CMOs must mimic CEOs

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Issues of performance measurement and media effectiveness continue to bedevil advertisers, according to chief marketing officers who spoke on an Advertising Age panel at Advertising Week in New York City.

The economic recovery is still tenuous enough to make budgeting a challenge for marketers, said the panel, which included Paul Guyardo, Kmart's senior VP-chief marketing officer; Jim McDowell, VP-marketing at BMW of North America; Joseph Perello, New York City chief marketing officer and president of the New York City Marketing Development Corp.; and James Speros, U.S. chief marketing officer for Ernst & Young.

"The market will be cautious" in this climate, Mr. Speros said. While spending in some advertising categories such as the Internet will continue to grow, many marketers may hold the line in other media, he said.

The panelists agreed that in this environment, chief executives are increasingly concentrating on measuring return on their marketing investments. Doing the same can save a chief marketing officer's job, they noted.

armed and ready

"That way, when they're coming at you, you're armed with the facts," Mr. Speros said, adding that chief marketing officers tend to use "proxies" such as brand awareness and purchase intent to measure their success, while CEOs are focused on tangible results such as sales numbers.

"We have to learn the language of the CEO," said Mr. Speros, who is also chairman of the Association of National Advertisers.

The focus on results is causing changes in the media mix, the panelists said. Cheaper, more-targeted media are rising in importance.

Mr. Guyardo noted that Kmart plans to launch a charge card partly to build a database of its customers. The discount retailer is also partnering with research groups to analyze its customer base and figure out key sub-segments to target. Additionally, Kmart is looking to ramp up its in-store marketing, "a huge marketing opportunity," Mr. Guyardo said.

While most panelists said their use of TV is changing, no one would pronounce the demise of the 30-second TV commercial.

"People are getting extremely good at blocking" ads, Mr. McDowell said. That's why BMW has looked for other media that are "invited" into consumers' homes, like the groundbreaking BMW Films on the Internet, he said. BMW still does TV ads, but "we love TV that is so immediate that you're not tempted to TiVo it," he said.

Advertising on TV is not going away, Mr. Speros said. The industry has built an infrastructure worth $18 billion and "someone's going to have to pay for the programming."

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