Neville Fielke, who spent 18 months as senior director of marketing — the equivalent of CMO — for the Foster’s Australia operating unit of Foster’s Group Ltd., has worked to build bridges to other functions. “I often find that people do not have a grasp of what it means to be a borderless company, to operate successfully in multiple channels, or to understand profit pools and cost structure…. For many years I’ve been advocating the need to organize horizontally around the value chain, as opposed to thinking vertically or within functions.”
Marketing does much better when it’s incorporated into the greater business, say these thought-leading CMOs. It can drive growth more quickly if it is fully integrated with the different functions, and it can do so in a way that previous CMOs never realized was possible. For a CMO to be fully effective, all of senior management must have clarity about the marketing mission. The high degree of turnover in marketing leadership — and, indeed, among the subjects interviewed in this book — demonstrates the fragility of that shared understanding.
Live a New Agency Paradigm
The complete CMO does not just build strong new ties within the enterprise; he or she also takes a fresh look at external relationships. That means new managerial challenges for subcontractors in the marketing world — advertising agencies in particular — and those who manage them.
Gone are the days when marketing departments could pour vast amounts of money into an agency for splashy television advertising campaigns that never produced any hard evidence of a return on investment. Every effective marketing program now has a solid base in disciplined metrics that keep department goals closely aligned with the company’s strategic objectives. “There is only one indicator that really counts,” argues Olaf Göttgens, vice president of brand communications at Mercedes-Benz. “The amount of money spent on marketing for each car purchased.”
As the model of the consummate new marketer changes, so will demands placed on the advertising agencies and the ancillary companies that work closely with them. In order to provide real value, they will need to complement the marketing organization instead of just following its marching orders, and that will require a new kind of partnership. In the late 1980s, the concept of account planning —with agencies assigning an in-house client surrogate to keep messages on target and budgets in line — brought a more aggressive element to agency/client interactions. With the new emphasis on value, today’s service organizations will need to be more confident in their abilities to anticipate marketers’ needs and not just react to work orders.
Jerri DeVard draws on her experience at Citigroup and Verizon when she talks about most advertising agencies. “They’re evolving too slowly. They are holding on to the past and trying to rationalize it.” P&G’s Stengel is equally blunt. “They need to get more integrated. They need to collapse structures. They need to go digital. Those that are making those changes,” he says, are so sought after they “are turning away business. Those that haven’t adjusted are struggling.”
This response is more than just rhetorical: The leading CMOs are getting ahead of the advertising profession. They are assembling multiagency groups — a remarkable step that often puts business competitors at the same table and demands that they work together to create a better product. The CMOs may be polite about the new processes, but they’re also being firm. The mandate is to move on or move out.
Staying ahead of the curve means moving beyond the usual approaches to draw consumers in, and agencies must partner with their clients to find the best mixes of media and formats for doing that. “We are moving from technology push to consumer pull, from push marketing to co-creation, from idea manufacturers to consumer experiences,” says Keith Pardy, senior vice president of strategic marketing, brand management, and consumer relationships at the Nokia Corporation. “If you have to push advertising to consumers, you are out of business. Advertising has to be context-relevant. And whatever you do, add value to popular culture and do not patronize the audience.”