Recently, AdWeek’s Noreen O’Leary published an article called “CMOs Face a New Reality” about the challenges Chief Marketing Officer’s face in this economic climate. The article referenced a recent study by Accenture and highlighted several key findings that have implications for any CMO regardless of industry or discipline. Namely, the article correctly points out that selling products (or services) to consumers whose buying patterns have been altered or forever changed by the economic downturn is increasingly difficult.
CMOs are often where the buck stops on a growing number of sales, branding and communications issues both at the corporate and audience-facing level. As the survey says of chief marketers, “expectations have never been higher and the challenges have never been greater,” with 80% of marketers surveyed facing flat to declining budgets. This, the article hints, constitutes a CMOs new reality.
However, I would stop short of calling anything a new reality. Of course, CMOs have been up against many challenges before and if you are a chief marketer, then when haven’t expectations been high? When hasn’t there been a tough issue to tackle? A few years ago, the topic was CMO tenure and how it was fast declining. Now, it is steadily increasing. Then, there was a debate about how CMOs were negatively regarded within the C-suite. Now, their position is seen as vital, often (but not always enough) with as strong a voice to Boards as other executives. CMOs are regarded as business people first, marketers second.
So here we are with the next challenge for CMOs to conquer; we are still in the midst of a recession with more consumers saving or paying off debt rather than spending. CMOs were the first to feel the effects as we entered the recession and most weathered the early stages quite well because they have the benefit of seeing trends first. Keep in mind that this is not our nation’s first economic downturn, and it stands to reason it won’t be our last – yet, from great challenges there is always opportunity born.
One of the less startling quotations from the article was: "Marketers must meet today's challenges with laser-focused precision that is guided by insights from robust customer analytics capabilities that inform decisions about who they should target through what channels and with which messages," said Dave Rich, managing director of Accenture Customer Relationship Management and Accenture Analytics. This isn’t a new reality; it is a very old reality. Of course that’s what marketers need to do – constantly re-adjusting and re-calibrating your marketing mix based on your main focus, which is your customers or target audience. This, I hope, is not a new concept for most of us.
Another finding: CMOs cited their three most important business issues as improving customer retention and loyalty, acquiring new customers and increasing sales to current customers. Again, this is what CMOs have always focused on (or should have been). In fact, if you don’t know anything about customer acquisition or retention, then perhaps Marketing isn’t your thing. The point is that while the winds may have changed direction necessitating a tack further right or left than expected, the end goals are still unambiguous for CMOs and marketers and will remain fairly unchanged for the foreseeable future.
I believe the main point the survey is trying to make relative to any “new realities” for CMOs is in this finding:
Less than 20 percent of respondents said they effectively use digital channels like corporate Web sites, online communities, online advertising, and mobile and location-based marketing; traditional advertising such as print, television and radio; and direct mail and telemarketing. Marketers gave themselves the lowest marks in leveraging digital channels.
For those of us who work in any digitally-based marketing industry, we need to understand that our old reality is another’s new reality. Every CMO is faced with budget cuts or other challenges – this has always been the case. What is different with budgets cut now versus 15 years ago? There is an obvious opportunity to ramp digital spending which for the most part is cheaper, easier to track, provides better targeting and ROI. This is second nature to digital CMOs but less apparent to the majority of others - until now.
The challenges facing CMO’s today are fundamentally the same as they have always been. How can we do more with less? How can we build a brand? How creative can we be in reaching or engaging the audience? How do we lead or aid the sales process to bring in new customers or partners and retain the relationships?
What is fundamentally different are the tactics available to answer those very same questions. The choices facing marketers are seemingly limitless in this digital and increasingly “social” age when considering where and how much to spend and how to track results. Like the very audiences most marketers’ target, the new reality CMOs face is increasing fragmentation in their own marketing mix, and underscoring the need for senior marketing executives to have a much wider spectrum of knowledge, skill sets and creativity than at any other time.