Three of the ten things global marketing leaders lose sleep over sit inside their own companies rather than out in the market: where marketing’s role begins and ends, how the value of the brand gets demonstrated, and how roles and responsibilities are divided. Marc de Swaan Arons and Frank van den Driest treat the three as one connected credibility problem, and they are blunt that part of the damage is self-inflicted.
For over half a century marketers deflected detailed scrutiny of their spend by falling back on Wanamaker’s remark about the wasted half nobody could identify. As spend migrates from push to pull to interactive media, results and effectiveness can be measured accurately, and that shelter is gone. Measurement cuts both ways: it lets marketing prove its return, and it lets every other function bid for the same money by comparing results per dollar spent.
Key findings
- A Spencer Stuart report puts the average tenure of a CMO in the US at only 18 months.
- The same peers who called marketers creative, passionate, inspiring and hardworking also called them undisciplined, un-commercial and not accountable.
- Greg Welch of Spencer Stuart watched a closed-door room of senior US marketers fail to reach consensus on the most critical metrics for a marketing dashboard.
- The traditional consumer goods ratio of 7 to 15 percent of revenue spent on marketing is now up for grabs, because any function can compare results per dollar.
- Private label share passed 50 percent in many UK categories, against under 20 percent in the US.
Building Board-Level Understanding of Marketing’s Value
Reputation comes before argument. CMOs are battling marketing’s legacy reputation among peers as spenders who bring little connectivity and even less accountability to daily business realities. That is the prior belief any case has to overcome. A leader who opens with brand theory is answering a question the room is not asking, because the room is asking whether the money is managed. Greg Welch says he ‘can’t name another functional leader within the organization that faces such fundamental questions’ about justifying spend.
Lennard Hoornik of Sony Ericsson rebuilt the opening ritual of his own reviews: the first thing his team does in every meeting with him is report the business health of their products and key markets, then the forecast, then the actions planned to improve results. Brand discussion follows business discussion. Folkert Kamphuis of Novartis sets the standard as margin returned for every dollar of marketing invested, and presses on how that gets proved.
The Competitive Case for Investing in a Brand
The strongest material is competitive rather than emotional, because product advantages stopped holding. Every peanut butter is now smooth, so the visible quality signal that once separated the premium brands from the rest has gone. HTC, which five years earlier manufactured private label phones for operators, had become a threat that Nokia, Motorola and Sony Ericsson were watching nervously. Retailers spent two decades hiring veteran Unilever and Procter & Gamble marketers to build labels of their own.
Hard functional differentiators and unique selling propositions have dwindled, competitors carrying no legacy costs undercut established brands, and genuine technical advantages are more and more copied and commoditized. Consumers once knew exactly why, and under what circumstances, they were paying a premium price. Remove that reason and what sustains a premium is trust and the reduction of risk. Tex Gunning of AkzoNobel Consumer Paints adds that purchase decisions now extend past the old definition of value to a brand’s values.
Settling What Marketing Owns and Answers For
The ambiguity is internal in origin. Hoornik describes marketing as passing through a redefinition of what it is responsible for, with little agreement on what is in and what is out, and asks how colleagues on the board can be expected to understand when marketers do not agree among themselves. Because a brand is trust and the reduction of risk in a consumer’s mind, below-par delivery of the brand promise can bring down the whole house, so someone inside the organization, generally a marketer, has to coordinate across every touchpoint.
That turns a mostly outward-facing function inward. Marketing, Sales, PR, CSR, Internal Communications and Investor Relations can no longer run their touchpoints independently, and ownership gets settled one question at a time: who answers for internet-based customer service, who keeps retailer partner programs consistent, who is minding the store. Organizations are skilled at giving people responsibilities and chronically deficient at taking them away, which leaves overlapping roles and duplicated resources. Better organograms do not fix it; the mindsets and behaviors of marketers decide the outcome.
Scope and limitations
The top-ten list comes from the authors’ own consulting practice and their conversations with global marketing leaders, not from a controlled study.
Their one named piece of original research, the Leading Global Brands study, is cited for a single point: that aligned teams, clear roles and coordinated handoffs are more the ideal than the norm.
Source
This page summarises The Global Brand CEO: Building the Ultimate Marketing Machine, by Marc de Swaan Arons, Frank van den Driest, 2010.