It doesn't take a CFO to do the math: The growth rate among U.S. consumer companies is just over 2 percent, yet total marketing spending tops $1 trillion a year.
These tough business conditions coupled with performance pressures have put CMOs on the corporate endangered list, with an average tenure of just three years, compared to 7.2 years for CEOs and 5.7 years for CFOs.2
Smart boards should should seek to support CMOs with a strong understanding of technology and the ability to deal with its complexity.
-- Forbes contributor Avi Dan, CEO of Avidan Strategies, suggests.
Nowhere is this more critical or valuable than when it comes to how marketing investments are planned and measured. Current industry standards for marketing measurement include ROIs, which are historic snapshots of past programming performance and multivariate attribution models, which assign revenue contribution to digital tactics only. Both benchmarks are useful in determining what has worked in the past, but neither can predict how best to move a brand forward profitably.
Three realities of today's corporate environment help perpetuate CMOs' technology disconnect:
- Collaboration vs. Siloes: Making informed, holistic and strategic decisions requires visibility across all (digital and traditional) marketing teams, as well as cross-functionally among marketing, sales and finance in order to create a consistent framework for valuing marketing investments and the resulting revenue contributions.
- Action vs. Knowledge: Gone are the days of taking 12 months to research and compile an annual marketing analysis mix. The measurement tools and methodologies on which marketers have relied to this point are largely inadequate to move forward. Consumers and markets are evolving far too quickly, and CMOs need to harness recent advances in technology to make faster, better decisions.
- Decisons vs. Measurement: Big data enables you to know a lot, but it is not always accessible in a way that supports decision-making. Technology is changing this too; new solutions are making it easier for marketers to measure and leverage data strategically to assess value creation. And, forward-looking metrics like marginal ROI can help marketers determine where to invest their next dollar for greatest return.
Today's market demands frequent, iterative looks across a brand's entire channel mix to determine which tactics, investment levels and timing will yield the best return for your business goals. And most importantly:
CMOs need technology to translate those insights into a plan and forecast they can stand behind with confidence.
Leaders of the Data Pack
According to a recent Forbes Insights and Customer Data Platform (CDP) Treasure Data global survey1 of 400 marketers, despite a growing number of companies using data in their marketing efforts, only 13% consider their companies leaders in leveraging customer data, with the remaining 87% identified as laggards.
Yet companies continue to increase their spending on data, and there is strong motivation to increase levels of real-time data and decision-making as part of customer data analytics.
For CMOs to get the return and value creation, they will need to cut through the data clutter and correctly interpret results.
Most marketers surveyed (73%) want to better understand their data and prefer an integrated approach to collecting, analyzing and measuring it. Companies are struggling with more data than ever before and with the challenge of how to fully manage, analyze and leverage it.
Key to Survival: Technology
Despite these obstacles, the CMOs who make the connection between technology and their success are winning and that's good news for their career longevity too:
Companies identified as leaders in leveraging customer data posted returns of 26% compared to the laggards at 8%.
CMOs who will thrive in this challenging and rapidly evolving environment will be those who create a connected, action-oriented, data and decision-driven organizations focused on profitable growth and value creation.
Winning CMOs and companies will collect, analyze, interpret and measure data strategically, and will post significantly higher returns and achieve success.
3 Ways to Thrive:
- Share Data. When CMOs create an open, data-driven environment with both their marketing teams and analysts, those teams are more engaged and informed, and better decision making often results. Lesson: Informed marketing teams are more likely to identify great opportunities through analytics.
- Let Strategy drive Data. Understand your company strategies first, and then decide what data is needed to accomplish the goals. Lesson: This will ensure better integration between marketing and IT.
- Hire Early Adopters. Hire marketing talent who are early adopters of technology and have a data-driven mindset. Lesson: You need a team that will embrace the importance of technology and interpret data.
1 A New Survey Reveals That CMOs Are Facing The Shortest Lifespan In The C-Suite, Forbes.com, March 26, 2017