CMO year-end check-in—execs discuss Gen Zalpha, the economy, in-house agencies and the Twitter ‘hellscape’

As the economy slides toward a potential recession and the effects of the pandemic on the workplace continue to play out, the roles of marketing leaders are rapidly changing. Ad Age Next: CMO, held Dec. 7 in New York, offered attendees lessons on how brand leaders should plan for the new year. Below, eight takeaways from the event, which featured leaders from Nissan, JPMorgan Chase, Kraft Heinz, Macy's, the Los Angeles Clippers and other major brands. There’s economic anxiety despite steady consumer spending A darkening economic outlook is forcing brands and marketers to be sure customers get value for the money they spend, but the good news is consumers are still spending even as worry over the economy rises. Carla Hassan, chief marketing officer of JPMorgan Chase, said shoppers are spending 10% more than they were a year ago and 40% more than they were pre-pandemic as savings accrued during COVID-19 are going toward pricey travel and entertainment experiences. Those same consumers, however, have begun worrying about the economy a lot more than they were a year ago. Panelists John MacDonald, CMO of food retailer FreshDirect, and Victoria Vaynberg, CMO of wedding company Zola, had similar messages: 2022 was the “biggest wedding year ever,” for Zola, said Vaynberg, adding that the splurge on weddings mirrored that in the travel and experience economy. MacDonald said FreshDirect would work hard to keep its food and delivery costs low but acknowledged that its customers reason: “I may be able to spend a little bit more if you ease my life a little bit, ... [and] if I get the best quality food you promised I’d get.” Here come the Zalphas Generation Alpha (those born after 2010) are much like their older Gen Z siblings only “on steroids,” said Kristin Patrick, executive VP and CMO of Claire’s. “They are idealistic about the world. They cheer for diversity and demand it. They question their gender ... They’re highly creative. They’re entrepreneurial. They were born into a world where Alexa always existed so they demand you move from analog to not just digital, but ‘phygital,’” Patrick said. Marketing to Generations Z and Alpha—aka Zalphas—is challenging brands to pay close attention to their distinct behavior online while finding a way to talk to the parents who ultimately buy for them. “Our email file and loyalty program are mostly parents so we would never use Gen Z slang in a subject line,” said Jacee Scoular, senior director of brand marketing and communications at Hollister Co., Gilly Hicks and Social Tourist. “But on our social, we’re a much different brand. We have a youthful voice, memes that crush it, content that is super raw and unfiltered, designed by a 21-year-old on her phone that’s destroying engagement rates.” Retail media networks will keep on growing The $100 billion retail media network business is expected to keep growing as marketers reassess their budgets in the face of the worsening economy and seek more performance-related channels, said Megan Cameron, VP of monetization for new stream media at Merkle. Others said there is more progress to be made to bring ads to life in stores. Kristi Argyilan, senior VP of retail media at Albertsons, said the grocer was seeking ways to market to in-store shoppers without interfering with fresh food displays that sell the store experience. Panelists also agreed that with dozens of retail networks from specialty stores to giants like Amazon, more standardization would benefit all parties, especially ad buyers. Ad Age's Marketers of the Year The 10 marketers that broke through in 2022 See the full list here Why brands are going in-house Efficiency is driving brands to establish in-house agencies, but the advantages are more than financial, representatives of three companies that moved at least some creative work in-house said. “The Kitchen was created to drive a creative culture at Kraft Heinz from within,” said Kelly Roe, head of creative for The Kitchen, Kraft Heinz Co.’s in-house agency. “Efficiency is one part of it [but] I would argue you can be efficient and super creative.” The Kitchen is creating three times the content at about one-third of the cost of an outside agency, and takes pride in its speed. “When there’s a trend in culture you have to act fast,” Roe said.Related: Kraft Heinz chief growth officer on in-house agencies Mike Frease, head of creative North America for Whirlpool Corp., said an in-house shop helps the appliance maker put “creativity at the core of the business,” and feels his shop gives nothing away to agencies: “We have to be shining some trophies in order to compete with the Wiedens of the world.” Devastated by the pandemic and its effect on travel, TripAdvisor has rebounded behind an in-house agency that has collected support beyond the usual hotels and flights, exposing its 450,000 monthly visitors to consumer packaged goods brands, financial services, and alcohol beverage companies, among others. “There are a lot of touchpoints to hit that consumer when they’re going to spend a lot of money [on travel]," said Christine Maguire, TripAdvisor's VP and general manager of global media business.Read more: TripAdvisor's in-house studio serves external clients The danger of agency Tinder Companies seeking new ad agencies too often are unprepared to do so, said two representatives of agency search firms. “It's like dating. If you pick up an app and start swiping aimlessly and don’t make any decisions, you’re not going to get a great match,” said Lindsey Slaby, founder of Sunday Dinner. Slaby said she typically spends four to eight weeks with a company to be certain it understands itself before courting agencies, at which point agency reviews can move rapidly. Joanne Davis, president, Joanne Davis Consulting, agreed. “If the problem is at home, a new agency is never going to solve it.” Twitter is a ‘hellscape’ Michael Kassan, CEO of the strategic advisory firm MediaLink did not mince words when asked about Elon Musk’s Twitter: “I feel like Twitter today is like driving by a traffic accident and we all shudder to think that we stop to look, but we do. ... Brand safety matters. I don’t think you could tell someone brand safety is going to be observed in the hellscape that is Twitter. It's a traffic accident.” Kassan also addressed the creator economy, saying celebrities and creators in ads are seeking more than a paycheck today. “Every major talent today expects to have their own brand of tequila, and their own brand of clothing,” he said, as stars seek to not only be the creator but own the IP. “Brands are looking at it similarly, saying, ‘We don’t want you just to be an endorser, we want you to be a part of the creative.’” A ‘bonkers’ market for CMOs The chief marketing officer’s role has become more complicated and shorter-lived as the pandemic and its effect on work created a “bonkers” market for talent that could slow down with the economy in 2023, said Richard Sanderson, consultant and marketing, sales and communication practice leader at the executive recruiting firm Spencer Stuart. Around 30% of chief marketer positions since the pandemic have come with an “and” said Lisa Mann, managing director and CMO of Raines International: “It could be chief growth and marketing; chief digital and marketing; chief brand and marketing; chief revenue and marketing ... it’s really about the reshuffling of competencies and experiences.” Cynthia Soledad, co-lead of the global diversity, equity and inclusion practice at Egon Zehnder, said that the broad scope and many sub-disciplines required of today’s marketers require they become good at building teams that can provide specific expertise and teach others. Tim Tebow, Nissan tackle NFTs “An NFT can be a doorway that when you open up, it can be a whole new world,” said former Heisman Trophy winner Tim Tebow, describing his explorations into NFTs through a company called Campus that helps athletes connect to their fanbases. Tebow stars in Nissan's long-running Heisman House" college football campaign, which this season has featured NFTs. Allyson Witherspoon, VP and CMO at Nissan U.S., said she was skeptical of NFTs as marketing tools. “I wasn't quite sure if bidding on a digital piece of artwork of a car ... was really serving a purpose for consumers,” she said, but a discussion with Tebow helped to change her mind. “The way he explained it was not using this as a piece of digital art but more about unlocking experiences on Campus. That for me was the intersection of how we could plug into that as a brand that is actively involved in college sports.”

CMO year-end check-in—execs discuss Gen Zalpha, the economy, in-house agencies and the Twitter ‘hellscape’

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