It’s a tumultuous time to be a CMO.
CMOs have the shortest tenure compared to anyone else at the C-suite level, estimated to last only 40 months on the job. Despite rising from its lowest position at 23.2 months in 2006, it is still half the average tenure of the CEO.
Large-scale research from 2017 concluded that the reason why the CMO position was so tenuous had to do with “faulty role design,” wherein the responsibilities of the role don’t align with business goals and performance metrics.
Recent research from Google expanded on this pain point further, finding that, in the absence of clear direction or definition from either the board or the C-suite, CMOs often struggle to define what they should be focusing on – or, more to the point, to prove what they’re doing is worthwhile.
And all of this gets worse in economic downturns.
This July, a Sapio Research report found that 95% of businesses worldwide are concerned about a potential recession. The research also showed that, as has always been the case, marketing budgets will likely be cut early as CFOs look for ways to cushion the blow. Advertising budgets are often targets as they are not fixed and can be redirected at short notice.
“While many companies say that their top mitigation strategy will be ramping up sales and marketing activities, most are still likely to bite the hand that feeds them,” said Jane Hales, managing partner at Sapio Research.
Despite plenty of research proving the contrary, as many as 40% of CFOs still don’t think marketing investments should be protected during a downturn.
Making matters worse, the increased pressure CMOs feel to defend their budgets from CFOs means they have to prove their worth even faster. Fifty-eight percent of marketers are required to prove ROI within the first month of a digital campaign, and 36% of marketers say their reporting cycles for marketing performance are growing shorter yet.
To cope with these pressures, CMOs are often forced to default back to short-term, activation-focused advertising to make it easier to prove the value of their campaigns with the data they can already collect. 70% of marketers feel they’ve over-invested in “short-term” performance at the expense of branding initiatives.
This creates a “vicious cycle” for CMOs: While long-term brand marketing is by far the best investment for future growth (the IPA finds that an optimal balance of advertising budget tends to be an average of 60% brand building and 40% direct response), the value of brand building activities isn’t as immediately apparent.
Under pressure to prove themselves to the board, CMOs over rely on measurable short-term marketing… and, because they aren’t laying the groundwork with brand building, they set themselves up to never produce the kind of long-term growth their CEOs want. Then, they just have to keep proving themselves to the CFO to save their budget, which means they’re back to square one with short-term marketing.
EY CMO John Rudiasky recently characterized the path forward for CMOs perfectly: “For a lot of CMO and boards, it can be ‘the more I talk about automation and data, the smarter they think I am. The more I talk about creativity the less they think I know.’ We need to re-balance this conversation as both are critical growth drivers.”
So, how can the industry re-balance this conversation? Rudiasky has an answer for that, too: “The smartest marketers still know that creativity is the defining difference in driving brand and business performance – only now it’s augmented through incredible new technology.”
From media fragmentation to content proliferation, advertising has become incredibly complex. At the same time legacy channels have become more expensive and less effective. Linear TV used to deliver reach at a huge scale - but its reach is declining, falling to ~25% of daily media consumption in North America. While it is still a very effective medium, it is becoming more and more expensive. Costs have increased 31.2% since 2019 – “the steepest incline in over two decades,” Warc reports.
Many CMOs are looking to innovative new technologies as they pivot to new advertising formats.
For example, Aude Gandon, the Global CMO of Nestlé, decided to upskill the entire Nestlé organization (of more than 2,000 brands) to make the shift from TV-first advertising to digital and audience-first advertising.
Gandon faced three challenges:
To solve these challenges Gandon and Nestlé needed a solution that could unearth the data hidden in their creative and then make it relevant, actionable, and widely available. Delivering reality (i.e., fact-based decisions), alignment, (i.e., shared reality), and scale (i.e., global learnings) required technology. Nestlé were looking for a one-stop-shop solution to deliver their digital transformation goals. Automation, analytics, and attribution played an important role.
Technology created the problem CMOs are facing today, and plenty of top CMOs are using it to transform those challenges into opportunities.
There’s a central commonality in all of the challenges the modern CMO faces: the inability to quantify the commercial impact of creative in an objectively demonstrable way. Without this objectivity, CMOs are unable to demonstrate their value to the organization in a clear and inarguable way.
As a frequent result, the C-suite misunderstands the role of the CMO and misaligns their responsibilities with what they actually could or should be delivering.
