Recommendations to CMOs

Greg Welch, a consummate marketer (who happens to place CMOs), has the following advice... which I mention later rather than sooner as I get back on track with my postings....

Courtesy of Ad Age (1/26/09 - ok I'm digging through old piles):

• Lead from the Front "Reassure your team of the broader mission, progress to date, and plans for the future....Obviously, honest and authentic leadership works best."
• Be a Translator "Explain your agenda & determine how you can deliver tangible business value -- inspire trust & build trust, you need everyone's support. This sounds trite, but assess the value of the CMO role, and leverage it!
• Tap into the wisdom of your firm. Innovation happens from within -- it's just a function of your ability to listen. If you ignore the thoughts of others -- it's YOUR loss.
• Knock on the CEOs Door - Candid assessments from the King are always key - ensure your vision is the same, your career depends upon it.
• Take calculated risks. "Great CMOs take action." Move quickly - pick a pilot to champion, and move from there...

Why Marketing ROI Still Flounders...

A recent study executed by Lenskold Group and Marketsphere highlights an interesting disconnect that occurs as organizations attempt to measure marketing performance. Companies want to measure the effectiveness of their marketing efforts, but they don't budget for it. This is a problem that I've encountered throughout my career, and it's worthy of discussion.

As reported, although 79% of marketers indicate that need for measurement of marketing effectiveness has increased, only about 25% of them had actually budgeted for it. For highlights and the report itself, go here -> http://www.lenskold.com/content/2009mroistudy.html

This problem is pervasive, what are the root causes? Obviously they are complex, but here are some gaps to consider as you attempt to put these measures in place.

Measurement by Tactic
Certain tactics are simply much more difficult to measure than others, so attributing a return to them is tough. Some I've struggled with -- advertising and trade shows. You can cite sales tied in part to the activities, but attribution directly to them is questionable. You end up with "management by anecdote".

Cross-functional Dependencies
You need to tie the work of your sales teams to the marketing activities you execute, but you don't have the authority to mandate their compliance. I basically want to know how many sales calls, RFPs, and new revenue dollars result from a specific effort, but many sales organizations often don't track those things. Or to put it more precisely, sales will often fail to attribute any of those items to something that a marketing activity may have helped them achieve.

Cost of Measurement
Determining the "ROI on ROI measurement"can in itself be elusive. You can make a set of assumptions about lift that can be achieved by allocating dollars to higher-return efforts, but when you determine the data and system support that you will ultimately need for your ROI "inputs", it can be daunting. Leadership has to take the "long view" to reap the incremental annual payoffs -- in contrast to the quarterly reviews their investors require.

I could go on (e.g. team skill set gaps, complexity of sources, etc.), but instead I'll make a recommendation -- start small. Go through the pain and effort of performing the ROI exercise just once, on a meaningfully sized amount of spend, and share that with your CEO. The light bulbs will begin to go off...

CMO Pay: Who Gets What

Alright, forgive the delay since my last post. The new job has enveloped me, but I'm going to commit now to a once a week cycle, so please check back for more solid content in the future.

As an on-again, off-again reader of Ad Age, I returned to it recently and found an article on CMO pay fairly intriguing. The article, "CMO Pay: Who Gets What", was a result of the magazine's collection of publicly available information on 2007 pay packages for CMOs.

The table of the top 100 available pay packages is located here:
http://adage.com/datacenter//datapopup.php?article_id=129916

At this point, no real comments, other than to say, "more power to them." As one of the most fleeting executive roles, these folks should definitely be compensated for the risk that they undertake in these positions. One can only hope that the appreciation for this role continues to rise, and that pay within the marketing function continues to increase as well... :)

So you want to be a CMO...

Ever wonder what broad credentials separate senior marketers from their C-level contemporaries? As part of a conversation this week, I was guided to some white papers by Bradford McClain of Russell Reynolds, which provide some really good insight - http://www.russellreynolds.com/pdf/thought/RR0042%20Succussful_CMO_WhitePaper_8.pdf.

He references the following broad competencies:

• Strong business and financial acumen and ability to link marketing directly to corporate strategy
• Successful brand management and equity building
• Ability to develop strategy from analysis of insights
• Success driving results and delivering ROI
• Comprehensive program development skill across all relevant channels
• Ability to forge strategic alliances
• New product development skills
• Marketing and communications skills

Aside from some great content that can form the basis for a critical look at one's skills, Brad really captures the essence of the role in some other great ways. "The CMO must represent the voice of end users and be their advocate, inserting and often forcing their perspective on every relevant business issue the company faces."

The white paper also discusses critical success factors and organizational needs for the role, while acknowledging the turnover that occurs along with reasons. It is refreshing to run across someone who can articulate the role so effectively, and is also involved in identifying this talent for organizations.

If the CMO role is a career goal, these white papers are a worthwhile read. Special thanks to Jeff McCay for steering me this way!

From Ad Age's CMO Roundtable...

Wanted to present some interesting ideas from a webcast posted today via Ad Age: http://adage.com/print?article_id=125823

Although the use of TV was part of the focus of the CMO discussion, I thought there were a number of useful insights that should be repeated here, primarily on the use of media in today's advertising environment. But first, on the role of TV today, these CMOs believe that:

• TV has always, and will continue, to play an important role in building immediacy and awareness --- and now that there are more media options, the growth rates in "cost per thousand" for TV are starting to slow
• TV is still the only media that can provide truly massive scale and a forum where people can come together and actively experience the same content together (e.g. Super Bowl)
• TV is still the consumption channel of choice for a wide variety of users

But, to segue, as Bob Stohrer (CMO, Virgin Mobile) states "There is a balance between immediacy and awareness that TV still delivers that a communication plan should be architected around." Some other factors that should be considered relative to media spend/strategy:

• CONTENT is still KING - greater specialization in content and media will continue
• People want to interact with your product/brand in different ways --- teens consume media (YouTube, etc.) differently than Baby Boomers (some still read the newspaper)
• Now that there are so many media options it is easier to establish relationships with smaller audiences using more specific methods for fewer $s

From a marketing standpoint, it is a very exciting time. The variety of tools available has never been larger --- the challenge now is to focus on the right ones for your audience. The good news is that, if you pay attention, they will let you know what they want.

