Marketing is clearly on the cusp of transformation. The changes corporate marketing leaders have experienced of late—mountains of new data, increasingly sophisticated analytics technology, ever more empowered customers—are destined to only accelerate going forward. And enterprise expectations for CMOs and their marketing teams will almost certainly continue to climb.
The one question that remains is what corporate marketing will look like as a result of this revolution. Will the CMO of the next decade be a number-crunching, Nate Silver-esque data analyst? Will the marketing function become so automated and analytics so mature that human input becomes unnecessary? Will the traditional art of marketing be subsumed by the new science of marketing?
In reality, the shift will be more nuanced, said industry leaders, but no less profound. “We’re on the brink of marketing changing rapidly and radically as a result of the new technologies now at the disposal of marketers and their customers,” said David Cooperstein, vice president and CMO practice leader for Forrester Research, in an interview with CMO.com.
Data will be the oil that fuels marketing. By 2017, the CMO will spend more on IT than the CIO, according to Gartner research vice president Laura McLellan. CMOs will “live and breathe” data, added Rich Mooney, partner and North American managing director of Essence Digital, whose corporate clients include Google, eBay and Expedia. “It will form the backbone of all marketing strategies going forward,” he told CMO.com.
That ability to not only measure the real return on marketing but also predict its future performance will raise the profile of CMOs and their teams. But all of the new people, processes, and technologies could lead some marketers astray, pressuring them to make ill-informed decisions on the fly or to lose sight of long-term strategy.
And at the center of it all will be the customer. “Marketing is on the verge of an absolute sea change. The role of the CMO is fundamentally shifting,” said Tim Kopp, CMO of ExactTarget, in an interview with CMO.com. “And it’s all because of the changing consumer.”
The Customer Is (A Hyperconnected) King
Certainly, the customer, in a general sense, has always been at the heart of marketing. But looking ahead, the customer—as an individual—will be the planet around which marketing revolves. “The customer will drive all marketing activities,” said Marla Bace, general manager of marketing and operations for Circles (a divison of Sodexo), in an interview with CMO.com.
In the past, marketing interrupted customers. Then came the age of engagement. Going forward, marketers will have to ingratiate their brands with customers, Bace said. “When that customer engages with you, you will need to know what their preferences are—whether they’ve provided that through the Web or mobile or a contact center—so that you can provide them information how they want it, when they want it, tailored to their unique likes and dislikes, and do it all very quickly.”
“The customer is at the center of everything,” echoed Bill Brand, chief marketing and business development officer of HSN Inc., whose customer base is 87 percent female. “It’s all about her being in control because that is what technology allows her to do.”
Focus groups, surveys, and customer feedback are already giving way to individual customer data and robust analytics. The intuition and experience on which traditional marketers rely will be trumped by data-driven decisions, said Conor McGovern, managing director of customer and marketing analytics for Accenture Interactive, in an interview with CMO.com. “The quantity of information generated by companies is doubling almost every year,” McGovern added. “The opportunities to develop a deep understanding of the customer are greater than ever.”
In addition, detailed customer insight and brand awareness data are paving the way for more intimate one-on-one relationships between brands and consumers, said Marc de Grandpre, senior vice president of marketing for KIND Healthy Snacks.
The Democratization Of Big Data
While the customer may be driving the biggest changes in marketing, emerging technology in enabling marketing’s response. If the 1990s was the era of ERP and the 2000s the age of CRM, we’re now in decade of marketing tech.
The timing is fortuitous for CMOs, who can exploit technology advances in cloud-computing and open-source technologies as they invest in business intelligence, analytics, and other tools. “That breaks down the high cost of these enterprise solutions,” said Scott Schlesinger, CapGemini’s head of North American business information management, in an interview with CMO.com. “Any CMO can have that ability to be competitive in this day and age.”
It used to be that whoever had the biggest budget won, said ExactTarget’s “classically trained marketer” Kopp, a veteran of Procter & Gamble and Coca-Cola. “This is the democratization of marketing. Every marketer, from the biggest enterprises in the world down to small business, can use these tools. And the smaller companies are innovating more quickly than the big brands.”
The lines are also blurring between B2B and B2C marketing. B2C marketers were the ones focused on customer engagement, loyalty, and brand management. B2B marketers, on the other hand, were managing a customer life cycle with a company, focused on the next best action. Increasingly, everyone’s doing all of that. “The best B2B companies in the world are charged with building a responsive, engaged brand, and B2C marketers are doing life cycle marketing,” Kopp said.
“[Soon] all marketers will realize that they’re managing to people no matter what the channel is,” Bace added.
