The Evolving Role of the Marketing Agency

[:en]2015_06_f2By Patrick Boulard, Managing Partner, Axellium and COO, Internet Marketing Association

The evolving role of the agency has been a topic of discussion for some time as the marketing function continues to grow in strategic importance, and the complexities associated with planning, executing and analyzing marketing initiatives keep increasing.

We asked IMA Members and Partners to share with us some of their views on the roles and responsibilities that agencies are or should be playing. The answers are in the report.

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CEOs Who ‘Get’ Marketing A Boon To CMO And The Business

[:en]2015_06_f1By Mercedes M. Cardona, Contributing Writer CMO.com

CMOs drive business results, and so do CEOs who “get” marketing. The “CMO Impact Study,” now in its second year, shows a relationship between better business outcomes and companies with stable, marketing-focused leadership. It also challenges the conventional wisdom that data-driven marketing leaders reign.

Companies in which CMOs have longer tenures and access to their CEOs and C-suite tend to have higher market share, according to the new study (executive summary, PDF), authored by Kimberly A. Whitler, an assistant professor of marketing at the University of Virginia’s Darden School of Business, in conjunction with CMO.com. Longer tenures and C-level access are likely the markers of a firm that is committed to marketing, which, in turn, is a factor in its success, she said.

“The objective of this research was to understand how and when CMOs have an impact,” said Whitler, a former CMO who also writes CMO.com’s monthly “CMO Matters” blog. “They don’t work in a vacuum. They are affected by the person who hires them, who reviews them, and who determines corporate strategy.”

The “2015 CMO Impact Study” is a follow-up to a report released early last year, which proved that CMOs drive business value. This year’s study compared the CMO functions in the companies with the best marketing capabilities (in the top third of all firms) versus the CMO roles among the companies in the bottom third to examine how the differences contributed to different marketing outcomes and business results.

The new report surveyed 564 business executives, including 223 chief marketing officers or the equivalent, and mostly from U.S.-based firms. It found a correlation between companies in which CMOs have a higher profile and are more involved in overall strategy and firm success. On average, the companies with better marketing showed a two-thirds higher market share. The relationship between the CMO’s status and market share relates to the value of prioritizing marketing, Whitler said.

“Those firms that are better at converting resources into marketing capabilities are better at growing market share,” Whitler said. “Last year’s study demonstrated that CMOs matter. This year’s study shows that in addition to CMOs mattering, firms that commit to marketing tend to be better at it, which is related to better business results.”

Marketing, A Core Competence

Among results of the study, Whitler said “one of the ahas” concerned marketers’ influence on company strategy. While it’s not surprising that CEOs who prioritize marketing show better business outcomes, those who invite CMOs to strategy meetings also showed better results, Whitler explained.

Being involved in senior management is very important for marketers, said Eric Eden, senior vice president of marketing at technology firm Cvent. Sales, technology, marketing, finance, and product teams all have different ways of looking issues, and “success comes at the intersection of a healthy debate across these perspectives,” he explained to CMO.com.

That involvement in strategic discussions and decision making is a signal of the company’s commitment to marketing, Whitler added.

“All of this falls under a basic question that scholars and firm leaders have been asking: How do firms develop a competitive advantage through stronger marketing capability?” she said. “When the CMO is included at the strategic level in the firm, what you’re saying is, ‘We value and prioritize marketing and believe that marketing can contribute to business results.'”

Barbara Goose, CMO of real-estate technology company Altisource, agreed. “Marketing is a core competence, not merely a support function,” she told CMO.com. “The CEO should need input from the CMO daily.”

The study also shows that companies where both CEOs and CMOs have longer tenures tended to have better business results. The firms with higher marketing capability (and better results) have CEOs with 35% longer tenures and CMOs with 15% longer tenure than at the laggards.

“There’s a story here about continuity,” Whitler said. She noted that “much research has been written about short CMO tenure. This research, however, also found a CEO’s tenure correlates to marketing capability and results. It’s difficult to develop an embedded marketing organization if the leadership keeps changing over time, so the longer the CEO’s tenure, the better the firm’s marketing capability tends to be.
“What that means is continuity matters. The cost of a revolving door in marketing is significant,” Whitler said.

