Yesterday, a bunch of Sydney journos gathered for a posh lunch with ADMA and Oracle Marketing Cloud to discuss ‘the CMO of tomorrow’, following some big bits of data coming out of a new research report.
Over 450 senior marketing execs in Australia, New Zealand, India and Singapore took part in the survey, which looked at how organisations are meeting the challenges and obstacles faced in today’s digital market, and how their investments are likely to change in the year ahead.
At a business roundtable, Jodie Sangster, ADMA CEO, and Paul Cross, group vice president customer success, ANZ, Asia and Japan, Oracle Marketing Cloud, outlined the key findings of the report.
Interestingly, 62 per cent of respondents in Australia have a specific revenue target in their KPIs, while 84 per cent rated their analytics skillset was either excellent or good.
On the flip side, however, few people were willing to describe their levels of sophistication around digital marketing with regards to people, process and technology as excellent, with 22 per cent considering themselves to be downright stragglers in this race.
According to the results, the role of the CMO has vastly moved away from its traditional model.
“Senior executives want their marketers focused on business goals line revenue growth and return on investment but many marketers are still too focused on traditional campaign metrics as a measure of success,” Cross said.
The research has highlighted the disconnect between what senior management define as success which is revenue versus the campaign specific metrics that many marketers still measure themselves on.
“The more a CMO is able to move what I would call ‘proxy’ measures of success, which has been traditional in the marketing industry as things like tarps, promoter scores, ratings, to dollars, which the digital channels have more enabled, the better.
“CMOs who are able to pull together the financial side and the executional side and show value are the ones that will be successful, as distinct from the proxy measures, where you talk about response and ratings.”
“Previously a marketing head would have come up through the marketing ranks, ended up as head of their marketing team and sending out a lot of marketing campaigns – and hopefully driving revenue off the back of that,” Sangster added.
“The role now is changing dramatically so it has become much more about CX. It’s not just about sending out campaigns and hoping people will buy your product. It’s about making sure you’re delivering on your customers’ needs at every touchpoint where the customer comes to you.
“If they’re on your website, you’re delivering what a customer expects from you, if you’re a call centre you’re meeting their expectations there.”
Sangster explained, “The next step is around customer experience, and so many companies are focused on delivering an exceptional customer experience. And that’s often sat within the marketing department, given to marketers to be responsible for, but customer experience requires every touchpoint of a business to be thought about and delivered to customer expectations.
“The role of data and the role of marketing plays a prominent part in that.”
Cross added, “When we think about marketing, we often conflate both demand generation – sell more of my product – with marginal – make more profit per transaction. The purpose of marketing is to do both.
In some ways, it’s the responsibility of the CMO to have developed a model that shows return on investment that is endorsed by the CFO.
“Attribution is one, but CMOs really have to consider what success looks like for their investment around marketing. And I think that’s changing as marketers move closer to revenue.”
“I think the outcome-based business model is, if we think on a scale. The more the company controls the outcome, the closer they can move to an outcome model. Google Adwords is a great example; you pay per click, but Google are in total control and set the agenda of the ad structure.”
“Attribution is still a really big challenge,” Sangster agreed, admitting that even with data there’s still some grey areas around what aspects of a marketing strategy works.
“Yes you can know your results, can you 100 per cent know which channels drove consumers to take a different action? Not always. We’re getting better and better but are we there yet? Not 100 per cent.”
The main three impediments outlined in the report that marketers feel are preventing them from doing their jobs are:
Budget: (50 per cent) Budget was cited consistently around the region as the biggest or second biggest impediment. The failure of marketers to secure budget speaks to the wider issues of both seniority and an inability to describe the benefits and return on investment of digital marketing.
Capability and Education: (48 per cent) Marketers are grappling with the issue of finding the right skills and ensuring the capabilities of their existing teams are kept up-to-date.
Return on Investment: (37 per cent) Given their concerns over capabilities and skills and their knowledge and understanding of digital marketing technologies, it is little wonder that marketers struggle to mount a successful argument for further investment in digital marketing based on measures such as return on investment.
Cross said, “The research shows that significant impediments stand in the way of accelerating the roll out of digital marketing. There is a lack of education about digital marketing capabilities which makes it hard for marketers to understand ROI.
“Under the circumstances it’s no wonder they have trouble getting buy in from other executives or getting their budgets approved. This has proved to be the biggest impediment of all around the region.
Customer advocacy will be critical and the CMO will need authority across much broader parts of the business to deliver the results.
The research results provided an insight into key vertical markets including:
Travel and Hospitality: Marketers in this sector are the most confident in their use of analytics. Over 90 per cent rate their ability to gain insights from analytics highly, however, say their biggest impediment in their use of digital marketing technology is a limited marketing budget.
Retail: Unlike other vertical markets where access to budget was considered the biggest impediment to digital marketing acceleration, marketers in retail cited a lack of understanding and education as the biggest impediment.
Financial Services: Marketers in this sector, perhaps counter intuitively, were among the least likely to have revenue targets and be accountable and measurable against those targets.
Professional Services: Budget was rated as the biggest impediment to accelerating digital marketing efforts.
As McKinsey & Company recently noted, in a paper called, ‘The Four Pillars of Distinctive Customer Journey, “… for every ten-percentage-point uptick in customer satisfaction, a company can increase revenues two per cent to three per cent.”
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