What 5 years of the CMO brand has taught us about marketing leadership

As we celebrate 5 years of the CMO from IDG brand in Australia, publisher and editor, Nadia Cameron, takes a look at the big trends that have emerged, from marketing clouds to the rise of the chief customer officer

Five years ago in May, IDG tasked me with launching CMO as a brand in Australia. It was a decision driven by two factors: One, the exponential growth of technology in the marketing sphere; and two, the rising role of the marketer as an executive leader of influence.  

When we started, it was clear marketers were already in the midst of significant change and experiencing a shake-up – in opportunity, in complexity and in executive expectation. Digital disruption, connected customers, the rise of social media and an explosion of channels with which to interact and communicate with consumers all challenged marketers to lift and pivot their game if they were to successfully help their organisations achieve competitive advantage and sustainable growth.

Succeeding in such an environment has required a transformation of everything – from skillsets to platforms and connected systems, a shift from campaign mentality to customer engagement-led approach, and fostering cross-functional collaboration and harmony.

So in five years, what are some of the trends we’ve seen and things we’ve learnt about being a CMO?

1. Creation of the Marketing Cloud

We’ve all seen Scott Brinker’s marketing technology lumascape and born witness to the explosion of software applications and platforms coming into the marketing and advertising sphere. There are 6829 solutions listed on that lumascape in 2018, up from 150 recorded in 2011.

In fact, when we first started CMO, the martech landscape was often called the wild west of technology. But as with any technology hype cycle – and I think CRM, enterprise databases and ERP as classic examples – these technology offerings quickly matured into comprehensive stacks.

Largely through acquisition, we’ve seen a rapid evolution of the Marketing Cloud and rise of enterprise-grade vendors providing a suite of integrated ‘stacks’ of software capability.

The Forrester Wave: Enterprise Marketing Software Suite Q1, 2018, noted seven of the most comprehensive vendor EMSS platforms now available as part of a 40-criteria evaluation of offerings currently in market. The platforms all had to provide customer data management and analytics, campaign management, advertising and interaction orchestration and delivery, as well as some marketing resource, content and performance measurement capabilities. The brands are now familiar to many: Adobe, Salesforce, IBM, SAP Hybris, Oracle, SAS and Marketo.

What’s included in these marketing clouds is still a moving feast. In more recent acquisitions, vendors have been extending their reach across into adtech components as they look to bring direct (known customer) marketing together with media spend (and the unknown). Good examples include Salesforce’s acquisition of DMP player, Krux, and Adobe’s of programmatic video technology, TubeMogul.

Over the past year, these clouds have been getting somewhat of a rebrand and repositioning too, with ‘experience’ in some cases superseding ‘marketing’. Integration between marketing clouds and other business platforms has also become an imperative.

And they’ve continued to gain new capabilities. As it becomes clear martech is only as good as the data you access and use, and the customer understanding you respond to, we’re also seeing new categories emerge such as account-based marketing, customer data platforms and sales automation and enablement.

Arguably the biggest disruption to date, however, is the introduction of AI/machine learning capabilities. These are being injected into the underlying framework of marketing clouds in order to further automate and support brands in personalising and utilising data for customer gain. And they’re powering features such as image recognition and attrition models through to chatbots. We’re only at the very early stages of this intelligence.

As tech capability has grown, so too has the marketer’s tech budget. According to our new State of the CMO 2018 (see page 26), more than one-third of marketers control upwards of 90 per cent of marketing and customer technology dollars in their organisations – that’s up 14 per cent year-on-year.

We also found 31 per cent have sole purchasing power this year, a far cry from the 8 per cent we recorded when we first asked this question in 2014. And more than half make joint purchase decisions with IT or digital colleagues. Only 4 per cent don’t have any influence.  

2. Rise of the chief customer officer

Funnily enough, when we launched CMO, we started with the assumption marketers owned the customer and all engagement. Turns out, we were tapping into the aspiration and need, not necessarily the reality.

Marketers were all over acquisition, but didn’t often have jurisdiction for end-to-end customer experience. This I’m happy to say, is changing, although the extent to which marketers control all the levers across the lifecycle differs widely. But certainly they’re gaining a lot more of the responsibility and remit.

Digital has triggered a complete shift in the way organisations deliver utility, value, efficiency, simplicity and emotional connections with customers. And much like digital disruption, customer-led transformation requires a leader to bring cross-functional, disparate teams into one unified whole, all following the same customer-fuelled vision.

Hence the rise of this new job, the chief customer experience officer.

What is meant by ‘chief customer officer’ depends on who you talk to. In some instances, the CCO is an extended marketing leadership position, while in others, it reflects ownership of the end-to-end customer lifecycle, including product to digital, data, strategy and more.

