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SECTION 1
Gain/loss,
status/disgrace,
censure/praise,
pleasure/pain:
these conditions among human beings are
inconstant,
impermanent,
subject to change.
Knowing this, the wise person, mindful,
ponders these changing conditions.
—Buddha Sutra
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CHAPTER 1
WHY CMOS ARE FACING EXTINCTION
To act without knowing why; to do things as they have always been done, without asking why; to engage in an activity all one’s life without really understanding what it is about and how it relates to other things—this is to be one of the crowd.
—Meng Tzu (Mencious)
379–289 BC
Many moons ago, hordes of marketers roamed the Earth. They hunted for fresh ideas, advertising accolades, and brand genius.
Then the Internet-saurus Rex arrived, threatening their very survival. Suddenly, they faced several new predators. Those predators are challenging the role of today’s marketing leader as we know it. Left unchecked, some chief marketing officers (CMOs) may possibly face undue stress, and even extinction. I believe it is essential to pay attention to these trends and predators now, and here’s why:
1. Budgets are shifting. In 2012, Gartner Group predicted that CMOs will spend more on information technology (IT) than chief information officers (CIOs) by 2017.1
2. Lines of responsibility have blurred across functional groups. CMOs can no longer rely on their creative and business generalist abilities. Nick Eades, who at the time was CMO of the mobile technology firm Psion, stressed that “there’s still room for the creative side of marketing, but without a data-centric approach, it would not have a proper context.”2 Will CMOs choose to hoard their budgets, or create cross-functional teams with IT and sales to build initiatives that drive community-wide mind share and market share?
3. Social media exacerbates cross-departmental and customer tensions. Changing social norms, fueled by social media, have caused unprecedented departmental tensions, and are driving CMOs to shift from pushing their ideas to listening more proactively to their ever-expanding community. In the world of transparency, how many companies can truly say that they are in control of their brand, message, pricing, and product quality?
In public, they may proclaim themselves to be brand stewards. In my private CMO peer group discussions, however, leaders tell a different story. I hear countless examples of how their top-producing salespeople monopolize their field marketing teams’ time. Their chief executive officer (CEO) meddles in their marketing planning efforts, undermining the CMO’s role and authority. It is not uncommon to hear that people outside of the marketing department will offer their opinion on how marketing should be run, which campaigns need resources, and what social media platforms the company needs to pursue. This results in a never-ending pile of last-minute projects, end of quarter “one-off” collateral (such as custom presentations and events), and other potential costly distractions. How does a CMO know which last minute requests are worth completing, and which are windmill-chasing exercises?
4. The “Wild West Web” spawns confusion and trust issues. How can CMOs intelligently process and filter through the nonstop cacophony from Facebook, LinkedIn, customer forums, and countless media outlets? For example, in today’s over stimulated information marketplace, anyone can become a blogger and a self-proclaimed expert in their field. I saw this trend take shape in 2002, when masses of displaced executives became fitness, life, and business coaches. All they needed to do was promote their services and launch a website to qualify. The same pattern has emerged with the “social media expert” movement. Whom can you trust, and who are the real experts in your field?
Thanks to the era of customer and employee transparency, anyone can proclaim themselves to be a marketing expert, fueling further mistrust and misunderstandings about the true purpose of marketing. Conversely, most employees would never walk into the chief financial officer’s (CFO’s) office and tell her how to redesign their income statements.
5. Traditional industries are under attack. Rapid shifts in buyer behavior and leaner methods of distribution and delivery are spreading across many industries like wildfire, and are forcing marketers to explore new (and uncharted) ways to go to market—and, in some cases, they are barely surviving. Think of the following industry examples:
• Book publishing options have mushroomed. In the days of yore, authors worked through traditional publishing channels: literary agents would vet your book proposal and find you a publisher for a percentage of book sales. Publishers would provide copy editors, production, and public relations teams. In other words, they were the manufacturer and primary warehouse for hard copy books. You, the author, built a marketing plan to promote the book. The sequence was clear and predictable.
Today, self-published authors can outsource these roles to online firms and freelancers and generate an impressive-looking finished product. Bestselling business authors Seth Godin and Guy Kawasaki chose the self-publishing route in response to disappointing interactions with bulk distribution of their e-books. In Kawasaki’s case, retailers such as Amazon and Barnes &Noble could not fulfill an order for 500 electronic copies of Enchantment for his upcoming keynote presentation. That inflection point spawned a new bestseller for Kawasaki and coauthor Shawn Welch entitled APE: Author, Publisher, and Entrepreneur. Today, many authors love the ability to determine their own publishing fate, and Amazon has emerged as a self-publishing powerhouse for that audience.
• Brick-and-mortar retailers are painfully adapting to customers’ new buying habits. JC Penney, Macy’s, Target, and Barnes & Noble are watching profits erode because many shoppers visit a brick-and-mortar store to find what they need, then go online for the best price. This nascent customer behavior is referred to as showrooming. In early 2014, JC Penney and Macy’s announced thousands of layoffs and dozens of store closings as a desperate yet necessary response.
• “Almost instant” taxi service is now the new norm. Thanks to companies like Taxi Magic and Uber, passengers can find the nearest sedan, know their exact wait time, and ride in a comfortable, clean, well-maintained vehicle. The days of waiting outdoors in the rain to hail a cab are disappearing.
• E-learning and online education methods threaten the hallowed halls of higher education. Massive Open Online Courses, or MOOCs, have created a new delivery method for learning, and people are enrolling in droves. A January 2014 LinkedIn article discussed a woman named Laurie Pickard who expects to complete her MBA online within three years—for less than $1,000. Columnist John Byrne reported that “in the space of just nine months in 2012, from February to November, the number of institutions offering free online business courses has doubled to 51 from 26, according to the Association to Advance Collegiate Schools of Business (AACSB) International. The number of business faculty teaching MOOC courses has more than doubled in the same timeframe to 83 from 39.”3
• In health care, the sick-care models are being replaced by patient-centered care—and, ultimately, prevention-based models. Hospitals in the United States are particularly poised for radical change. The rapid pace of patient care management technology, the abysmally high medical error rate in today’s hospitals (e.g., preventable fatal infections), and our crippling health care costs are literally killing off health-care organizations. They include hospitals, insurers, and private doctor practices. Authors David Houle and Jonathan Fleece describe this dramatic shift in The New Health Age: The Future of Health Care in America. They believe that “such change will be so transformational that by 2020 one in three hospitals will close or reorganize into an entirely different type of health care service provider.”4
• Stand-alone gaming product sales are declining. According to management consultant Dan Markovitz, “they are getting crushed by inexpensive, smartphone-based apps. Who wants to pay for an expensive X-Box that you can only play at home in your living room, when you can spend $1.99 for an app that you can play anywhere, anytime?”5
If this level of disruption can happen to CMOs in these seemingly disparate industries, then it can happen in your industry.
Are you taking a broad view of your market potential and competitive landscape? Or do you face market contenders who barely existed a few years ago, and have been operating under the radar? It’s possible you have cogs in the value chain that are headed for the endangered species list.
6. Pressure to demonstrate a return on investment with marketing has reached a fever pitch. This came to light when I recently spoke with the CMO of a large nonprofit headquartered in Washington, DC. He lamented the cost and the challenges associated with measuring marketing return on investment (ROI). “When I seek approval for my key initiatives from the CEO, she wants facts and figures. I cannot always prove the return on our marketing investments in the short term. A lot of what we do is unchartered territory. And our Google Analytics tools can only tell a partial story. We are stuck between a rock and a hard place because we would love our online efforts to drive more...
