Marketing in today’s digital age, is no longer limited to all that goes into building brands & their awareness – but includes sales revenues as well. This may well be attributed to the combined effect of online digital marketing & offline activation based on today’s need for real time customer response & conversion.
With consumer preferences evolving at a rapid pace, the marketer needs to bring in a unique set of skills that not only satisfies the needs of consumers but also helps business stay relevant and most importantly, profitable.
Hence, it may be the right time to redefine the role of a Chief Marketing Officer (CMO).
Changing Marketing Mix
Today, the term marketing includes a broad array of activities & responsibilities which extend well beyond traditional advertising & communication. This definition has naturally evolved over the past decade or so – as a result of two major trends in marketing investments in the recent past are Offline activation and Online digital marketing.
Over the years, marketing has also been earmarking an increasingly large share for offline, on-ground activation which (till a few years ago, was considered as a part of sales activity). Apart from being an important bit of the consumer purchase journey, activation also culminates in offline sale in a good number of cases. Besides, with an increasing internet and smartphone penetration in the country, marketers have realized the growing role of online marketing – which provides innumerable ways to engage with consumers during their purchase journey – right up to & including online sales.
With the rise of data-driven two-way communication, a good part of digital marketing has practically become direct sales promotion. If we were to make an offline comparison, just imagine a scenario wherein a significant part of TV commercials were designed to directly activate sales. The trend of data-driven two-way communication will only increase as traditional media goes more digital. This clearly establishes that marketers increasingly wish to link marketing investments directly to sales revenue.
As if to confirm this development, Samsung Electronics Co. was the world’s largest advertiser in 2017 with USD 11 billion spends on advertising & sales promotion thereby overtaking Procter & Gamble Co.(P&G). Of this total spends, USD 7 billion was linked to promotion and direct sales initiatives(1).
Changes in Designation/Role
Given this redefinition of “marketing”, does it call for a redefinition of the role of a Chief Marketing Officer (CMO)? The answer is apparently, Yes – to a certain extent. And this is reflected in change of designation of CMO’s.
In the past decade, five out of every hundred large marketing companies have done away with the CMO designation. Or to put that accurately, revised it variously to ‘Chief Growth Officer’, ‘Chief Commercial Officer’ or an even longer “Chief Customer Activation & Growth Officer”!
Regardless of whether the CMO’s designation is being done away with or replaced, the role of the CMO must reflect the new ways that brands are reaching out to their customers & prospects, like data-driven personalised communication or on-ground activation – both of which can trigger sales and have a bearing on company’s bottom line.
Going a step further, CMO’s should no longer view marketing as bound by activities within the marketing department. Instead, they should embrace diverse functions of the organisation – starting with sales & moving to product innovation (which will naturally involve finance, technology & even manpower management) – to lead the charge for the organisation’s quest for growth.
One reason for marketing organisations to ‘move away’ from CMOs may be that the role clearly lacks financial accountability. Historically, marketing investments were limited to one-way marketing messages to tell the customer about the brand & what it stood for. Hence, the CMOs role was linked only to spends and had very little need to justify & substantiate marketing investments.
Now that it’s possible for two-way conversations with the customer, the definition of ‘marketing’ is changing. And that’s reflected in the replacing of CMO with titles like Chief Commercial Officers / Chief Growth Officers / Chief of Brands (sometimes with a regional hierarchy) – with enhanced roles encompassing loyalty programs, sales, distribution & customer-service along with corporate marketing, communications & digital, i.e. brand building.
Today’s marketing includes a broad array of activities which extend beyond traditional advertising & communication – leading to total responsibility for the brand in all its dimensions. The idea is to ensure that CMO or equivalent not only focuses on building brands, i.e. creating brand equity & driving consumer preference – but also tracks how much of that equity translates into revenue growth – both top line & bottom line. Evolving into a sort of “profit-and-loss responsibility” of the company’s brands.
So, while Marketing which was traditionally perceived as a right-brain activity – connected to creativity, communication – it is now a balance of left-brain (sales, revenues) and right-brain (creativity, communication).
The CMO’s new role is also about having a cohesive story for all the brand’s business constituents, viz. consumers, partners, media & the Govt. – unlike earlier when the CMO’s target was restricted mainly to its consumers.
All said and done, ultimately, the new role is clearly driven by a need for financial accountability!