A recent study by the IBM Institute of Business Value interviewed over 1700 Chief Marketing Officers (CMOs) in 64 countries representing diverse industries. The results were fascinating.
Over 79% of CMOs anticipated significantly more complexity over the next three to five years and less than half felt prepared to handle it. The CMOs indicated that the biggest gaps and uncertainty about their ability to handle them stems from areas that have the greatest impact on their organizations:
- Data explosion was their number one concern. With the advent of digital media, marketing organizations have greater access to large volumes and wider variety of data emanating from diverse channels at high velocities. Over 70% of the CMOs said that they were unprepared to deal with this data explosion.
- Social Media was another area of uncertainty. The mechanisms by which CMOs plan to engage with customers are changing. They plan to focus on "relationships" and not just "transactions". 56% of the CMOs indicated that they plan to use social media as a channel to engage customers.
- Rapid proliferation of channels and devices creates an opportunity to engage with customers more directly and in real time. However, CMOs understood that integrating these channels is key to provide a seamless experience.
- Shifting consumer demographics are pushing the boundaries of social engagement. CMOs see the shift, but felt ill equipped to predict their customer's expectations around platform choice and personalized service. In order to cultivate meaningful relationships with their target audience, CMOs recognize that they have to connect with them in newer and innovative ways.
One of the most surprising findings from the study was that there was a high degree consensus among the CMOs on the challenges they faced regardless of their location, industry or even how large or successful their respective organizations were. Even though their inability to deal with data explosion was the number one cause of concern, a majority of the CMOs recognized that and more than two-thirds believed that they would need to invest in new tools and technologies and develop new strategies for managing big data. So what are some of the strategies and imperatives for the CMOs to bridge the "big data capability gap"?
- Treat Data as a Strategic Asset.
Even though marketing organizations have access to a wealth of customer data, most haven't figured out a way to use it to deliver value to empowered customers. The study showed that 82% of the CMOs use external market research to influence marketing strategy decisions. Very few of them consult direct sources of customer sentiment, track blogs, third party reviews and customer-generated reviews on products and services.
Marketing organizations understand the power of brand, the impact of creatives and the reach of messaging. However, they have been slow in understanding the value of data. Data indicates consumer behavior, it highlights audience intent and provides insights on customer preferences. Organizations need to treat it as a strategic asset. Which means that they have to collect all forms of data, across all channels, and harness it effectively. Before investing in technology infrastructure and process changes, CMO's need to inculcate a cultural change within the organization around the value of data. Once you treat data as a strategic asset you will automatically be inclined to think about policy considerations as it pertains to managing it. The study shows that only a quarter of the CMOs considered it necessary to change their privacy policies as they geared up to managing big data. We all know that this is incongruent with most consumer expectations.
- Relentlessly focus on measurement.
One of the benefits of the new age of digital marketing is that everything is measurable. The digital exhaust emanated by consumer behavior can be used to accurately measure marketing ROI. In fact, 63% of the CMOs interviewed for the study say that over the next five years, measuring ROI will be their top way to evaluate marketing’s success.
With Digital Media being the medium of choice for most ad agencies, one can measure conversions, online campaign performance and attribute it to different channels to dynamically adjust media mix to maximize marketing ROI.
Marketing organizations that have a relentless focus on measuring all activities pertaining to marketing and adjusting their spend based on performance will be in a better position to outperform their competitors. One such organization, Intuit, uses a myriad of metrics to track and measure marketing performance. In a recent webinar, The New Age of Analytic Marketing, they describe techniques used for measuring word of mouth marketing and customer experience across channels.
- Bridge the talent gap.
The challenges posed by big data and evolving consumer expectations requires a different type of skill and tenacity for the marketers of tomorrow. Some of the differentiating skills would be the ability to use data as a basis for decision making, work with large data sets, understand analytics and data mining and comprehend the evolving marketing and advertising technology landscape. Joe Zawadski, the chief executive of MediaMath, summarized the talent need in the industry as thus: “the right person is someone with a combination of pure quantitative skills, applied marketing skills and an understanding of how the advertising technology business works”.
For the first time, CMOs will have to compete for top big data talent with financial services and technology firms. That is bound to create a short a supply and recruitment alone will not be able to bridge the talent gap. Enabling existing workforce thru education and training is key.
For marketing organizations this is an era of continuous change. One thing that I could gather from the study was that CMOs understood the nature of the disruptive changes and have correctly identified the areas of greatest impact. Overcoming the hurdles is a complex and multi-year process. Like most transformational programs, it always starts with enabling people, restructuring processes and then investing in the right technology.