Making Money On-line: Are CMOs The New Owner Of The Data And Technology Around Which Companies Should Organize?

Let's cut right to the chase here, kids. The answer to the question posed in the title is "largely yes" according to Alicia Hatch, CMO of Deloitte Digital. She cites the 2016 Gartner Spend Survey which found that CMOs had one of the highest technology spends of any C-suite member and is on track to overtake CIOs in 2017.

To further support her belief one can point to Forrester's report C-Suite Tech Purchasing Patterns which predicts that by 2018 about 36% of all marketing technology-related new project spending will be fully controlled by CMOs.

Andrew Bartels, Forrester Research analyst and lead author of the report is quick to point out, however, that while the "growing tech-saaviness of business leaders and the wider availability of cloud solutions does mean that business leaders are playing a bigger role in the front end of this process... the persistence of licensed software, the growing adoption of cloud as a replacement for licensed software, and challenges of implementing and optimizing solutions mean that CIOs and tech management teams still play a dominant role in overall tech purchases by businesses."

Mix and Match With Hatch

When I spoke with Alicia, in addition to getting her thoughts on CMOs becoming the new owner of the data and technology around which companies should organize, I wanted to picked her brain on a few other topics including recent changes she's witnessed, what the difference between data-driven and data-informed campaigns is and more.

Steve Olenski: What have been the biggest changes in marketing you've seen over the past 6 months?

Alicia Hatch: Marketing leaders across verticals and industries are intensely focused on marketing technology, attempting to build the most perfect stacks for gaining the most precise customer insights. There are higher expectations of CMOs than ever before, and increased pressure to do more with fewer resources.

These shifts have also happened against a backdrop of a bit of digital disillusionment, spurred by brand safety concerns. While marketers work around the clock to ensure their brands are well-regarded via the distribution of consistent, powerful messaging, there is an increased awareness to the fact that brands cannot control every piece of digital content that may influence how a consumer or company views a particular brand.

Companies are becoming more cautious when selecting where to run advertisements, for example, knowing that their ad could run alongside an offensive message or one that simply does not align with the character of the brand they represent.

Olenski: I read that you believe the evolution of the CMO has driven the rise of martech. Can you elaborate on that? Why do you believe this is the case?

Hatch: Marketing technology originated from the need for marketers to better understand their customers and create more thoughtful, personalized and simultaneously automated campaigns that help build brand identity.

As the role of CMO has evolved from being a pure brand ambassador to a central growth driver of the business, modern CMOs have become intensely data-driven. We must demonstrate we can be predictable revenue drivers with highly optimized spend. In order to do this, we must architect our marketing technology around critical data flows and not just capabilities. We must create data-driven cultures by designing workflows around these data flows.

To effectively act on these imperatives, the martech industry had to rapidly advance to catch up with the needs of the sophisticated modern CMO. Innovation in predictive analytics is now being driven by the new marketing imperative to not only demonstrate business impact but to continuously optimize it.

Olenski: Moreover I've read that you believe that CMOs must be revenue drivers with predictable spend. The operative word here to me is "predictable" which of course ties into a hot topic today: predictive analytics? What are the benefits and shortcomings of predictive analytics that CMOs need to be aware of?

Hatch: While predictive analytics are still a relatively new approach for marketers, the value of its impact is undeniable. According to Forrester Research, marketers that have adopted predictive analytics are twice as likely to exceed revenue targets and lead in market share. Additionally, 83% of these marketers have noted considerable business impact.

Predictive analytics are valuable in that they can provide complete buyer profiles and a general sense of propensity to buy. They’re also particularly helpful in aligning marketing and sales teams by equipping marketers to create highly personalized campaigns with carefully targeted messages and offers.

Yet, predictive analytics are only as helpful as their data inputs, and the data sets marketers can access at this time are still fairly rudimentary when it comes to tracking true indicators of influence. Neuroscience has uncovered that decision-making is almost completely emotional, rather than rational. However, our data collection methods are not yet mature enough to provide meaningful emotional analytics at scale.

Eventually, technology will advance to the point that it can recognize and analyze physical responses tied to emotion, such as the heat I emit from my hand into my phone, or the expansion of my retina in response to a compelling piece of content. Until machines can make systematic sense of the complexity of human emotional response, we will not have tapped into the full potential of predictive analytics.

Olenski: What's the delicate balance between data-driven and data-informed campaigns? Some may ask: Aren't these the same things?

Hatch: It’s no secret that data has quickly become the foundation for everything we do as marketers — from tracking leads, to crafting messaging, to determining ROI on a particular campaign. However, how we incorporate data into campaign development depends on the stage of the process. The key is to be data-informed at the development phase, and then data-driven at the optimization phase.

It’s critical to be data-informed when developing a campaign. Marketers must validate projected campaign performance before launch, ensuring that the anticipated success is in fact plausible and likely.

Once this happens, the campaign will become data-driven on an ongoing basis, allowing marketers to respond to changing audience dynamics and optimize results. Campaigns fail to see long-term success when teams don’t implement sustainable measurement systems that allow for the agility to analyze and respond to changing consumer behaviors.

Olenski: Putting the customer front and center is key for ANY brand's success. How can CMOs spearhead the creation of customer-centric organizations to increase their bottom line?

Hatch: Building data-driven marketing cultures has become a major role of the CMO, and it requires a complete rewiring of marketing operations. Designing organizational workflows and architecting technology around these data flows is the key to enabling a customer-centric marketing organization that drives business value.

CMOs of the future will be highly data-driven, very tech-saavy, and will speak the language of business. These are the CMOs who will lead customer-centric businesses, and be next in line to be the CEO.

Olenski: Finally, let's talk B2C and B2B. At the end of the day is a B2C CMO the same as B2B CMO in terms of driving revenue, providing superior customer experience and on and on? I realize there are differences for sure but in your opinion are they essentially facing the same challenges?

Hatch: Yes, I think B2C and B2B marketers are facing many of the same challenges today, largely as a result of the changing role of the CMO. For decades, the CMO was the C-suite member evaluated by his/her perceived creativity – a soft skill indicated by an undefinable combination of curiosity and inspiration — and tasked with spearheading initiatives to build brand awareness and shape brand identity.

However, as digital continues to transform business models, both B2B and B2C CMOs have to take on a more complex role — one that lies at the intersection of data, technology, creativity and customer service.

Data Anyone?

Today’s Chief Marketing Officer is tasked with many demands, made even more challenging with the ever-evolving digital domain. Their biggest challenge? Leveraging personalization to demonstrate and drive clear ROI to the executive team.

Download The Data Driven CMO to see how leading CMOs weigh in on other challenges, including how they can skillfully decipher, understand, and leverage the abundance of available data to engage with customers.