Eden noted that after 10 years in senior management at Cvent, he knows a long tenure is an advantage. Marketers can get to know their industries, partners, vendors, and customers really well; initiatives can be tested and investments leveraged better over time, he said.

“My experience is that a lot of initiatives take years to put in place, so tenure is important. It can make a big economic difference in profit and growth. Over time you can learn what really works and optimize,” he said.

The background of both CEOs and CMOs before their current assignments also appeared to have an impact. The research found that CEOs who came up from the marketing side (a more frequent phenomenon in recent years) are more often found leading the better-performing companies. Conversely, the lower performers are more likely led by CEOs who moved up the manufacturing or operations ranks.

“CEOs who have a stronger marketing and/or sales experience are more likely to work in companies with better marketing capability,” Whitler said. That shouldn’t be surprising, she said, since those companies tend to prioritize marketing.

Peter McGuinness, chief marketing and brand officer of Chobani, noted he has the advantage of working for a CEO, Hamdi Ulukaya, who is also the company’s founder and has a passion for the brand. McGuinness often tells the story of how Ulukaya was willing to invest in a factory when others advised him against launching a Greek yogurt in the U.S. market. The gamble, of course, paid off.

“He’s very passionate about it, and he’s very participatory about that, as he should. He’s the founder,” McGuinness told CMO.com. “I know the brand really well. He knows it extremely well. We work in collaboration, and we’re pretty consistent in terms of how we see things.”

Chemistry Matters

The study’s findings suggest a few questions a CMO should be asking in order to gauge marketing’s place in the firm, Whitler said.

“How committed is the CEO to developing marketing in the firm? Are they going to invite you to key strategy meetings? How often do they meet with their CMO? Who do they include in weekly leadership meetings?” she asked.

“Chemistry matters. High-functioning relationships are built in time,” Goose added. “Trust drives growth. When a CEO knows their CMO will succeed, there is more freedom and stronger results.”

The CMO’s background also has an effect, according to the study’s findings. Whitler noted that more analytics-driven CMOs were more likely to work at firms with lower marketing capability. That actually runs counter to the current CEO focus on finding marketers with a strong analytics grounding: The study shows it takes both a data and creativity focus are required, she said.

“This result was frankly surprising. I expected that the more analytical marketers would be associated with the strongest marketing firms,” she said. “However, after considering the results, it actually makes sense. Balanced or hybrid CMOs–those with both analytical and creative skills–are more often found in firms with stronger marketing. Why? The analytical skills help CMOs understand what to do, but the creative skills help CMOs use that insight to change consumer beliefs and behaviors. Both are critical and, unfortunately, right now we tend to be overweighting the analytical side and devaluing the creative side.”

CMOs are transitioning from being creative brand gurus to more business-focused executives, said Lisa Arthur, CMO of Teradata. This is leading to the emergence of more marketing chiefs who are stronger in analytics but lack the brand experience to drive more effective marketing, she said.

“The key—and the study does a great job of highlighting this—is data alone is not enough,” Arthur told CMO.com. CMOs need to be more well-rounded, combining marketing and creative expertise along with an insightful, data-driven approach to engaging consumers, she explained.

“As the study cites, CMOs need to have balance and exhibit an appetite and skill in being data-driven, leveraging insights that are granular and trend-spotting, along with being creative and expressing the brand to drive growth,” Arthur said.

“That’s the ‘aha’ here. Most CEOs want somebody very quantitative,” Whitler said. But she warned against focusing on that aspect too much.

“In the case of marketing, you can’t be right- or left-brained. You have to have a blend of both creative and analytics skills,” she said.

Click to view or download the “2015 CMO Impact Study” infographic (designed by Uberflip).

An executive summary version (PDF) of the “CMO Impact Study” is available here.

