism: the dominant focus on this period’s or quarter’s sales.'” –The Downside of Digital’s Explosive Growth? Too Many Marketers Are Failing to Think Long-Term, Adweek
According to The Fournaise Marketing Group, more than 69% of B2C CEOs believe marketers live too much in a creative and social media bubble and focus too much on parameters such as like and views – the type of parameters you can’t prove generate more customer demand or increase revenue. This means the agency-client conversation must be more strategically-driven from the get-go, and focus on creating consistent and correlated efforts throughout execution, as opposed to what project may seem the most important right now. While it’s easy to get caught up in short-term KPIs in the pursuit of “adding value,” the C-suite doesn’t respond to the flashy data that may have cut it a decade ago – they’re looking for results that truly move the needle for their businesses.
3. When growth targets aren’t met today, CMOs are often first in the firing line.
“Yes, CEOs see CMOs as the primary drivers of disruptive growth, but they are closely followed by chief strategy officers and chief sales officers. Yet it’s marketers who carry the buck if growth stalls: more than a third of CEOs say that CMOs are first in the firing line if growth targets are not met. And if you ask marketers, it seems their confidence in meeting growth targets is often depressingly low. According to Accenture, more than half of CMOs feel that a large portion of their marketing budget is being wasted and not delivering the results the business expects.” –CMOs: An Endangered Species, The Campaign
While a scary and unfortunate reality, agency partners must also proactively work with clients to carve out a space for themselves across the C-suite, even if and when their CMO leaves. When an agency consistently demonstrates its value and ladders its impact up to strategic outcomes, it may be able to outlive a CMO departure. It’s one of the benefits of strategic marketing and business attribution platforms like Rova – software and reporting capabilities lend agencies the opportunity to demonstrate their ongoing value. It’s documented proof of how and what you’re delivering on. This also makes the knowledge transfer throughout personnel changes and turnover more seamless.
4. Modern CMOs must be rooted in strategic thinking – focused on driving alignment business-wide.
“CMOs who are more strategic—in the best sense of the word—are better prepared. What I mean by ‘strategic’ is good at facilitating decision making, building consensus and alignment throughout the organization, and leading consistent implementation; these CMOs are better prepared to cope with change. They think strategically, resolve strategic problems, and most important, are able to drive alignment and follow-through across the entire enterprise. This isn’t an easy job because they have to lead decision making around what the firm will/won’t do, and will/won’t invest in.” –Thomas Ordahl, CSO, Landor
It all comes down to bottom line impact and continuing to generate increased revenue for the business. Strategy can mean a lot of things, but success for the C-suite ultimately means this. Agency partners must stay rooted in this throughout their conversations with clients. Today, if you’re not helping deliver on these outcomes, how are you providing ongoing value? If “in the weeds”-type data isn’t critical to how a CEO defines success, as an agency partner it’ll be impossible to work your way up the ladder with clients if you’re not demonstrating value across the C-suite. Agencies can also bring their clients back there if they ever detour or get focused on the latest and greatest – just keep the agency-client relationship focused on achieving success as you’ve defined it.
5. Today, many modern CMOs are CEOs-in-waiting – upping the ante on demonstrating results.
“But for marketers, the question is surely whether the emerging CGO function represents a new opportunity to step up in the boardroom (and assume a CEO-in-waiting position), or whether it will come at the expense of marketing’s C-suite access and credibility.” –CMOs: An Endangered Species, The Campaign
Korn Ferry found 53% of business executives believe their current CMO could one day become CEO. This isn’t surprising considering how expectations and capability sets are changing, upping the ante on demonstrating ROI and effecting business outcomes organization-wide. One can easily see how this translates to a succession plan. But in order to pull this off, CMOs must shift their thinking when it comes to data as many fail when it comes to leveraging it – not understanding what’s important between marketing and business KPIs, and how to use it, and largely to blame is a marketplace that has failed to keep up.
6. As a result, agency partners are increasingly responsible for delivering on business KPIs, too.
“Marketing and sales leaders are trying to work together, but still struggling to operate in lockstep. Marketing automation and CRM tools begin to connect the dots. They fail, however, to capture the interplay between marketing’s impact on awareness, trust, and confidence across paid, owned, earned, and shared channels, and sales’ ability to sell, sell more, and sell at scale…They begin measuring things like followers and clicks, demographics, and reach, then graduate to share of voice, engagement, conversions, and the like. The problem is that these are marketing KPIs, not business KPIs. To accurately assess the ROI of the marketing function, leaders must measure the same indicators that their C-level peers bring to the table: profit margins, account profitability, deal value, sales velocity, acquisition cost, customer lifetime value, etc.” –5 Reasons CMOs Are Failing at ROI, MarTech Advisor
Data provides integrity behind decision making, but it doesn’t guarantee desired outcomes. Without context, data is useless, misinformed and can even be dangerous in reaching success. And while there’s plenty of tools out there to demonstrate ROI using data, there’s very few that ladder it up. It’s another reason Rova empowers agencies with a strategic marketing and business attribution platform, while filling a void in the marketplace. Where CRMs focus on prospecting and driving ‘net’ new business, project management tools ensure the successful completion of projects – and attribution platforms begin to connect the dots, but focus on efforts and KPIs in silos, without understanding why or connecting up to overall business outcomes that matter today.
7. Most marketing tech fails to deliver on the needs of modern CMOs – but agencies can help.
“A lot of CMOs are being pushed into the technology space in a way that they are not comfortable with…a lot of them don’t know how to set up their organization to actually be able to manage it…CMOs tended to be somewhat powerless in generating revenue so what you are seeing is CMOs investing in marketing technology to drive control and management of these levers so they can deliver revenue [and] keep their jobs.” –Grand Conn, US Marketing Chief, Microsoft
As an agency, what kind of data are you providing clients? 50% of B2B marketing executives find it difficult to attribute marketing activity directly to revenue results as a means to justify budgets. While big data has ushered limitless possibilities for agencies to provide clients with data and analytics, consider what truly matters. If necessary, partner with your clients to help reeducate them on laddering data up to the type of measurements that matter as it relates to business outcomes – in addition to the short-term or marketing KPIs you also need to see if a project is working or not. The opportunity is there – start doing your part.
Next Steps & Recommended Reading:
Get your copy now of our how-to guide for building more strategic relationships with your agency’s clients – ultimately, creating you more opportunity through consistently demonstrating business impact. The Agency’s Guide to Earning a Seat with the C-Suite includes our 5 recommended question sets to kick off every client engagement – written with today’s CMO in mind. Our goal at Rova is to demystify organic growth helping agencies realize that business strategy is something you’re likely already doing, but with the right framework can be harnessed for additional growth. You can also check out Rova University’s Strategy Lab for a recommended turnkey strategic planning process.