Are you SEM literate?

If you don't have a solid understanding of work being done in the Search Engine Optimization (SEO) space, you are putting yourself at a disadvantage as a marketer. If you don't believe me, just try to locate your company or your product via search online. Is it easy to find? Are you showing up in the critical "top triangle"?

As the following article discusses, although SEO is still in its infancy, it is also a five year-old discipline, and it is a true "game changer". Can any of us really state that we don't go online to research critical products before purchase?

The article is Tough Questions for CMOs: http://www.dmnews.com/cms/dm-news/search-marketing/42353.html. Some good points that this article makes relative to typical corporate SEO efforts:
- You need to be playing in SEO from a strategic standpoint at some level, regardless of its current ROI to your organization. The skills garnered from experience and the defensive nature of the efforts provide value beyond the pure return.

- You need to make careful Search Engine Marketing (SEM) agency selections. In particular here, not all agencies are the same, and the evolution here takes place quickly. Do good due diligence.

- Search is only a small part of your budget because you don't pay a lot of attention to it. Somewhat "tongue and cheek", but those who are experimenting w/search today, are generally getting a great deal of value out of it, and that is leading to more incremental SEO spend over time. My organization can vouch for this.

- Know your "search share". You need to know how often you end up as part of the critical search results that show up at the top of primary key word searches. This is a "market share" game, and if you aren't acquiring this space, your competitor is. Use cost/benefit, but be aware of the defensive nature of this game too.

There's much more on this. Take a look at the article, but look past it once it's provoked some thought. After recently attending the Online Marketing Summit, I've gained a lot of perspective on this that we are apply in our business. My hope is to post some of the better presentations from that Summit (with permission), but I haven't been able to identify a way to do that via this blog yet. More to come.

Words from Kimberly Clark CMO

More wisdom from marketing leaders, via the Advertising Report. Anthony Palmer, Kimberly Clark's recently appointed CMO (a new role for this CPG company), is charged with aligning the organization's brands, integrating the Internet as a channel, and addressing the threat of private label goods. He shared some insights here (some of which I reference below): http://online.wsj.com/article/SB118713327561397831.html.

The role of the CMO is to "...inspire the organization to take calculated risks" and "...have a view about what your brand stands for".

On branding:

• "...a brand is a promise and the product is a delivery of that promise"
• "I believe brands are more salient today to consumers than they ever have been -- they
  are a simplifying mechanism in a world where there are many more options."
• "focus all of your spending on the pinhead of the brand idea and break down
  the barriers to participating in the brand."

I found his articulation of "the brand" very insightful. As a senior marketer you must have a consistent view of your brand, be able to articulate it, and then convey how your product/service is essentially a manifestation of that brand. If you can do this convincingly you can simplify the decision-making process for your customer.

More on consumer insight

From this month's issue of "Marketing Magnified" from the CMO Council, a discussion with Gary Cohen, CMO of Playtex: http://www.cmocouncil.org/resources/marketingmagnified/2007/july.asp#gettoknow.

Gary highlights some interesting things that Playtex does to truly understand what their customers want. Among them:
- Councils - regular discussions with heavy users to get "needs and wants insights"
- Internal Brainstorming - identifying "hidden truths" directly from consumers and then distilling them into competitive differentiators
- "Consumer immersion"

He indicates that the "test is how pure the insights are and [whether or not they] can provide competitive advantage."

One obvious key to gathering insights is spending considerable amounts of time with your company's customers. Although obvious, one critical question: How much time is your organization spending directly engaged with your customers? If a meaningful dialogue is not consistently taking place, your company is at a disadvantage.

The Most Dangerous Job in Business

A friend just mentioned this article to me: http://www.fastcompany.com/magazine/116/next-most-dangerous-job-in-business.html. It's a more recent discussion of the difficulties that are tied to this role, along with another reference to the CMO study mentioned in a previous post.

One assertion (which I'm going to mention here because I think it is at least partially true), is briefly alluded to in the article, is that marketing is a function that most people don't truly understand. Although it is certainly not rocket science, do most folks really understand the important interplay between understanding customers, developing compelling products and messages, and then using data to deploy and refine them?

Marketing, for better or worse, encompasses an extremely wide breadth of activities and perceptions - from product development (Apple) to pricing (Wal-Mart) to customer experience (Virgin) to effective data use (Harrah's) to effective branding (Starbuck's). There are so many skill sets that have to interact effectively and, generally speaking, responsibility for different components rarely falls within the same umbrella.

Now I'm certainly not advocating that marketers rule the world, but a failure to understand the way that marketing is interwoven among multiple complicated functions is what ultimately leads to failure for companies on numerous fronts - and CMOs are currently feeling the impact.

Tenure for CMOs continues to decline

Although dated, some very interesting insights from a Spencer Stuart study on CMO tenure, along with some recommendations for those of you stepping into this executive role:
http://www.spencerstuart.com/about/media/39

As recent incidents like the Roehm firing at Walmart illustrate, we would all be wise to take Welch's comments to heart. Broad marketing expertise, the CEO relationship, and cultural fit are all crucial components of a successful CMO endeavor.