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24 Hours of Observation

[:en]By Jeanniey Mullen, VP Marketing, NOOK by Barnes & Noble

Whenever I take my kids to an amusement park my mom and aunt love to go with me. They never ride anything. Instead, they just like to stroll along, sit and people watch. I have some friends who love to go to the beach and do the same thing. And, in 3rd grade, I had a teacher who used to make us repeat this crazy rhyme (yep, it was Catholic school):

“The wise old owl sat on an oak,
The more she heard the less she spoke
The less she spoke, the more she heard
Why can’t we all be like that bird?”This week, while I was traveling for business I thought it would be a good time to take a hint from my friends and family and put my people watching skills to the test. I wanted to act like that wise old owl. My hope that that I would walk away with insights on how to better connect with the customer when creating marketing plans. What I can say is that it was quite a 24 hours. Never had I been so quiet, and never had I taken away so much insight to apply to my efforts. Here are the top 3 takeaways:

1) Observation: People really DO follow the crowd in real-life situations.

At the airport we received a text that our departure would be delayed by 30 minutes. Yet, when 2 people (who must not have received that message) stood up under the “Group 1” sign at the normal boarding time I watch almost the entire rest of the waiting area get up and get in line. For what? It was a good 30 minutes before we were going anywhere. When I asked people why they were in line, not one person could give me a justifiable answer.

Take away: Find real-life brand ambassadors and influencers to drive crowds.

2) Observation: The art of customer service has been lost to the art of cost-cutting.

On the plane the wifi wasn’t working- for a few people. After multiple people called the flight attendant, instead of helping them troubleshoot she made the comment “Look you saved $12.99 be happy.”

Take away: A brand needs to define what the customer interaction goal is: Efficiency or Experience. It doesn’t appear there is room for both.

3) Observation: Innovation is everlasting!

At the hotel I saw a show on sushi-boat companies who have redesigned their circular displays to be more cost-effective, yet serve more people. I was blown away with the simple innovations applied to these businesses and the big difference they made, including a slot at the table where you could slide your dirty dish to make room for more sushi!

Take away: Sometimes, it’s the simple things that make a big difference. Fund innovation.

They may seem simplistic and basic, but these three items can make the difference in your organization and brand success.

What do you think?

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Paving The Way for Wearables

[:en]By Sibel Gray, Wearables Lead, Internet Marketing Association

This winter I embarked on a journey to get in shape. Along the way, I developed a dependency on fitness trackers to gain insight and evaluate my training routines and check my progress. The data gathered by these activity trackers was eye-opening, and the realization that this is only the beginning was even more staggering.

For me its just health and fitness data. For brands wearables will pave the way to covetable information. The digital communities and data created by a single device banded to our bodies are kind of scary and give us a glimpse of the future we face.

By 2018, the wearable market is estimated to be worth 12.6 billion U.S. dollars according to Statista. Approximately 40% of individuals who participated in the survey indicated their interest in these technologies, with 48% revealing they would use it for health and fitness purposes. The global wearable technologies market is forecasted to grow to around 134 million units, and wearable device market to grow around 6 billion U.S. dollars by 2018. These statistics are an indication of an industry that is on the verge of exploding.

These cutting edge technologies go beyond smart watches and fitness trackers. They include high-tech clothing, glasses, contact lenses, fashion accessories such as rings, earrings, bracelets, head-bands, bags etc. They can either be worn on the body, or even ingested (e.g. smart pill technology). These embedded mini computers essentially have the capability from measuring heart rate, movement, breathing patterns, activity tracking, and analyzing sleep patterns to remote monitoring patients and diagnostic imaging.

Most products out on the market are still in their infancy. However, they will get smarter, and capable of logging a lot more data. Wearables will become more sophisticated, and will continue to gather valuable data pertaining to our health and fitness history, our buying behaviors, emotional state and moods. These biometrics will provide further insight, and analytics for marketers and advertisers that have been absent before.

Brands will be able to gauge emotional reactions to products and services in real-time, allowing them to improve their marketing plans from just targeting customers based on geo-location. The mined data will also create opportunities for brands to engage customers in unique ways, such as forming personal relationships with them based on their physical and emotional feedbacks.

Ultimately, marketers are going to have to personalize experiences for the end user, and provide justifiable benefits if they are going to target advertisements and market products based on and individual’s habits and lifestyles. In addition, marketers will need to demonstrate sensitivity to valid privacy and security concerns raised for wearables. Balancing public mistrust and worry against profitable insight is going to be a thin line to walk.

