How CMOs are balancing brand building with performance marketing pressure

The debate pitting brand building against performance marketing shows no signs of slowing down. The topic was among the issues dominating last week’s Masters of Marketing Conference, which is put on annually by the Association of National Advertisers. AI was also a major flash point at the chief marketing officer-focused event in Orlando, which drew 2,520 people to the Rosen Shingle Creek resort. Marketers argued for the value of brand building as they face increasing pressure to deliver results faster for less money. The topic was frequently mentioned on the main stage and even on ads placed around the Rosen Shingle Creek. One was a staircase ad promising “Stronger Influence” and “Elevated Performance” from RR Donnelly. Another was a digital billboard from Marketing Architecture highlighting the “Brand or Sales” debate and promising to deliver on both. Check out the latest Ad Age events and award programs To keep the conference from turning into an echo chamber of chief marketing officers all telling each other why their jobs are important as their influence dwindles, many offered tangible advice for how to sell a stingy CEO or chief financial officer on the value of advertising. Most speakers agreed that the debate between brand and performance is a false dichotomy. In an interiew with Ad Age following his presentation, Aron North, chief marketing officer of Mint Mobile, said that while the vast majority of his budget goes toward lower-funnel performance, brand building has been key for growing the company. North referenced the brand’s annual holiday card that it sends to customers, which has come out of its holiday media budget, as an example of a marketing effort with no sales driving impact whatsoever. “There’s no marketing message in it, it’s literally a holiday card and that’s it,” he said. “No coupons, no bounce back, no nothing. It’s just a feel-good moment. But you know what, that son of a bitch is visible online whenever we post it.” Ad Age Leading National Advertisers 2024 U.S. ad spending, rankings, analysis and profiles for the biggest marketers Click here Chief marketers must continue proving the success of their brand building to earn their slice of the budget, he added. While the proven success of the company has gotten him a longer leash, he still recognizes his responsibility to constantly prove his work to the rest of the C-suite. “A lot of chief marketing officers and people trying to articulate to the chief financial officer and CEO what marketing does find it easy to point to a Google ad with direct attribution,” he said. “It’s hard to do that with brand. But if you don’t build accountability and trust over time and hold yourself accountable to the numbers, how can anybody believe in what you do?” Larger competitors also recommended marketers focus on the tangible results of their brand building efforts to prove the efficacy of marketing. “You’ve got to be focused on driving outcomes,” said Kellyn Smith Kenny, chief marketing and growth officer at AT&T. “Output-oriented companies say ‘I launched a thing because a customer wanted it.’ Outcome-oriented companies say ‘I launched a thing and here’s what it did with customer satisfaction.'” Also read: How CMOs can gain more influence in the C-suite Some attendees expressed concern that there wasn’t enough talk about performance marketing, which could indicate that marketers are too focused on preaching the values of brand building to the choir. “What we’re seeing from clients is performance marketing is still leading the charge,” said Freddy Dabaghi, chief transformation officer at Crispin. “There might just be insufficiency in the content.” While brand marketers often focused on performance, media companies known primarily for delivering lower-funnel sales lifts were also going out of their way to show they could be branding vehicles. Case in point was media heavyweight Amazon Ads with a presentation focused on how marketers such as BritBox and Bissell could deliver both tangible sales results and long-term brand equity via its growing array of formats. Also read: How agencies can sell creative ideas to risk-averse clients Below, more takeaways from the week-long conference. Check out the latest Ad Age events and award programs Attendance grows and Prichard stays ANA has dealt with rising competition in the marketing industry event space—but Masters of Marketing, the ad trade organization’s biggest annual event, is still proving to be a major draw. The 2,520 in-person attendees surpassed last year’s by more than 200, though still behind the 3,000 in 2019. Another 2,145 attended virtually. Some of these businesses used the occasion to bring their teams to the Rosen Shingle Creek hotel to dovetail with company meetings, according to Nick Primola, executive VP of the ANA’s Global CMO Growth Council, which added an extra day of meetings this year and drew a record of around 300 CMOs. Some came only for the Growth Council work on Monday and Tuesday and left before the bulk of conference program the balance of the week, he said. For Clorox Co., it was the first in-person visit to the conference since 2019, and Clorox CMO Eric Schwartz said he brought a team of around a dozen marketing executives as a team-building building exercise. As some things changed—and a heavy dose of AI was one of the most notable change—some stayed the same. For example, this was supposed to be the year Procter & Gamble Co. Chief Brand