The Bob Dylan song “The Times They Are A-Changin’” couldn’t be more true today, especially in the world of marketing. Shifts in consumer behavior are redefining marketing, and, as a result, we’ve entered “the decade of the CMO," according to Ashu Garg, general partner at venture capitalist firm Foundation Capital.
“The CMOs that embrace technology and plunge ahead in the world of marketing are the ones that are in the best positions to succeed in this new world,” said Garg, in an exclusive interview with CMO.com.
Garg recently published a paper in which he predicts martech will grow 10 times over the next 10 years to $120 billion. CMO.com spoke to Garg to discuss some of the main points of the report “MarTech And The Decade Of The CMO,” where he investigates the changing role of the CMO, what’s driving the shift, and how the shift is also affecting agency business and models.
CMO.com: Can you give me some context behind the report? Why investigate this topic? What were you trying to prove or disprove?
Garg: The changes in marketing technology that are happening today are happening at a very different pace than even if you look back at two years ago. The industry is at a real inflection point. And that inflection point is being driven by the fundamental shift in consumer behavior and the fact that consumers are living in a digital world.
The shifts in how consumers are behaving are driving this very fundamental shift in marketing, and over the last year or so it has become clear to us that this really is the decade of the CMO.
To give you a very simple example: You know when you’re upset with United Airlines or someone has a bad experience with Best Buy, it has become the norm to tweet. You’ve got a customer support issue, you’ve got a marketing issue–and so the lines between customer support and marketing are blurring.
Those blurring lines are creating a huge new opportunity for CMOs. And one of the things we talk about in the whitepaper is the idea that, in the course of this decade, CMOs have the opportunity to really take center stage within an organization and possibly have responsibility for many other functions that are traditionally considered outside the bounds of marketing.
CMOs have the opportunity to play a much broader role in the organization, taking responsibility for customer success, customer support, potentially parts of sales, and very large parts of technology. And if they do that, they have the opportunity to become what we think of as chief experience officers, and that really is a huge opportunity for CMOs–and, to some extent, also a challenge.
The CMOs that embrace technology and plunge ahead in the world of marketing are the ones that are in the best positions to succeed in this new world.
CMO.com: The report also addresses the changing role of the agency. Can you talk a little bit about that? What do you mean, and why is it changing?
Garg: I think as marketing becomes much more of technology-driven effort, we are starting to see the role and both the business model of agencies being redefined. It’s happening for a couple of reasons. On the brand side, brands are beginning to recognize a strategic value of the data that they put in control and the strategic value of the technology platforms. And so, increasingly, there are segments of brands that are saying, “Hey, I want to maintain control of my data and my technologies.”
Second, the traditional definition of marketing is changing. Content marketing is becoming all of marketing, and one of the things we talk about in the whitepaper is the notion that all brands have to become publishers. So it’s publish or perish. In a world where every brand is a publisher and every publisher is now becoming a brand advertiser, in some ways they’re redefining their businesses. Brands have gone from producing hundreds of pieces of content or hundreds of ads through an agency to producing hundreds of thousands–and, in some cases, millions of pieces of content.
I would argue that, in most cases, the traditional agency model of content creation does not work in an environment where you need to produce hundreds of thousands, if not millions, of pieces of content.
So those are the fundamental shifts: The shift in the role of technology, the shift in the value of the data, and then the shift in the fundamentals of how marketing is seen. What does that mean for agencies? I think it’s both an opportunity and a challenge. I think there are brands that will say, “I want to do everything in-house, and I’m going to take complete control of my data and my technology platforms. I’m going to manage the content creation myself.” And if you are an agency and you happen to work with some of those brands, well, that’s a challenging situation to be in.
That said, I don’t think that’s going to necessarily happen across the board. I think a large number of brands will say, “I need to have control of my data and my technology platform. So I want to be able to pick the technology vendor with whom I choose to do business, and I’m going to directly sign contracts with them. And, at the same time, I’m still going to let my agency do the media buying for me, to do the execution of my content creation strategy.” In those cases there will be a change in the power dynamics: Brands are building a lot more capability around marketing and digital in-house, which were traditionally outsourced.
CMO.com: There is also a portion of the paper that talks about three shifts coming from the CEO and how he/she views marketing. How is that affecting the CMO role?
Garg: I think this is a great question. This is really a starting part, in some ways, for the changing role of the CMO. If you look back in history, in every decade there has been a C-level executive who has really taken center space in the organization and has driven technology spend. In the ’80s and ’90s that was really the CFOs. Companies were going global, companies were setting up operations around the world, they needed to manage them, and CFOs were driving installation of the ERP, resource management systems, and so on.
The 2000s have really been the decade of CIOs. Companies were consolidating, they were in some ways recruiting, there was a lot of focus on cost efficiency, on centralization, and CIOs ruled the roost.
This is the decade of the CMOs. CEOs no longer think of the CIO as leading the digital world; they think of the CIO playing a role in partnership with the CMO. And that’s a shift in the organization.
Additionally, CEOs increasingly believe that the CMOs could be their successors. That’s a huge opportunity for CMOs. Rarely have CMOs been CEOs in the past. We believe that that will increasingly be true in the future.
CMO.com: If you had to narrow it down, what would you say is the main point you’re trying to leave CMOs with in this paper?
Garg: If I were talking to a CMO, I would say, “You’ve got to embrace technology. You’ve got to take a step back and say, ‘How do I live in an all-digital world?’”
We have a quote from Marc Mathieu, [SVP of marketing at] Unilever, that I think says it best. Instead of thinking about digital marketing, CMOs have to think about marketing in an all-digital world. And if you start there, it has a profound impact on the way you spend your budgets, in terms of the role that technology will play in driving the ship, and that will redefine your organization.
The marketing organization of today has totally changed dramatically. One of the phrases I’ve always used is: “The CMO of tomorrow is the data nerd of today.” The CMOs in their organizations will look very, very different. But it all starts with not thinking about digital marketing as a silo. Think of it as marketing in an all-digital world.
See what the Twitterverse is saying about the changing role of the CMO: