Why it's time to reinvent the marketing function
It should come as no surprise that some of the world’s most successful companies are abolishing the role of chief marketing officer (CMOs). Advertising, or at least traditional advertising, has historically been the core tool that CMOs use for marketing a company's products or services. Yet it has been on the wane ever since the internet came along and turned everything on its head.
Why it's time to reinvent the marketing function
For example, two years ago The Coca-Cola Company, one of the world’s most iconic brands, scrapped its CMO role. It was the first time since 1993 that it had operated without one. Now, as Ad Age reported, only 70% of Fortune 500 companies have a CMO, down from 74% ten years ago. Granted, there are some exceptions. Last month, Snapchat, the social media platform, welcomed its first CMO to the board. As Evan Spiegel, the company’s founder and chief executive, noted, the firm needs to “explain our core product value to customers everywhere.”
However, the direction of travel is clear. So does the decline of the CMO signify the end of marketing as a strategically important role deserving of a focused seat at the boardroom table?
In a word, no. But what it does signify is that the marketing function needs to be reinvented (or at the very least, redefined) for today’s complex marketing landscape, which continues to evolve at an accelerated pace.
“The aim of marketing,” noted Peter Drucker, the 1950s guru of business management, “is to know and understand the customer so well, the product or service… sells itself.” That still holds true today. At a time when customers and their shopping habits are changing at the speed of light because of digital technology and social media, there has never been a more important time for companies to have a dedicated C-suite officer who understands all of the options and who is able to focus on them.
The trouble is that the CMO job has historically been synonymous with creating ad and other campaigns. This has been changing, but it needs to change faster. These days, there are many different marketing paths that companies can take to reach consumers. But, first, to build durable relationships with their customers companies must know and understand their wants and needs and, importantly, how they want to receive marketing messages. Of course, that’s always been true, but today it has become much more complex. Market research has always been one way to learn about the customer, and the advance of technology, artificial intelligence and big data analytics make this research more effective.
Companies that want to “know and understand” the customer should do so by developing a marketing function that uses the full range of tools in their toolbox. Ones that help them not only engage with their customers but, as Sebastian Jespersen and Stan Rapp have opined, “entangle” with them. Advertising is still important, even as the traditional audience is fracturing and increasingly hard to find. There will always be a place for a beautifully crafted ad that communicates the essence of a product or service. And, although, everyone seems to be focusing on targeted marketing, there will always be a place for broad reach marketing.
Companies still use traditional advertising, but now they also use online advertising, personalized advertising, pop-up stores, subscriptions services, influencers, experiential marketing, virtual reality and artificial intelligence and much more to connect, engage and bond with consumers. And yet, if you think of marketing as “persuasion,” then the product itself should be the most powerful marketing tool. That leads to another effective, but often overlooked, tool that harks back to the first era of marketing before advertising assumed its dominant position. It’s brand licensing, where a brand owner permits or licenses another company, typically a manufacturer or service provider, to create, market and sell a product or service, aligned with the brand promise, that features its brand name and logo.
It is, in effect, an analog tool that has real relevance in the digital age. In the online world, where consumers jump from one thing to the next, it can be hard to grab their attention, create a bond, drive loyalty. Products, by contrast, are tangible. They can be experienced in a deep and meaningful way, and in a way that words just cannot express. Where ads push the company and its products and services at consumers, products pull the consumer to the brand, allowing the consumer to choose when and how to engage with the brand. Moreover, licensed products extend a brand’s presence in retail stores, reach consumers in new ways and strengthen or redefine a brand’s message, all goals of any marketing strategy.
Whether or not companies choose to abolish the CMO role or incorporate it into the broader remit of another C-suite officer with other responsibilities, it is clear that the marketing function needs to be reinvented and redefined for today. Whoever is running marketing needs to become the voice of the consumer around the boardroom table – and needs to be the executive who understands, focuses on and uses the full range of marketing tools at their disposal to deliver the brand message to the consumer, where, when and how the consumer wants to receive that message.
Michael Stone is the chairman and co-founder of global brand extension licensing agency Beanstalk.