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The CMO Mandate Paradox

A lot of discussion in recent years has been around too much allocation of comms spend going towards tactical and digital activities. While some point to the lobbying muscle of Facebook and Google, and some say the blame is on an industry too focused on being trendy, there is one thing few focus on: the lack of hierarchy in marketing today.

Generally, most people in digital advertising are not evil or sinister. They are just trying to maximize the value of clients budgets in relation to some given KPI:s. In the tactical space, they are doing their best efforts. And if their client contact offers them a higher budget, well hey, someone on the client side has probably done some diagnosis and strategy work to support that allocation of budget.

The same goes for the people at the media agency, the creative lead agency, the performance agency and the agency working with retail. They all maximize the value of their field, and the overall strategy is not their responsibility.

But what if there has been no overall strategy at all?

If there is no conductor, each member of the orchestra will just start playing louder and louder. Even the best violinist in the world has difficulty finding his or her role in an orchestra without sheet music or a conductors’ guidance.

And even if it was possible for that violinist to learn in detail the relative roles of every instrument in the libretto, that would just be inefficient: The main idea of having a conductor is to not have to make all 90 musicians learn the overall picture in detail, but allow them to become specialists. And at the same time to allow the conductor to focus solely on conducting, being able to control every section of the orchestra and to make them work together to create beautiful music.

As different disciplines within marketing are playing their individual tunes, we risk missing out on synergies. Also, if there is no conductor with an overview of all elements, people risk trying to impose learnings and models relevant to one discipline to others, even though they do not apply there. While the insights from Binet & Field regarding a trend of over-investment in digital is true within comms, it may not apply to product development or distribution. While new digital KPI:s and A/B testing can be relevant for tactical comms, it may be all wrong when it comes to branding.

What might then be the ground for a development with more siloed disciplines within marketing? To my mind three interconnected trends drive this development:

  • A lack of mandate for overall orchestration of the things that drive growth
  • An increased focus on short term profits
  • The fear of missing out on new trends and technologies

Marketing is traditionally a discipline encompassing all activities that generate money to a company. As outlined by Mark Ritson et al there is a great importance in diagnosing your market, setting a strategy, and then executing that strategy across both Product development, Pricing, Promotion (comms) and Place (distribution). With a helicopter view across all these elements, you can see how they interact, make informed trade-offs between different initiatives, and work long term.

However, recently CMO:s have lost a lot of control in this area. When Dentsu surveyed 1000 CMOs across the globe, many of the top responses indicate decreasing control: Lack of integration, insufficient control and competing agendas with the rest of the C-suite are all key challenges for implementing the marketing strategy.

As summarized in the very pertinently titled article Why CMOs are only lasting as long as Spinal Tap drummers: “First, finance officers took away pricing. Then, strategy officers who took away market analysis and strategic planning. Product officers took away product. Operations and logistics officers took away distribution. Sales officers took away sales.”

So the mandate of the marketing function is diminishing. At the same time, the same function is still responsible for growth, a paradox that some say may be the cause of CMO:s being the most short lived members of the C-suite. This leads to the second underlying cause of the marketing cacophony: Short termism.

There are a lot of reasons that we are getting more short term focused. Stock markets looking at every quarters sales figures is one driver. Another is the influx of more and more short-term data claiming our attention. On a larger scale, some say that we are in a midst of a global trend across not only marketing but society at large where we are more tactical, and data focused.

The short term focus leads to wanting to maximize the value in each channel or discipline straight away, without taking time to see how such a push affects the bigger picture. “Can we save money in distribution by going digital – let’s do it! How does the loss of physical outlets affect our service level and premium brand position? Dunno, that’s not my responsibility and I don´t have time to check.”

Digitalization, in turn, leads us to the third Horseman of the marketing Apocalypse; FOMO.

From Apps to social media to the current day holy grails of AI, AR and Agile, there seems to be and increasing trend in wanting to be part of the latest marketing trends. And as digitalization adds new needs, new expertise is needed, the traditional lead agencies lose their grip of the overall picture. Social Media agencies, performance agencies, digital agencies take control of different aspects of the puzzle. And perhaps a CMO is too afraid to reveal a lack of understanding to take charge. Better let some new CXO take charge of that new thing.

That is why we end up with a lack of central leadership. And as a consequence of that void, the different instruments in the orchestra start riffing on their own solos. Suddenly the “CSMO” and the social media agency start developing their own diagnosis and strategy, diagnosis and strategy based only on achieving their siloed KPI:s. The Head of Product Development develops his/her own view of the world and strategic prioritizations, perhaps even finding a target group definition that suits the product developments. And then you end up with TikTok Strategies, retargeting marketing that destroys brands, too much consumer centricity in branding, not enough consumer centricity UX, and a general lack of consistency across disciplines and time.

So what might be the remedy? It probably comes down to a clear division of labor: As the complexity of the marketing game increases, each player needs to understand the overall picture, understand what role their instrument plays in it, and at least have some rudimentary understanding of what roles others are playing. Getting a bit humble. If you say; I am fully aware I only play one of many instruments, but this is how I think mine should be best played, is so much more graceful than saying THIS IS THE TRUMPET LET’S PLAY MORE TRUMPET.