After trying various wearables, I now realize the way we connect online, our interactions – including our online social habits – will evolve. Wearables can inspire us to live healthier and motivate us to reach our personal goals. However, the devices themselves will need to mature in style and functionality. Rather than providing raw data for health metrics these devices will need to deliver actionable insight to make them worth wearing first.

Read this article online here: http://bit.ly/imasp15

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The Human Side of Autonomous Marketing

[:en]By Jeff Marcoux, Board Member, Internet Marketing Association

How do you retain the creative side of marketing when big data and autonomous marketing inevitably change the way marketers work? Data insights enhance the efficacy of your marketing efforts; however, human input is always necessary to decipher big data. Autonomous marketing, used to enable marketers and nail down effective marketing campaigns, is the secret to realizing business impact.

Metrics for the Mind

The application of autonomous marketing is a necessary next step in meeting a new demand, but it doesn’t supplant the need for marketers in the flesh. According to Jeff Marcoux, Senior Product Marketing Manager for Microsoft Dynamics CRM, marketers will never be forced to relinquish their instincts and creativity—their marketing guts—because analytics, data, and insight help fuel creativity.

“The main reason I say that,” said Marcoux, “is because there’s always going to be new channels and marketers have to come up with new ways to use them.” Take for example the exodus of college-age students from Facebook (which Marcoux attributes to the fact that their parents on are on it) to something more like Snapchat. Although data may shed some insight on the shift, it’s up to marketers to take advantage of it in a creative way (e.g., showing loyal fans a secret menu or product announcement before the rest of the world gets to see it).

Take Colorado University’s Online program at their Anschutz Medical Campus, which faced the challenge of how to remain competitive to college students and reach potential students on their own terms. CU used Microsoft Dynamics CRM to identify what their potential students liked, the media they consumed, and the social networks they used—processes that would normally take marketers months of research—and automated it so their marketing team could focus on killer campaigns that would engage the potential students they did find. The result? Increased student retention and recruitment.

Coming up with the emotional content that drives a campaign is where the creativity and experience come in. Marcoux sees autonomous marketing as a way to free up marketers to do what they love—create and innovate—and, today, there’s plenty of opportunity to innovate as campaigns become increasingly personalized.

A Mind-Body Approach to Marketing

Customers don’t want to be just a number; they want to be known. “With social media, everything is personal and everything is online,” said Marcoux. “Hooking” modern consumers is a matter of building those personal, emotional relationships—identifying who they are and what their need is, educating them on a solution, and then ultimately providing that solution.

“We’ve seen that personalization come across in emails and social posts, but that’s all been enabled by big data.” said Marcoux. Customers are already so far down the buying cycle when they get to you (nearly 57%), and getting personal is the only way to land your message and have it resonate with consumers these days.

“We’ve seen that personalization come across in emails and social posts, but that’s all been enabled by big data.”

Autonomous marketing powered by data insights helps marketers gather and combine information from many different sources in order to figure out what content is working. This way, marketers can focus on what is actually selling their product rather than getting petrified by what Marcoux calls “analysis paralysis,” or the misinterpretation and incorrect analysis of data.

Ultimately, autonomous marketing is a way to deal with the deluge of social data and other information to help marketers do their job better. Reimagining marketing, according to Marcoux, is a matter of using big data to narrow in on those granular market segmentations and continuing to fine-tune an effective, personalized marketing approach that will hook and keep hooked customers.

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Frederick Vallaeys to Discuss AdWords Opportunities on SMX Advanced Panel

[:en]By Sinan Kanatsiz, Chairman, Internet Marketing Association

Frederick Vallaeys, CEO of Optmyzr, a PPC management platform will be on a panel discussion at SMX Advanced on June 3rd, 2015 where he will discuss what’s happening in the world of advertising, including new developments, features, tactics and opportunities for AdWords. His co-panelists are Brad Geddes, Founder of CertifiedKnowledge; Maria Corcoran, Search Marketing Program Manager from Adobe; and Elizabeth Marsten, Director of Paid Search at CommerceHub. The panel will be moderated by Ginny Marvin who covers all things paid search for SearchEngineLand.com.

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