Species Extinction: Chief Marketing Officer! Endangered: Chief Information Officer …
Large companies are beginning to do away with the Chief Marketing Officer (CMO) role altogether. Johnson & Johnson, Uber, Lyft, Hyatt, and Coca Cola are making do without CMOs!
- Climate change: technology driven conversion
- Habitat destruction: accountability, attribution
- Too high in food chain: spend rather than revenue generators
When I first saw my marketing brethren refuse to take responsibility for revenue I felt baited and switched. And later, when I saw my tech brethren refuse to take responsibility for the usage of technologies they build I felt hypocritical.
If companies are trying to make money why should support functions that do not have revenue responsibility be given seats at the C-Level? While important, the fact that a CMO is responsible for supporting more than one team across a company does not justify autonomy. Arguments for cross business marketing by the CMO are about a need for brand consistency. On the tech side, the Chief Information Officer (CIO) attempts to optimize tech spend while enforcing tech standards and security across business units. However, most business units these days can only scale with dedicated marketing and technology. This should be provided as support to the business units while letting them have the appropriate autonomy and control of their initiatives. Centralization of either marketing or technology is an antiquated notion and simply does not work! These marketing and IT units should report in to the teams they support.
Marketing: It is galling that CMOs have enormous spends but cannot accurately cite how much revenue their efforts and spends actually brought in. Current marketing budget estimations and metrics are not indicative of revenue efficiency. “Ad to sales” ratios do not truly justify spend and marketing “contributions to sales” is calculated somewhat nebulously. In fact, large company CMOs simply cannot calculate a Customer Acquisition Cost (CAC). Few, if any CMOs have a viable strategy to decrease CAC and increase Customer Lifetime Value (CLV). Even if sales could be accurately attributed to this spend, no department in a company should be spending money without direct oversight from business units responsible for products and/or services revenue that such marketing might be attempting to stimulate. Marketing budget and results should be subsumed under the P&L for the product or service lines.
The CMO usually does not have enough tech support and does not truly understand technology. They bring in agency partners to create a hodge podge of disjoint external solutions that are expensive and not even handled directly by the marketing team. The CMO is in no position to innovate in a technology world to meet customer expectations at scale.
Technology: On the technology side, the CIO takes years to put up platforms that become obsolete by the time they are made ready. CIOs are good at adopting core technology for which business use cases are well understood and not dictated by their business partners inside the company. Both because marketing dictates business requirements for marketing technology and because the CIO is not aligned with or responsible for revenue generation, marketing technology builds fail repeatedly. Multi-billion Dollar companies still have a small fraction of their revenue coming through barely stable eCommerce technologies that are already outdated. Key marketing operations that should work alongside these technologies are still manually executed. Often times, misguided attempts to build technology in-house causes enormous wastage when the CIO has to abandon due to neither having the team nor the budget to continue enhancing software to keep up with customer expectations. The CIO is a “late to the table” supporting partner that should not be given a budget for marketing technology without responsibility for the revenue such technology is expected to generate!
Conversion: Efficient conversion and revenue generation is the essence of any business. While a sales force owns this responsibility, empowering them with appropriate propositions for individual customers … at scale … is the unattained Holy Grail. Ever better informed customers want instantaneous matching of their needs. The old paradigm of charming, pretty, appealing, message marketing is at best entertainment as a perk rather than a sales clincher. Instantaneous matching of individual need whether to complete a project, via dynamic price or promotion, or to support with know how … at scale … is a matter of technology. Quick and contextual customer service drives loyalty and is a huge part of repeat conversion and sale. A scalable, customer data driven, machine learning enabled, full customer lifecyle, persuasion architecture is the only technology that can do this. While the CMO and the CIO might understand this at some level, they are definitely not innovative enough or even directly responsible for revenue to propose a business solution that meets the need for conversion at scale.
A GM with P&L responsibility for a product or service line must understand this and be held responsible for it. They can then oversee dedicated marketing and technology teams. These folks deserve seats at the C-level rather than CMOs or CIOs.
The CMO’s tenure has always been short and a trend to do away with the role altogether has started. With digital transformation and future proofing trends, the CIO role also is likely to be recast. So CMOs are headed for extinction and CIOs are probably on the endangered list.