Beyond optimisation

It’s time to embrace the post-optimisation era. Our global survey of 1,000 CMOs finds that 79% believe they must transform, not just optimise, their businesses through digital technologies. Brands have invested heavily in digital, but it’s clear that it is yet to deliver fully on its promise.

Furthermore, 80% state they will need to take more responsibility for product and service innovation over the next 2-3 years.

However, there is some way to go before CMOs are leading more radical change across the organisation:

• Leading disruptive innovation and delivering business transformation are ranked lowest by CMOs among the roles for marketing for a second year running.
• There is gulf between what is believed to be important and current capability. 85% identify big, creative ideas that build brand and emotional connections as critical to future success. Only 54% believe they are delivering these capabilities well today.

Why CMOs are stuck

A number of factors explain why brands have yet to make digital transformation real:

• Accountability metrics: CMOs are primarily accountable for the growth of the customer base, while medium/ long-term brand health and digital transformation are way down the pecking order.
• The demise of strategy: Nearly half of those surveyed report marketing strategies that plan ahead for 2 years or less, compounding a lack of long- term thinking that transformation usually demands.
• Focus on short-term ROI: Sluggish growth and the rise of ad tech has fuelled a focus on short-term, measurable ROI and optimisation. Nearly two-thirds (64%) of CMOs expect to see more pressure to demonstrate tangible short-term results in the next 2-3 years.
• Under-investment: Marketing budgets are softening in 2019 compared to 2018.
• Overlooking the human factor: Creating the right culture is essential to delivering digital transformation, but many businesses are not prioritising it.

Pivoting to the future

Pivoting towards a new era of innovation and transformation requires brands to combine capabilities across five key areas:

• Creativity and consistency: Nearly three-quarters (73%) of CMOs see investment in creativity and big ideas as essential to cutting through the noise—citing the competition as the #1 barrier to consumer engagement. But creativity needs to align with consistent customer experiences across platforms and channels. Performance and brand-building are not mutually exclusive. Power lies in the combination of both.
• Agility and longevity: An inability to transform quickly enough is now the #2 barrier to delivering marketing strategy, jumping from #5 in 2018. At the same time, the #1 barrier is a lack of long-term investment. CMOs need to operate across multiple timelines to position brands for long-term, sustainable growth.
• Openness and control: A recent survey we conducted of 43,000 people across 24 markets tells us the #1 driver of trust in digital businesses is transparency—but for CMOs the ability to deliver consistently is ranked highest, with nearly two-thirds (63%) believing it to be important. This disconnect emphasises the need for brands to adapt more quickly to changing consumer attitudes and strike a delicate balance between openness and control.
• Foresight and insight: Around half (54%) of CMOs believe more consumer data is available, but it’s become harder to extract insight. A similar proportion say they don’t have the capabilities (e.g. people, technology) to maximise data’s value. CMOs need to ensure their organisations are effective in the use of data both to extract insight today and predict consumer behaviour tomorrow.
• Purpose and authenticity: About three-quarters of CMOs believe that associating their brand with a social purpose will be important to engaging consumers in the future. This needs to be tempered with a focus on what is authentic, to avoid claims of opportunism.

The Integrator CMO

Making this pivot is too big for any one individual or role. Instead, CMOs must fuse together different agendas behind a broader movement for change.

This will rely on integrating the C-suite in the following ways:

• CEO:Align on ownership and expectations – transformation is too big for the CEO not to be in the driving seat, while a shift to longer- term growth requires a resetting of expectations.
• CFO: Speak the same language – a more nuanced measurement and reporting framework, comprising financial and non-financial measures of brand health, both short and long- term.
• COO: Organise around the consumer –embrace ‘zero-based design’ to reassess how the operating model is configured around changing consumer needs.
• CHRO: Create the right culture –set incentives and rewards for innovation and transformation across the organisation, not just in marketing.
• CDO/CIO: Build the innovation architecture – get the right balance between agile approaches to innovation and more centrally driven, waterfall initiatives.
• CSO: Unlock new sources of value – use consumer data to uncover new revenue streams and business model innovation.
• CSustyO: Harness long-term trends – educate the board about authentic social purpose and the long-term consumer trends that can be harnessed to drive growth.

With a greater focus on integration, marketing agencies will also need to work harder to ensure more joined-up approaches across markets, services and time horizons.