At Mercer, for example, chief customer officer, Cambell Holt, oversees marketing, customer experience, commercial partnerships, customer platforms, digital, insights and analytics and strategy. Last year, Qantas also appointed its group executive of brand, marketing and corporate affairs, Olivia Wirth, its first chief customer officer with a remit that now extends to customer and digital strategy.

Taking a different tack, NAB introduced three chief customer officers nearly two years ago to sit at the top of each of its three business units. At IAG, chief customer officer, Julie Batch, sits across the Customer Labs division covering customer experience, digital delivery, data, product, pricing, marketing innovation and new business incubation. One of her direct reports is CMO, Brent Smart.

According to this year’s State of the CMO, half of respondents took on customer experience as a functional report in the last 12 months, and 62 per cent have customer experience as a function reporting into marketing today.

When we asked who ‘owned’ CX, top was CMO (33 per cent), followed by chief customer officer (20 per cent). Notably, however, 15 per cent said ‘no one’ owned customer experience. A number reported joint CX ownership, typically across marketing and operational teams.

But it also depends on how the CMO is perceived in the business. It’s CMOs reporting directly to the CEO, for instance, that tend to own the customer experience function in greater numbers.

With all this shape shifting around both c-suite make-up and the remit of the CMO, it’s unclear how prevalent ‘chief customer officer’ will be in the longer term. But expect a lot more shuffling in the c-suite and the CMO remit in the coming few years.

3. Agility and continuous learning fixation

This evolution, expansion and arguably confusion over what it means to be in ‘marketing’ has led to another big trend: That of adaptability and resilience. If you’re going to keep up, you have to be happy to change and learn constantly.

You only have to read a few of the CMO50 profiles to see how much this continuously improvement and focus on resiliency is on the minds of CMOs. As a result, we’re seeing a widespread shift to trying to embrace agile as a way of working across marketing organisations – and incidentally, entire organisations.

Commonly now, marketers talk about sprints, leaning in, cross-functional cohorts, co-creation, human-centred design and design thinking and growth hacking. It’s the language of software development and user-experience design coming into marketing speak.

4. Data-driven everything

A massive pain point for marketers over the past five years has been utilising data both for customer gain, as well as marketing efficiency, decision making and innovation.

There’s widespread recognition of data as the lifeblood of marketing and customer engagement, and most local organisations have some form of data transformation project on right now. Looking again at our State of the CMO, we not surprisingly found data utilisation as the number one skills challenge for marketers, with data analytics and science coming in at 82 per cent. CMOs also rated their data capabilities the lowest out of a range of areas of expertise.

The flip side to this is how data is used across the lifecycle of interaction with a customer. Australia’s Privacy Laws, GDPR and backlash against Facebook’s data sharing practices are all recent examples of just how careful and considered data in marketing needs to be to avoid the ‘creepy factor’.

There’s always a danger of using data for its own sake, too. I’ve had many conversations about the balance of data and creativity, art and science. There’s growing recognition just being able to target a certain customer or audience segment isn’t the only thing that matters. It’s why you’re doing it, and the relevant and contextual value you’re providing in that moment of interaction, that is of utmost importance.

One trend pointing to a correction is in-sourcing of content production alongside significant investments into customer insights and analytics capability. Marketers are also tapping into psychological and social behaviours, a move that see new data sets coming into play as well as ways of understanding customers on their terms.

5.The rise of the new agency/partner

With all of this change, it’s no surprise traditional partners marketers worked with have had to transform, too.

In recent years, the sides of the triangle connecting consulting house, traditional agency and implementation partner have disappeared. Here’s just a sample: Accenture’s acquisitions of The Monkeys, Fjord, Reactive Media, Acquity Group and Maud; RXP’s purchase of The Works; and Deloitte’s acquisitions of The Explainers, Digiviser, Cinder Australia and SixTree. In addition, we’ve seen the launch of CMO advisory practices by KPMG, Accenture, PwC, Capgemini and IBM.

As technology offerings within the marketing, advertising and customer engagement sphere proliferate and mature, a growing need has develop around both realising their potential more successfully, and joining the dots between these features, functions and importantly, data sets, as well as with the wider enterprise technology stack.

Our recent research with Capgemini made it clear there’s a huge gap around realising the benefits of technology in marketing right now. Half of respondents weren’t realising the benefits of customer technologies, or believed their organisations had effectively transitioned to the digital economy, and less than one-third had had any kind of category innovation in the past year as a result.

As a result, we’re seeing a new breed of integration and implementation partners emphasising marketing and advertising technology implementation, orchestration and optimisation.

If the traditional IT space is any guide, we’ll see experimentation, expansion, re-engineering and consolidation of these partner models for some years yet. There will also be jostling around the extent to which partners run and support customer technologies on behalf of their clients. Marketing-as-a-service may well become a reality sooner than many of us think.

Up next: 5 things all CMOs should be thinking about for the next 5 years

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