Growth CMOs are all the rage. Is it because so many brand owners need to show shareholders quarterly growth? Is it because digital marketing is so measurable and data so available that they have attracted increasing budget share away from branding channels into trackable ones? Is it because growth hacking is slowly spreading from the low-budget, digital-only domain of the technology startup into mainstream marketing teams? Or that the “hockey-stick” growth some of these startups can show has made predictable, slower, long-term growth look so 20th-century? Probably, it’s all of the above.
There’s a vanguard of prominent marketers and academics, led by the likes of marketing professor and columnist Mark Ritson, marketing effectiveness expert Les Binet and LVMH marketer Mathilde Delhoume, who argue that brand-building should not be neglected in the rush to digital media, big data, and the pressure to show sales growth — or more particularly, that short-term growth at the expense of long-term brand building is unsustainable.
Others, such as author and New Yorker columnist Ken Auletta, argue they’re trying to hold back the tide, and the battle is essentially over: “the Mad Men who once ruled advertising… have now been eclipsed by Math Men—the engineers and data scientists whose province is machines, algorithms, pureed data, and artificial intelligence”.
Inherently, growth in business, as in marketing, should take long and short-term measures into account. For CMOs today, even if brand is your passion, growth must be in your DNA.
Like ‘Grease’ before it, ‘growth’ is the word… is the word… is the word… is the word…
But don’t just take our word for it. Here are 6 signs the only good CMO is a growth CMO… or soon will be.
Playing a key role in growth initiatives overtook being able to quantify the effect of marketing and being the voice of the customer as the top priority of being an effective CMO, according to the CMOs themselves who responded to Deloitte’s bi-annual CMO Survey in August 2017.
And in those companies, marketing budgets tend to be larger (14.5% of the total budget) than in companies that do not assign primary responsibility for growth to marketing (10.8%).
The latest incarnation of the survey in August 2018 showed that companies in which marketing has responsibility for leading revenue growth jumped from 29% of respondents a year ago to a high water mark of 40.1%.
While this is a long way behind branding (which is led by marketing in a reassuring 91.4% of companies) it’s on the increase.
Interestingly, two-thirds of CMOs (68.6%) prefer their existing title to alternatives such as chief growth officer (5.7%) or chief revenue officer (4.6%), respondents to the February 2018 survey showed.
Growth is the new imperative for CMOs, according to Forbes. “As the custodians of the customer’s voice — as opposed to merely the ad campaign — [they] are now expected to drive business as never before.”
The US Association of National Advertisers recognised this in June when 25 CMOs from its exclusive Masters Circle formed the inaugural CMO Growth Council to discuss how brands could drive sustainable, long-term growth. Represented on the council were CMOs from Mastercard, Unilever and Johnson & Johnson, to name a few.
“Growth is what everybody talks about, but few truly achieve the way we need to do on a sustainable long-term basis,” said president and CEO of the ANA Bob Liodice.
“About half of the companies listed on Fortune 500 have declining revenues or declining after-tax profits. That’s a reflection on marketing as an industry—a reflection and a call to action that we have to do substantially better.”
The CMOs will focus on key areas like technology and data, talent, brand building and innovation, customer centricity, social responsibility and environmental sustainability.
“It’s very tempting to focus on short-term growth, but if you only focus on short-term growth you will wake up with a bad hangover and no brand left,” said LVMH global brand officer Mathilde Delhoume.
Data is driving marketing’s ability to identify growth opportunities and deliver revenue growth, according to a recent survey of 1000 marketers, conducted by global media agency Dentsu Aegis.
It found marketing investment is on an upward curve, as marketing’s role as the primary ‘growth antenna’ for organisations is strengthened by the use of data.
Almost two-thirds (64%) of respondents said delivering business growth was the primary role of the marketing function within their organisation, well ahead of ensuring effective brand management (53%) and developing the overall customer experience (52%).
Securing long-term customer relationships was nominated by 70% as the best way marketing could support business growth, followed by driving revenue growth (63%) and enhancing margin growth (59%).
CMOs are in a “unique position to turn consumer insight into the next commercial opportunity and new sources of revenue”, according to the study, titled How Brands Win in the Digital Economy, with using data to target real people rather than proxies seen as the top strategic opportunity.
“Data is central to creating deeper customer relationships and understanding, and the most successful marketers have recognised that the key to strategic business growth is in their hands,” Dentsu Aegis chief strategy officer Nigel Morris said. “This has the potential to transform marketing’s role as the architect of a business’s long-term vision.”
You know when the big consultancies enter a space, there’s something going on. Not only have the likes of KPMG, Deloitte, Accenture and PwC been snapping up creative agencies and hiring senior marketers in recent years, they have launched or extended their marketing advisory practices.
PwC Australia has taken the growth issue facing CMOs seriously, launching a CMO Growth Agenda program to help marketing bosses build their business clout.
Mark Reinke, former Chief Customer Experience Officer of Suncorp and a recent addition to the PwC CMO Advisory Board, said the program was designed to help marketers to bring the deep quantitative analysis and robust valuation assumptions companies traditionally apply to their merger and acquisition programs to organic growth alternatives. “This program will provide the tools and capabilities for marketers to identify, value and mobilise internally to deliver organic growth.”
With modules contributed by Melbourne Business School and The Marketing Academy, along with international speakers and PwC’s own experts, the program kicked off in August.
Ineffective CMOs risk having their role replaced by the chief growth officer, according to Forrester, which cites the need of CEOs to install executives with broader remits who can be a force for change during times of slower economic growth. Fortune 100 companies including Coca-Cola, Hershey’s and Kellogg have already gone down that road.
Forrester suggests it’s a trend CMOs can only alleviate by leading strategic growth initiatives themselves.
“Growth defines this 2018 narrative, and not just business-as-usual growth; CEOs expect disruptive growth,” says Forrester’s vice-president, research director Keith Johnston.
“In 2018, we expect CMOs to fall under even more pressure to drive growth — or step aside while someone else takes the reins.”
A 2018 study from the CMO Council and Deloitte titled CMOs and the Spark to Drive Growth found the next evolution of the CMO would shift from brand-builder and experience-orchestrator into a driver of “long-term sustainable growth by introducing new points of distribution and identifying opportunities for expansion and acquisition”.
The study found that 18% of CMOs already felt they were “extremely poised to succeed” as the growth leader within their organisation.
But further analysis of this group of marketers found they behaved differently from other CMOs, prioritising the longer-term pursuit of sustainable revenue growth ahead of short-term or campaign-based growth initiatives.
“These CMOs commonly seek to shape the landscape ahead by identifying new product strategies, global market expansion, M&A viability and other opportunities,” it found.
“They also seek to improve operational effectiveness and efficiency to better manage costs and maximise margins for profitability.”