Beyond The Marketing Curtain
Historically, marketing’s biggest challenge was proving its worth. In fact, by most readily apparent measures, marketing misses much more often than it hits. “The average brand shinks at four-tenths of a share point per year. Every 18 to 36 months, companies launch new campaigns, but nine out of 10 fail to achieve sales objectives,” said Kevin Clancy, CEO of Copernicus and author of “Your Gut Is Still Not Smarter than Your Head,” in an interview with CMO.com. “Marketing failure is all around us.”
Marketing was meant to be a key business driver. “But what happened over the past 50 years is that we did not have the data. We only had guesswork,” said Louis Gagnon, chief marketing and product officer of Yodle, in an interview with CMO.com. “The more data we’ve gotten, the more we have begun to realize that there are a lot of things we’re doing that do not contribute to building the brand.”
But the combination of big data—from mobile, video, and social channels—with increasingly sophisticated analytics tools could transform marketing from zero to hero. “Now we can identify the right market, the right customer, the right way to sell to that customer, and at what price point,” Gagnon said.
Another boost? Automation. “Given the volume of data being collected and the speed in which business decisions have to be made in order to deliver the right offer or the right experience, automation is key,” said Jason Ward, director, industry strategy and marketing, at Adobe (CMO.com’s parent company), in an interview with CMO.com. “There’s no way that humans can make those decisions on their own. The traditional methods of segmentation and modeling the next best offer are too slow and don’t scale.”
Predictive analytics could also be a game-changer. “If marketing leaders wholly embrace predictive analytics, it will change [everything],” said Lisa Agona, CMO of Lexis Nexis Risk Solutions, in an interview with CMO.com. “It will transform and elevate the marketing function [because] it will be all about driving the business forward.”
For all of this to happen, CMOs will have to partner with their CFOs to create systems for measuring marketing’s impact and allocating and reallocating marketing investments in real time. Some already are, said Pat Spenner, managing director of the Corporate Executive Board’s (CEB) Marketing Leadership Council, in an interview with CMO.com. “It takes some courage. Some marketing leaders view that as dangerous ground,” he said. “But those that don’t do this will be forced to.”
“It’s high risk, but also high reward,” Kopp added. CMOs who recognize the opportunity will have their hands on the levers of key business metrics—sales, revenues, market share—and become critical partners to every other business function, from HR to technology to finance. “Marketing will be the change agent,” Kopp said.
At Buffets Inc., the largest operator of buffet-style eateries in the U.S., CMO Jason Abelkop said his team is looking for the impact of customer insight not just on marketing, but on research and development and operations. Marketing analytics is used to make decisions from capital investment to menu selection, Abelkop said in an interview with CMO.com.
Indeed, the rest of the business is “looking toward marketing and the CMO and saying, ‘We want to rely on you to tell us [how to] acquire customers, diversify our products, or expand our portfolio,” CapGemini’s Schlesinger said. “Everyone is competing for customers.”
Added Yodle’s Gagnon: “When the business is looking to you to decide where the business is going to go, your function becomes central to the future of the business. The business cannot live without you. It’s not being driven by finance or accounting or technology, but by marketing—which was what marketing was supposed to be all about to start with.”
The New, New CMO
At a recent gathering of CMOs, a top marketing recruiter made a seemingly bold prediction: The CMO of the future needs to be a superhero. But it’s hardly hyperbole. “The more you talk to CEOs, the more you realize that that’s what they want,” Circles’ Bace said.
The successful CMO will not only be chief marketing officer, but chief customer officer, head of strategy, and change agent in chief, according to Kopp. CapGemini’s Schlesinger agreed: “The ability to leverage customer data in new ways elevates the CMO into almost a quasi-chief strategy officer.”
HSN's Brand, whose marketing team just went through a major strategic reorganization during which he acquired the title of chief marketing and business development officer, said the expansion of the role is reflective of the importance of marketing. “We can no longer be this group off to the side,” he said.
CMOs will have to rise to the occasion. “The CMO should become much more of a business voice at the table,” Bace said. “They need to be in lockstep with the brand objectives of the CEO. They need to measure what they’re doing with the CFO. And they need to truly impact the customer to drive top-line growth and manage middle-of-the-page costs.”
And, by the way, CMOs need to master technology. “You’re going to have a very different skill set a few years from now, focusing much more on the science of marketing and less on the art,” Lexis Nexis’ Agona said.
That may be the biggest struggle for the typical marketing leader. “When you think of a CMO, they’re usually very intelligent, energetic, creative and innovative,” CapGemini’s Schlesinger said. “But they’re not usually very deep in their technology prowess.”
