Sep 3, 2018
Marketing has been redefined in recent years due to digitization, and with the facilitation of user-generated media and influencers, the marketing functions of organizations have had to adapt.
The Chief Marketing Officer (CMO) role is becoming increasingly important to businesses as new platforms and ways to engage or build relationships with consumers emerge and customers expect more from brands.
Whilst this greater reach allows for the untapped potential for marketers, it also means increasing expectations of the consumer with far more competition than ever before.
As such, the CMO is now turning into a pivotal role needed for a business’ growth in order to stay current with the market and as it evolves in the digital era, it begs the question, what does the future hold for this position and why is it constantly changing?
As company-wide marketing evolved out of individual departments, the CMO role was born with a focus on advertising, market research and brand management.
In recent years, the most noticeable change in the marketing function as a whole is the switch from ‘selling’ to relationships. Where CMOs used to be creating campaigns that made people want what was being sold, now it’s about the consumer and adapting to what they want. It was also less varied with fewer marketing platforms to use, had limited sources of data to collect from and had a strong emphasis on advertising.
In the global economic crash of 2008, the CMO role was perceived as surplus to requirement for some businesses. But now organizations are realizing just how crucial this position is for a variety of functions and its strategic input, particularly as consumer behavior changes and marketing becomes more about revenue and lead generation.
In the C-suite, CMOs are bringing a lot more to the table than just marketing, as are now responsible for facilitating customer experience alongside financial and strategic tasks.
As a result, the role is becoming a pivotal focus in the business by aligning its goals with consumers and taking more of an outward facing approach connecting the business with its customers. This requires CMOs - current and aspirational - to diversify and meet the expectations on a company-wide scale in growth, innovation and analysis.
68% of senior managers now expect CMOs to be growth drivers which comes as no surprise to Proctor & Gamble’s former CMO, Kimberly Whitler. “Now, not only do marketers have to be finance experts, but they have to be technologists and understand the ways in which they can connect with consumers.”
The widening scope of the CMO means finding the balance between meeting customer needs while generating revenue and facilitating growth for the company.
With such a drastic evolution, the definition of the position itself has created a lot of confusion which is partly responsible for the tenure of CMOs being one of the shortest in the C -suite with only 57% of CMOs having been in their position 3 years or less, with the average tenure being 4.1 years. This is almost half the time of the average CEO tenure and less than the average 5.1 years for CFOs.
Now, most CMOs can expect to sit on the executive committee, reporting directly to the CEO, but the lack of clarity on the job role as well as a misunderstanding of what the organization actually needs, has led to many exploring other job titles like Chief Growth Officer or Customer Officer and alternative avenues such as consultancy. These areas have more of a defined focus and allow CMOs to explore their preferred specified areas and meet expectations of the C-suite but in a less fluid job role.
As a result, many businesses report finding the perfect CMO a challenge while retaining them is also difficult because organizations aren’t defining exactly what they need. 80% of CEOs have expressed dissatisfaction towards their CMO, but this could be as a result of a lack of expectations as it's up to the CEO to define the role within the organization specifically and what it means to their business.
For example, a CMO Council survey reported that while 48% of CMOs had a strategic focus and needed time to spend on assessing long-term growth plans, nearly half of them were spending their actual time reviewing financial budgets and dealing with campaigns and content approval leaving little time for their overall remit.
The solution? Companies need to look at their organizational development to meet this changing elements and responsibilities of the role and facilitate the adaptive nature of the market.
After all, if the CMO is required to create responsive growth strategies in a variety of disciplines from finance to sales, organizations need to create processes to handle the response companywide, not just within the marketing function. Avoiding the pigeon-hole effect that is actually hindering CMOs from their full potential.
Having a clear definition of the organizational marketing need and strategy as well as a clear job description is vital for those hiring better suited and long-term CMO candidates.
Bear in mind that not all CMO roles will be the same. The key is to define the role to suit individual organizations and having a clear understanding of how the CMO will interact interdepartmentally will make hiring a lot easier for the C-suite.
Whitler & Morgan discuss 3 types of CMO role to assess the fit within organizations and finds:
Enterprise Wide – Nearly a quarter of CMOs are responsible for designing strategies to deliver profitable business growth through sales, marketing communication, innovation, sales and product design.
Strategy Focus– 31% focus on analytics and insight of the growth strategy with responsibilities in innovation, product design and customer insight.
Commercialization – The majority - 46% focus primarily on sales and marketing communication which includes promotion, events, digital content creation, advertising and social media.
Choosing between these roles can be difficult but should involve your company and C-suite asking how much impact consumer insight has on overall strategy. If this is a critical element that affects product development and customer experience, the CMO role should be heavily strategic and enterprise wide. However, if the innovation of the product or service drives the need for it, marketing is focused on commercialization and sales, which should be heavily highlighted in the CMO role.
CEOs and Senior Executives should also focus on qualities in candidates that allows them to be innovative and agile to ensure they can adapt to changes in organizational strategy and shifts in consumer behavior to match the needs of the market. This can mean that the CMO role starts to take a blend of the three types mentioned above.
It’s not just organizational needs that shape the role, the way consumers make decisions and purchase is vastly more complex now as a result of digitization.
The modern CMO must match the changing trends, technological advancements and latest fads in both attitude and platform to make effective campaigns. Remaining reactive to the market is key for marketing success and this involves analyzing vast quantities of data within the marketing process to be constantly redefining strategy.
Where there were once mass advertising campaigns like direct mail marketing or radio advertising that aimed for broad reach of a single audience, ad targeting allows marketers to hone in on their audience and turn the marketing function into a wealth of knowledge to be used around the business. Data-driven marketing on various platforms makes the CMO role more exciting with different arenas to choose from and the various platforms have different consumer perception and strategies of their own to consider.
On top of this, the rise of the internet and preference for online purchasing and web-based searches have driven businesses to consider new types of relationship marketing. An emphasis is now placed on the perceived ‘value’ by the consumer that CMOs must match without eating into their organization’s bottom line and being labeled as the resource pit like their predecessors. CMOs need to not only consider the short-term campaigns to drive revenue but the long-term perception of the organization on all fronts.
‘Going viral’ for the wrong reasons since digitization can cost a company immensely and allows for a greater fallout that damage overall perception. To rebuild from this is even more costly so CMOs are responsible, now more than ever for maintaining company image.
With the ability for consumers to publicly scrutinize online also comes the conscious consumer who places more of an emphasis on corporate social responsibility and call for ethical and sustainable organizations. Influencers, bloggers and increasing user-generated content act as competition as well as highly influences the reputation of an organization, and the CMO must understand how to navigate this minefield.
Changing consumer attitudes and the requirement for constant reinvention in these digital times show the need for CMOs and this is unlikely to change anytime soon.
As the marketing focus shifts from ‘selling’ to engagement and creating relationships with consumers personalized communication is the key to opening this dialogue. Doing this requires mining large amounts of data from the likes of social media and analyzing it in relation to business strategy. It also requires a workforce that understands the fundamentals of digital and its impact on brand awareness, leads and revenue.
As new technology such as AI swamps marketers with information, the CMO position will become more varied and specific to individual organizations as their expectations require them to apply insight to both strategy and address business challenges.
Companies will be putting the consumer at the center of strategy to focus on customer experience and CMOs will be instrumental in providing a bridge between consumer data and actualizing strategy.
What won’t change is that CMOs will continue to wear many hats, to match the nature and influence of the position.