How CMOs need to adapt to change
Marketing has always been a bit of a fuzzy discipline, more art than science. Its critics have long taken potshots at the woolly nature of marketing activity. The millions poured into building brands without any definite measures of success or ROI have meant that marketing spend has attracted criticism over the decades.
John Wanamaker, the American retailing businessman of the 19th century and the first Viscount Leverhulme (founder of Unilever) are both attributed to have said “I know that half of the money I spend on advertising is a waste, but I don’t know which half!”. As an aside, you can read Jeremy Bullmore’s delicious rebuttal of that quotation and all its implications here.
The fact of the matter is, if you are unable to build a case for marketing within your organisation it is quite likely that you will find yourself increasingly running up against your CFO. This is especially critical in smaller B2B or start-up businesses, where a business case may have to be presented to justify your marketing spend. Whether it is a lead-generation campaign or a content marketing budget, you now have to accept accountability.
How do CMOs react to this change of culture? It can be quite bewildering for most, but it is better to look at your CFO as an ally than an adversary. Here’s one such CMO, who talks about how he has acclimatised to a culture of measurement and tracking for better reporting and efficiency.
Remember that CFOs have just as much a stake as a CMO in ensuring that the organisation delivers on all performance metrices. The language that is used differs though – ROI, return on capital deployed, year-on-year growth and so on. Here is an excellent article that offers a perspective on how the CMO can get on the right side of the CFO.
Here are some handy pointers on how you can transition to the Era of Marketing Accountability:
1) Learn how to develop – with your CFO, if necessary – financial metrices that will provide a common basis for measurement. At its simplest, cost per customer acquired is one such example.
2) Train your team to understand and embrace data-driven analytics and performance-oriented metrices. The days of large, multi-million dollar marketing budgets disappearing down a rabbit hole are over. Today’s top managements demand to know how every marketing dollar is being spent and what results were achieved.
3) Set clear goals and objectives for any marketing campaign or plan of action. Older goals such as “We want to increase visibility” or “We want higher brand recall” etc are no longer relevant.
4) Evaluate the suitability of various digital marketing initiatives and their ability to deliver results over traditional channels in your industry. If you’re a B2B marketer, you ought to look at a combination of in-bound and out-bound marketing much more closely.
5) Remember never to opt for a digital marketing initiative merely because there is a perception that it somehow costs lower. Rather, you ought to be evaluating it from the standpoint of being able to reach an “audience of one”, of personalising content and more.: