The increased pressure that CEOs are under [in addition to sales, they now face transparency, driving innovation and staying relevant to the consumer] is best demonstrated by the large percentage leaving after relatively short tenures. Of the announcements made so far this year, with tenure data revealed, 28 percent of CEO's were on the job for fewer than three years.
No less striking is the amount of change occurring in companies who are taking a traditionally decentralized marketing structure and centralizing it through the announcement of a new CMO. September alone saw over 14 announcements made in new hires or newly created positions and almost every day there seems to be another.
According to a study by Spencer Stuart [which was reported in Ad Age in June of this year] the average tenure at a company has dropped and is now only 23.2 months long. That's a relatively short time to effect change in the organization. Just as they are getting settled into the new role and understand the business, the pressure is on. And it's usually the CEO who's doing it.
History in this business has taught me a few things.
When a new corporate CMO arrives the current agency is busy for three or four months educating him/her on all the work and thinking that has been done to date. This is probably the most vulnerable time for any agency and if they aren't fired immediately [which happens more often than you think], the CMO is looking to effect change as rapidly as possible and more often than not, this means a change in ad strategy or ad teams. And even though advertising is less and less important in the overall marketing mix [after all CMO's are increasingly responsible for pr, online, events and internal communications, etc.], it is also the most visible part of their job. [i.e., easy to change.]
Our job as small agencies will be to increasingly align ourselves with the vision of the company and gain a deeper understanding to the entire 'C-suite' goals, mission and imperatives. An 'extension of the marketing team' if you will. In return, CMO's desperate to make a good impression will increasingly rely on us to bring new ideas, insights and ways of reaching their core consumer to the table.
I'm sure many of you have been witness to one direct result of the slowly declining CMO reign. This year, like no other, there has been a huge pressure for agencies to measure and be held accountable for hard-core results and return-on-investment. [How many of you have seen a drastic increase in 'agency criteria' in your agency's new business RFP's?]
I'd like to believe that our understanding of our clients' business, delivers something beyond the financial aspects of ROI. It's been called different things, but I tend to call it a greater return-on-value [ROV], the tangible and intangible aspects which measure a company's value to its consumers which creates sustainable profitability in the long-run. Some have said ROV is even more important than measuring ROI.
The true questions we need to ask ourselves [and educate CMO's about] is to think beyond the dollar value and 'here and now' of the marketing role. In some ways they need to measure the functionality of the creative idea. Does it align with the business strategy? Where is the added value [to the brand or consumer]? Does it drive greater earned media attention and word-of-mouth? Will it earn consumer loyalty and greater appeal? Do people engage with the brand? Will the idea drive brand equity [for the long-term]? Can our corporate culture / employees embrace this idea?
In return, CMO's can better articulate to senior management the business value of any proposed project, product or services investment that we as agencies are producing.
And hopefully, that means a very happy and fruitful long-term relationship for all of us.