Some good news for marketing heads: Chief marketing officers are holding on to their jobs longer. Spencer Stuart's annual survey of CMO tenure at the 100 most advertised brands in the U.S. reveals average time on the job has risen to 28.4 months from 26.8 months in 2007 and 23.2 months in 2006.
The popular interpretation of those data is that CMOs are aligning better with CEOs. The latter are no longer expecting instant rainmaking, and the former have learned to be humble. CMOs have learned not to pontificate about brand values before researching the issue, and they no longer fire the incumbent advertising agency the day after being appointed. The best CMOs stay low-key and aim to make the CEO, whose background often is not in marketing, comfortable becoming the chief cheerleader for the brand.
The recession has, perhaps surprisingly, elevated the CMO's standing. It hasn't always been this way, to be sure. So how can CMOs solidify this standing with the chief? Here are the four top marketing issues on which today's CEOs are looking to their CMOs for guidance.
1. Shifting consumer behavior. The recession has induced dramatic changes in consumer attitudes and behaviors in many categories. Companies need updated consumer research and revised approaches to customer segmentation. The CEO needs a CMO who understands the company's brands and consumers -- and their comparative profitability -- to recommend needed changes in customer targeting and brand messaging.
2. Price positioning. An economic downturn invariably increases customer price sensitivity. Marketers need to hit key retail price points; emphasize lower-cost, stripped-down or downsized versions of their products; and revamp their promotion calendars to maximize price competitiveness at the point of sale. While price and perceived value inevitably become more important to consumers, marketers still must emphasize the core benefits of the brand. On these matters, collaboration between the CMO and the chief financial officer is critical.
3. Stretching marketing dollars. Recession demands that marketers come up with creative ways of doing more with less. Dollars might be shifted from TV to cheaper radio advertising if it's important to maintain message frequency. Different versions of the same ad might be used in different countries rather than separate commercials being produced for each. An experienced CMO will know how to take a scalpel rather than a sledgehammer to the marketing budget.
|ABOUT THE AUTHOR|
John Quelch is senior associate dean and Lincoln Filene Professor of Business Administration at Harvard Business School. He's also a non-executive director of WPP. He blogs at quelchblog.com.
4. Embracing digital. Rather than avoid online advertising, now may be the time for many companies to experiment further and allocate more of their budgets to search advertising, banner advertising or motivating user-generated content through a branded website. Only the CMO has the expertise in the C-suite to recommend how to proceed.
The best CMOs have both left-brain and right-brain proficiency. They must have both the analytical ability needed to focus on return for their spending but also the creativity needed to position their brands in ways that are truly distinctive. In a recession, both skill sets are still needed, but the first becomes more important.
The recession will have two critical, lasting results for CMOs:
First, financial accountability of marketing is here to stay. Only in a few high-margin, fashion-intensive categories will the shoot-from-the-hip, right-brain marketer survive.
Second, improved accountability requires CMOs to be financially literate, to understand the balance-sheet as well as the income-statement effects of marketing initiatives. The result will be a new generation of CMOs who command more respect in the C-suite and hold their jobs longer.