There is a solution to this conundrum, and some CMOs have already found it. The CMOs that excel today are those who use emerging data and technologies to objectively quantify the impact of their creative decisions. Not only does this help them define and excel in their evolving roles, but it also helps them take a new role in leading their organizations into the future through smart, data-empowered decision making.
Here’s how real CMOs are using creative data tools to capitalize on each of the big opportunities CMOs have to work with today - in their own words:
Poorly defined CMO roles and misaligned expectations haven’t just hampered the position, but businesses and their strategies at large. As CFOs gain more responsibility for guiding corporate strategy, ThinkwithGoogle reports that “close collaboration between the CMO and CFO can accelerate revenue growth and unlock incremental financial improvements of 20% to 40%.”
By teaming up, CMOs and CFOs can each provide the other what they need to excel. Better yet if they can develop a strong partnership built on things ranging from: a mutual understanding and partnership built on shared goals and strategies; to shared business KPIs to track and measure progress and success; to a united front when co-presenting to the board.
Right now, CMOs and CFOs equipped with the right tools are using creative data to develop a clear, shared set of objectives that directly deliver on financial and business goals and objectives to completing these goals.
This new partnership also provides opportunities for both roles to improve at their respective functions. For instance, as McKinsey notes, working with the CFO on business objectives allows the CMO to ensure these goals reflect the health and value of the customer base. Meanwhile, CFOs can teach CMOs how to better align their metrics and KPIs with financial and growth business goals, to better prove their value in the eyes of the board.
CMOs use creative data technology as a means of connecting with the CFO. Together, they design KPIs that will measure ROI and ROMI in a way that makes sense for both of them. This helps CMOs and CFOs understand each other’s goals and ensures CMOs learn how their marketing can deliver value on terms the rest of the C-suite will appreciate.
As Rakuten CMO Yuko Oki noted, “CMOs are working at a time when we have to be more conscious of the financial value we can bring to their businesses.” What better way to do that than by working directly with the team that defines financial value in the organization?
Today’s CMOs are CreativeX’s tool to automate formerly time-consuming tasks such as creative reviews, compliance checks, creative quality adherence, and more.
“Demand for marketing activity will always exceed capacity,” said University of Technology CMO Carolyn Bendall, “so it’s important the marketing teams are equipped with the right data and analytics to be able to prioritize their work around what adds the highest value for both the customer and the organization.”
CMOs like Bendall are increasingly using automation to prioritize their most crucial and strategic responsibilities. Automating tasks like reporting and data visualization won’t just give CMOs back time. It also provides new levels of immediate clarity into creative data and the story it can tell. Rather than spending time unpacking and analyzing what the data means, CMOs can immediately begin using the implications of their data reports to make quicker and more effective decisions.
One of the most important ways creative data platforms help today’s CMOs is by defining and measuring objective metrics of creative efficiency and effectiveness.
By leveraging metrics that can reliably, objectively measure the efficiency and effectiveness of a campaign, CMOs can shift their decision-making from subjective and instinctual to objective and data-driven. Even more importantly, it also gives them the ability to demonstrate exactly why they’re making the decisions they do and to show the impact of those decisions in clear, reportable terms.
Marley Spoon CMO Kate Whitney put it well when she said, “Opinions don’t count. Data does.”
“As experienced marketers, we can punt or create a hypothesis about what will or won’t work to deliver an outcome,” she said. “But at the end of the day, the brutal practice of dropping what’s not working is the single most important thing a senior marketing leader can do.”
Instead of guessing what is and isn’t working, creative data can show CMOs how and why their content is over or underperforming. It can even make suggestions about how to improve performance in current and future campaigns. CMOs can adapt this information into creative strategies for continuous improvement.
After determining metrics that measure effectiveness, CMOs can use those metrics to isolate the factors that work and don’t work in their marketing on a similarly objective basis.
“Most historic models are no longer relevant,” said Qantas CMO Jo Boundy, “so it is critical to use real-time insights to inform business decisions and respond to changing customer needs.”
This counts double for marketing, and creative data technology has a major role to play here, as well. By designing robust tracking and attribution models, not only of forms of marketing, but individual elements of marketing as well, CMOs can attribute success or underperformance much more specifically than ever before.
Armed with specific attribution information, CMOs can very quickly optimize both the macro forms of creative they produce and the micro elements that creative possesses in order to affect (and demonstrate) objective, measurable success.
For more information on how creative data technologies can help CMOs evolve keep up with the CreativeX blog. To tap into the power of creative data now, get in touch with the CreativeX team.
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