What Facebook's low-key CMO choice says about its future
When Facebook this week announced its new chief marketing officer would be Alex Schultz, the initial response from the ad world was, “Who?” Far from the splashy hiring of the previous marketing head Antonio Lucio, this is a low-key pick from deep within Facebook’s ranks, and it suggests the company is rewarding loyalty and bucking expectations.
Facebook’s partners at agencies and brands are trying to decipher the exact meaning of placing a relatively inexperienced marketer in the top brand-building role at one of the world’s most powerful companies. A 13-year Facebook veteran, Schultz has recently served as VP of product growth, analytics and internationalization. Notably, he will keep those duties, adding the CMO title—suggesting the social network no longer believes it needs a top marketer dedicated to the role.
“It’s signaling clearly a change in strategy,” says Rishad Tobaccowala, author and former chief growth officer of Publicis Groupe. “Antonio was a man of great stature in the industry. He was one of the best marketers ever.”
Instead of a rock-star marketer thinking about Super Bowl commercials, Schultz is by his own admission a direct-response marketing nerd. On his LinkedIn page he brags that, as a teen, “growing my websites via SEO and then analyzing the traffic was my hobby. I ended up doing affiliate marketing and paid search arbitrage too to help pay for things.” He also describes himself as “really proud to be openly gay at work and in my personal life and to have a successful career at a couple of big name internet companies”—an apparent reference to a previous stint at eBay, where he was a marketing manager for three years, according to his LinkedIn.
Schultz is comfortable parsing data and analyzing customer segments for targeted advertising. “My background is direct response online marketing and analytics. I did that as a hobby at high school, helped pay for college with it,” Schultz said when he announced his CMO ascension in a Facebook post on Wednesday.
Facebook declined to comment on what the hire means for its marketing strategy. But with Schultz, the social network seems to have departed from the desired qualifications it laid out in its “help wanted” ad when it announced the CMO search back in August. Facebook said the right candidate would have at least five years experience at the CMO level at a major technology organization. Schultz has spent more than a decade at a lower level than that at Facebook.
Job for Superman
With the CMO title, he will be widely watched, and there are some in the advertising world who question whether he’s up to it. “Going from a world class, highly respected CMO, who is a sought-after public speaker, to an insider without strong marketing acumen is a little searing,” says one marketing executive at a major brand, who spoke on the condition of anonymity. “Alex may be a great marketer, but it's unlikely that anyone would be ready to jump into the head of marketing role without prior experience leading a marketing operation. Superman couldn't do that.”
Lucio joined Facebook in 2018 and was supposed to be the answer to Facebook’s image breakdown, after the company irresponsibly handled consumer data, which was revealed by the Cambridge Analytica affair. Facebook was also reeling from bad will among advertisers after a series of mistakes in reporting data to marketers. In one case, in 2016, a metrics glitch overstated the popularity of videos as a format on the social network, sending the company into a period of damage-control with brand partners that were demanding more transparency.
Lucio stepped into the role after holding high-profile roles at PepsiCo, Visa and HP. He was popular on the speaker circuit, including at the Association of National Advertisers' biggest show, the annual “Masters of Marketing” conference. At Facebook he led a rebranding project that unified Facebook’s properties into one “family of apps.” And his Facebook tenure culminated in a Super Bowl commercial this year, starring Sylvester Stallone and Chris Rock.
Facebook seemed poised to emerge from the period of mistrust. Earlier this year, the COVID-19 pandemic gave the company a moment to demonstrate its values. Facebook relished its new role as an essential service, connecting people isolated in quarantine and becoming a lifeline for businesses forced to operate online. But then the social network was cast into its deepest public relations crisis ever. In June, worldwide civil rights protests led to new scrutiny over Facebook’s role in the public conversation, and critics called out the prevalence of disinformation and hate speech on the platform. In July, advertisers joined Stop Hate for Profit, a boycott that called for a month-long advertising freeze.
Lucio stepped down amid that turmoil, saying he wanted to focus on promoting diversity and inclusion in the advertising world. And now Schultz steps in.
The selection suggests Facebook is looking for a reduced profile in its top marketing spot, says Noah Mallin, chief brand strategist at IMGN Media. “It may be more that they are reframing what they need and a big name, brand-centric CMO isn't that,” Mallin says. “It's a funny background to me. The fact that he's still got one foot in the old job says that they see the biggest challenge as continuing growth, user acquisition, downloads, retention of users, rather than brand marketing.”
Tobaccowala suggests marketing—and raising awareness—is not Facebook’s problem. “They are beginning to understand that their issue is not telling people about Facebook, it’s about changing Facebook,” he says. “You are trying to tell people you have to change your perception of Facebook, which I think is much more of a policy or a product thing than an advertising thing,” he adds. “And that probably is better done by someone who is either a product person, a policy person or a PR person.”
CMO of the future
Liz Miller, VP and principal analyst at Constellation Research and a former senior VP of marketing and operations at The CMO Council, says that Schultz is an off-beat choice, but perhaps that’s good. “The future of the CMO role includes someone with experience in both direct-response marketing and a deep interest in robust analytics,” Miller says. “That absolutely should be on the checklist.”
Schultz will face challenges growing the Facebook brand at a time when there is significant competition for the next-generation of social media users, flocking to rivals like YouTube, TikTok and Snapchat, Miller says. Facebook has a marketing budget that exceeds $500 million a year. Schultz's instincts could be to grow the brand through the same tactics that Facebook sells to its own advertisers—sophisticated targeting backed by advanced analytics that lead to more downloads and more engagement with Facebook, Instagram, WhatsApp and Messenger.
Lisa Mann, a former packaged goods marketer and CMO, and managing director of executive search firm Raines International, suggests that with the hire, Facebook is saying, "we are going to do the hard work of doing well as opposed to creating an emotional Super Bowl spot."
Schultz's challenges will include restoring relationships with Madison Avenue. “At this time, Facebook has a lot more questions coming from marketers, and coming from their customers, than they’re getting answers for,” Miller says. “Advertisers are willing to give him a chance,” Miller says. “But that willingness is not going be long-term, open pass.”
In his post announcing his new job, Schultz highlighted his history in internet advertising, and his past four years working on safety and community standards at Facebook. That’s an important area because advertisers want more transparency. Facebook has committed to implementing new controls and reporting that give brands more insights about the environment in which their ads run.
“I’m excited for Alex and it seems as though he’s been an integral part of Facebook for some time now,” says Azim Akhtar, head of marketing at Reese Canada for Hershey Co. “In my opinion, Facebook needs a leader who can navigate all of the concerns that have been mentioned throughout the last few months, who can align the organization as well as set a clear vision for what Facebook needs to be in the future.”