Officer Marc Pritchard would pass the ANA chairmanship to Emily Callahan, chief marketing officer of Alsac, the fundraising arm of St. Jude’s. But Pritchard agreed to stay on as chair for an additional year after Callahan left her position recently. Agencies get love Agencies don’t always get a lot of credit from the Masters of Marketing stage, but this year was an exception for a couple of prominent presenters. Progressive Insurance CMO Remi Kent gave a shoutout to Arnold as the agency behind its prominent long-running campaigns featuring Dr. Rick, Flo and crew. Progressive, which also has an in-house agency, didn’t always give a much public shoutout to Arnold under prior chief marketer Jeff Charney. Also read: Progressive’s summer of Dr. Rick goes well beyond TV ads “Flo is iconic, and she and Dr. Rick are some of the best known characters in advertising,” Kent said. “While I might be a little biased, we’re really good at comedy, and that’s thanks to our strategy. But also, coupled with brilliant creatives at Arnold, sitting right there, I wanted to preserve that strength and really build upon it.” Kent, who came to Progressive three years ago, also documented how that’s been working out for the brand, which has gone from No. 3 to No. 2 in the U.S. insurance industry, increasing policies in force 28% to 33.4 million and more than doubling its stock price since she joined. Diana Haussling, Colgate-Palmolive Co. senior VP and general manager of consumer experience and growth for North America, noted the company’s long relationship with WPP. “I like to say we’ve been married to them since 1982 and we work across the WPP universe, but we also have other partners that we work with, like the Arc agency (Publicis Groupe) and Walrus (independent recently added to handle Hello). …I consider them a part of my team, and I consider myself part of their team.” Diana Haussling, Senior Vice President - General Manager, Consumer Experience & Growth at @Colgate Palmolive shares how to build brand love that will stand the test of time. #ANAMasters pic.twitter.com/m98o2teuFM— The ANA (@ANAmarketers) October 24, 2024 It wasn’t all rosy for agencies, though. Asmita Dubey, chief digital and marketing officer of L’Oreal Group, noted the company’s work with more than 60,000 influencers and creators globally. “There’s a democratization of brand building, and therefore everybody can be a brand builder, and everybody can be a creator,” Dubey said. “The work that you saw that we are doing, sometimes the work is cheaper than when we work with big agencies. So I would encourage all of you to just go there and try and test, because digital and technology is also breaking a lot of barriers for a lot of people around the world.” Human touch and home visits In a marketing conversation dominated by digital interactions and AI, some big marketers pointed to the importance of marketers actually getting out into the field for face-to-face contact and home visits with customers. Marketer home visits haven’t gotten a lot of talk in recent years at the ANA or elsewhere. During the peak of the pandemic, they largely disappeared. Even before that, marketers, including Unilever, were adopting Zoom-like global interviews that made it much easier for even senior executives to talk to consumers all over the place instantly without leaving the office. But when P&G was working on a turnaround at the turn of the millennium, home visits were a staple of how marketers at all levels of the organization stayed in touch. And in his talk at the ANA, Pritchard made clear they’re still the best source of inspiration for products and propositions. In a speech on finding growth from everyday moments, ranging from Gillette shaving ads to a Downy product to take perma-stink out of clothes, Pritchard said a chief source of inspiration is from visiting people in their homes and where they shop to observe actual behavior. “It requires human interaction to get the true essence of a moment—like the first whiff of clean, fresh laundry, the importance of a smooth shave when kissing your adorable little grandson or the little bit of worry when your clothes are ‘stuck with a funk,’” he said. “Human moments are the ones that matter.” “One thing I find so amazing about our business is that you wouldn’t think there was so much potential, but there is,” and that gets discovered most readily during in home visits, Pritchard said in an interview, citing dissatisfaction with diaper leaks and dishes still dirty after they’ve been through the dishwasher. AT&T’s Kenny recounted a similar process. “We have these connection days at AT&T, where I literally go into the field with a fiber installer,” Kenny said. “And I’ll go into people’s homes and I’ll see how they’re using the products. I see how they interact with the person installing it. I do ride-alongs. Any time I visit a market, I try to actually visit an AT&T or Cricket store. I meet with the employees, and the employees on the front line understand customers incredibly well.” Chilling effects under the sun While it was hot in Orlando, there was some lingering chilling effect from the House Judiciary Committee’s investigation into the World Federation of Advertisers and Global Alliance for Responsible Media, as well as X’s antitrust lawsuit against Unilever and GARM, which led the WFA to shut the group down. It led to concerns that marketers might become less willing to participate in industry efforts generally that could be construed as collusion. On the surface, there was