Adobe’s Ward agreed. “Marketers need to embrace rocket science and not be afraid of it,” he said. “They need to hire people who understand data and advanced analytics, and senior marketers need to learn their concepts and language.”
They’ll need not only to understand technology, but the change management required for sustainable technology-enabled transformation. “The ability to implement process changes and calculate careful organizational impacts will differentiate those CMOs that say they want to change from those that know how to make change happen,” Forrester’s Cooperstein said. “As any IT or functional exec who has been through change management would tell marketers, technology does not solve for bad process, it just makes the problem more obvious.”
CMOs will need to acquire those skills—and quickly. Just as CMOs have been hiring more hybrid marketing staff—with a mix of marketing and technology skills—CEOs will be seeking out marketing executives with technology chops. “They’ll still very much be marketers,” Schlesinger said, “but with a firm understanding of people, process, and technology.”
“Tomorrow’s successful marketing leaders will drive corporate growth and exceed the results of their peers by ensuring they are grounded in anecdotal methods of marketing supported by forward-thinking technology,” said Brendan Sullivan, CMO of FieldAware, in an interview with CMO.com. “CMOs moving forward will be required to be quantitatively minded and deploy smart analytics to gather intelligence to power decisions.”
The new CMO must be a master of all trades. “Marketing departments will not be taken over by pure mathematicians,” Accenture’s McGovern said. “Despite the growing prevalence of a more analytical approach to marketing, the creative skills and passion for the customer remain as critical as ever. Art and science have always co-existed in the marketing department, but the relationship between the two will be closer than ever.”
CMOs who can navigate the new roles will become the “key right-hand partner of the CEO, leading change management and the strategy of the board,” said Kopp, adding that future CEOs may increasingly come from the ranks of marketing executives.
The Risks And Rewards Of Real-Time Marketing
Soon, marketing success will be determined by “how quickly CMOs can learn what is working and what is not,” Essence’s Mooney said. “The immediacy of results will be important, and marketers will need to take a more agile approach based on the results they’re seeing.”
Real-time marketing will be the rule rather than the exception. The business will require it. But more importantly, customers will demand it. “They want to be fully immersed in a brand and have a voice within the company,” KIND Snacks' de Grandpre said. “This shift requires marketers to be adaptable, fast on their feet, and instinctual as data can pose a threat of interrupting the art of marketing and the ability to resonate with your consumer bas e.”
At HSN, Brand hires only real-time marketers. When the gemstone ring highlighted as today’s special at midnight on a Sunday sells faster than expected—or slower—the team quickly makes changes to all assets across all channels.
“The key is being nimble, being flexible, and—most importantly—being collaborative,” Brand said. “It takes a team of people in many different disciplines to executive flawlessly. And if you want to do that in real time, you need a team and culture that embraces that constant change.”
Navigating the new world of always-on marketing will be tricky. “[Everyone] will want to know as soon as possible if this activity is driving bottom-line revenue,” Mooney said. “The immediacy of results could also lead to the wrong decisions being made. That’s why we’re seeing more and more now a drive for organizations to really understand the data and make the right decisions.”
Marketing leaders will need to understand which data points should just be tracked versus acted on. “Education about what levers to focus on will be key,” Mooney said.
The velocity of data coming at marketing will also be a struggle, according to CapGemini’s Schlesinger. “It’s coming at them so quickly,” he said. “The only reason anyone tries to ge t their arms around big data is to gain that actionable intelligence. But that’s the rub—there can be such confusion or lack of understanding or lack of time to figure out what to do with it.”
An increased focus on optimizing marketing could distract CMOs from the bigger picture, as well. “Being too focused on the here and now—that need to turn on a dime will not necessarily be a benefit,” Mooney said. Long-term planning and strategy could take a backseat in the agile marketing world. And that would be a mistake. “Consumers won’t act in months or quarters, and CMOs shouldn’t either. It will still be critically important to look out and plan,” he said.
Those risks can be managed. For forward-looking CMOs, the real danger is not embracing these shifts. “What are the biggest risks? The biggest risk is that we don’t grow our customer file fast enough,” HSN’s Brand said. “We’re coming off of two years of record growth, and we need to be constantly innovating. If you’re not doing something new, you will get lost in the clutter.”
“The greatest limit will not be technology, but how fast people can keep up with the pace of change. Think of how fast the consumer is changing today,” ExactTarget's Kopp added. “If you’re not able to keep up, you’re falling behind.”