  • People in digital/social media: Binet & field DOES show we have gotten too tactical
  • People in traditional brand building: There ARE interesting new channels and formats within digital that can play a great role in tactical advertising
  • Comms people: Outside of Comms, digital DOES have interesting potential within the extended product experience (CX) and distribution
  • People in media tactics: Sometimes the value of consistency MUST trump channel adaptation
  • People in branding: Sometimes a channel I so relevant it CAN warrant doing some adaptation to fit messaging
  • Etc

As for the role of overall vision, the CMO probably needs to take more charge in the boardroom – by leaning on the science behind marketing and getting more savvy in new technologies and buzzwords coming along. Understanding how these things can contribute to growth is key to arguing they should be subordinated to the growth agenda.

There is no shame in doing great tactics. But it should not be confused with strategy. There is no shame in being the greatest violinist in the game. But that skill should not be confused with – nor substitute – the need for orchestration.

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From Barbells to Bananas

A while back, I attended a seminar with a great array of speakers on strategy and marketing (Mark Ritson, JP Hanson, Wiemer Snijders and Rory Sutherland). That experience resulted in a blog post that got a lot of appreciation. So, I went on and extended that blog post and structured it a bit more, resulting in a booklet summarising a few interesting ideas and models on marketing.

Below is an outline of the content, if you would like a copy of the full booklet drop me an email at nils.a.wimby@isobar.com (avaliable in English or Swedish)

FROM BANANAS TO BARBELLS – Six models to guide you in the modern marketing Jungle

Amazon.com lists over 50 000 books on the topic of Marketing and Sales. The top 20 books average over 300 pages each. I would venture a guess that most of these millions of pages are bought but never read.

The booklet I put together is just 30 pages. It is an attempt to keep it simple: six easy models or ideas on marketing. Most of them are borrowed. All of them are simplified.

For each chapter, there are recommendations for further reading. There is a great amount of good reading out there. This is just a quick nibble to get your appetite going.

1. Starting at the right end

 

The first model is about doing your research and thinking before getting to work. Studying the map before rushing out into the world.

Sounds simplistic but is often forgotten when we get caught up in day to day operations. We need to be stringent first in analyzing the market as best we can, then formulating our strategy, and finally executing our tactic measures.

The outcome of your marketing efforts becomes the multiplication of the three phases, meaning it is better to do all three at an ok level, than excelling at two and failing at a third.

2. Weighing your efforts

 

In this section, we explore two important things to consider when allocating marketing budgets:

  • Loyalty is generally very weak, with most product buyers buying very rarely
  • Long term emotional branding advertising and short term sales driven advertising serve different purposes, imply different strategies, and have different KPIs.

The first model illustrates how frequently the buyers of your brand actually make a purchase. Here, research finds that across almost all categories, the majority of purchases are done by people who buy very rarely. The banana serves as as a model to illustrate the shape of the diagram: Almost all volume to the left (less frequent consumers) with a much smaller longtail to the right (frequent buyers).

The second model needs no introduction, it is perhaps the most famous one in marketing today. Binet & Fields model illustrates the duality between short-term and long-term marketing efforts. The key takeout is that if you focus on KPIs that measure short term marketing (sales, clicks, ROI) your efforts will steer towards that type of marketing. In this there is a clear risk of neglecting long term brand building.

3. Consistency, consistency, consistency

What you see here is not a model per se, but it is a good illustration of the third idea in this lineup, consistency. None of the icons above include a brand name but are all instantly recognizable to the majority of consumers. This is a super relevant aspect in a cluttered media message where consumers are bombarded with messages and generally try to avoid advertising. Consistency, to establish recognition in consumers minds, is usually more important than adapting to short lived trends or making sure your advertising feels new and fresh.

4. Looking at the full cost / reward

There are plenty of models describing the amount of reach (and correspondingly media investment) you need to drive consumers from brand awareness to actual purchase. They are known as funnels, just because reach needs to be the biggest at the awareness stage at the top, and then gets narrower as communication gets more tactical and targeted further down.

 

As these funnels are so universally accepted, it is a common mistake to assume that their ratios apply not only to media spend, but to all costs and efforts. But the cost of content creation, tech resources etc can show different patterns. It is therefore important to not just assume that some investments are cheap because the media investment is low, but too look at all costs and resources drawn by any initiative.

5. Who calls the shots

Ambiguity of mandate and decision making in the relationship between client and agencies is present in a lot of marketing work. This is because there is no set formula for decision making and mandate. At what stages of the process does the client, the creative agency, the media agency or the performance agency have to take responsibility – and get to call the shots?

There are a couple of potential pitfalls as a consequence of this: Lack of direction, Over-analysis or flat out Paralysis

6. Putting Innovation Into perspective

As marketers are dealing with the human mind, which is subject to confirmation bias, post-rationalization and a whole host of inconsistencies, it is a mistake to let 100% of efforts be data driven. Those who do may be solving the problems of today, but not hedging against the future.

There are different models related to this. One is the Barbell model. It states that 85% of your efforts should go to low risk, low reward safe bets. 15% should be aimed at high risk high potential reward. The most important bit: Nothing in the middle. Keep your bread and butter work and your experimental efforts well separated, there should be no grey area,

 

 

A disclaimer: This is a list of six interesting ideas around marketing. It is not the list of marketing ideas. There are many others, and of course a huge amount of detail and data underpinning them. But I hope this list may be thought provoking, and get some thinking going around structure and prioritisation in the marketing process.

A very interesting and relevant thing about these models: They are not brand new, not secret or complicated. Yet, they seem very difficult to follow. This is actually a shortcut to success: If you are able to make sure you really follow at least three of the ideas listed here, you are probably doing a better job than the majority of the marketers in your industry.