no sign of a chilling effect. The ANA’s Global CMO Growth Council had record participation with around 300 CMOs, Primola said. And the group’s work spanned two days ahead of the main conference opening, a day longer than previously. But one CMO involved in the group has been told by the company’s legal team not to use the terms Diversity Equity and Inclusion or DEI in any group work, and another’s general counsel reviewed every document the CMO was involved in extensively before allowing the CMO to participate. That’s one reason “inclusion” appears to have replaced “Diversity Equity Inclusion and Belonging” (DEIB) in the ANA lexicon. In general, not only are marketers getting more cautious about anything they put in writing, they are also insisting on couching any discussions on potentially sensitive issues such as inclusion or media suitability in terms of their positive impact on business growth and the business justification for the work, this person said. The specter of Robby Starbuck, an activist leading the anti-corporate DEI charge, loomed over the conference. ANA’s SeeHer held one of the only presentations explicitly focused on driving business growth through inclusive marketing and encapsulated the overall sentiment around the acronym. “As I sit with marketers … they all share their commitment to continued efforts around activities that could be classified as DEI,” said Christine Guilfoyle, president of SeeHer, an ANA initiative that champions the positive representation of women in marketing, in an interview. “But based on the activities that have gone on and the targeting that some marketers have faced, and the impacts of that targeting on their business, they’re far more quiet about it.” Guilfoyle emphasized that she would not call SeeHer a DEI initiative, but rather a practice that allows brands to track how their marketing resonates with certain audiences and offers best practices for reaching those audiences. She said that given the pressure brands face from conservatives to abandon DEI programs, many agree they must recontextualize this work as efforts to drive business results with particular communities, which would entail distancing themselves from commonly accepted acronyms. Guilfoyle also stated that one of the brands that made headlines this summer for abandoning DEI practices continues to pay its dues as a SeeHer member, but she declined to name it for publication. “The representation and portrayal of characters in their brand messaging—they don’t see that as a DEI initiative,” she said. “They see it as a consumer connectivity campaign.” But Masters attendees such as Julia Hammond, president of Stagwell Global, said that they heard few discussions of DEI, even buried in conversations about growing a brand with particular communities. Brands lean into failure Marketers from AT&T, Colgate-Palmolive and Mint Mobile shared various ways that their companies have embraced failure—to fix it, learn from it or keep fear of it from becoming a barrier to innovation. AT&T had a major mobile service outage in February, but the response to it actually helped the brand, Kenny said from the ANA stage. “Customers were frustrated, but it’s what we did in the aftermath that really helped AT&T show up as a customer-first company, and what we did was very much grounded in the fact that we were prepared for crisis,” Kenny said. That included research into how consumers experience connectivity disruption and the language to use to reassure them. Moving quickly with cross-functional teams was important, and within a day AT&T communicated that it would issue a full daily credit even for people whose outage lasted only a few hours. “The most amazing thing,” Kenny said, was that in the first quarter not only did AT&T have the lowest customer churn in the industry, but it was also the lowest quarterly customer churn in AT&T history. “By doing the right thing, even after we stumbled, customers were more happy,” she said. It is, however, an exercise AT&T may have to repeat. Shortly after her talk, AT&T was going through another service outage in much of the U.S., though apparently less widespread. For Colgate, failure is an important part of innovation, Haussling said. Colgate’s marketing team has weekly chats that include “Wednesday Wins” but also “Friday Fails,” she said. “We keep learning behind the fails,” she said. “It realy allows us to feel comfortable with taking risk. I do think it’s even more critical for leaders to talk about their fails even more, but also allow the organization the bandwidth to fail.” That means giving teams reassurance “that they can fail and you have their back,” she said. “They’ll take more chances, but they’ll also want to walk through a wall for you.” Mint Mobile’s North highlighted the benefits of failing properly early in his career. “I say ‘look, we did this and it didn’t work. Here’s why it didn’t work, here’s what we’ve learned and here’s how we’re going to fix this,’” he said. “Once I start building that level of credibility with the CEO, it gave him the opportunity to give me a longer leash.” He also spoke of how he approached the prospect of failing when launching a phone plan for seniors above the age of 55 given the brand’s minimal engagement with that audience beforehand. “If we fail, we’re going to fail small, fail fast, fail cheap and fail forward,” he said. “We’ll learn something.”

How CMOs are balancing brand building with performance marketing pressure

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