Marketing Department Priorities Often Differ From CEO’s
Agenda, ANA/Booz Allen Hamilton Study Finds
More companies appoint Chief Marketing Officers,
but role is poorly defined
A study by the Association of National Advertisers (ANA) and management
consulting firm Booz Allen Hamilton found the corporate marketing function
is not aligned with the CEO’s agenda, instead focusing on tactical issues
such as maintaining branding guidelines, sharing best practices, and
counseling divisions. Further, the joint study revealed that the role of the
CMO is poorly defined at an alarming number of companies, and that companies
expect marketing to provide measurable outcomes such as return on investment
(ROI), but current metrics are not up to the task.
The study results were revealed at a roundtable on
"Unraveling the Contradictions: Making Marketing Masterful in an Era of
Change," at the ANA Annual Conference on Saturday, October 9th in Naples,
Despite the challenges the study identified, it also
revealed an emerging sequence of best practices for prospective CMOs. Key
"success factors" include identifying whether a company’s CMO model is
focused on providing service, advice, or driving growth. Other success
factors include agreeing on an "expectations" contract with the CEO,
establishing clear organizational structures and decision rights, renewing
focus on capabilities such as ROI analytics and consumer insights and taking
risks in pursuit of big ideas.
"This joint research effort demonstrates that the dynamic
and rapidly evolving landscape demands that all marketers become more
accountable. The CEOs have been living and breathing this for years. They
are frustrated at the uncertainty of not knowing which half of their
advertising dollar is ‘wasted’. The message here is clear – marketers need
to measure and convey their value in the same language and metrics their
CEOs use," said Bob Liodice, ANA President and CEO.
The study of over 100 companies revealed the increasing
importance of marketing – and the challenges it faces:
Marketing is increasingly important to corporate
success, but CEO and marketing priorities are not aligned.
Across all industries, 75% of marketers and non-marketers agree that
marketing is far more important to corporate success than it was five years
Respondents in all nine industries studied cited
competition and new products and ideas as the top two reasons for
marketing’s ascendancy. The results vary by industry; for example, 79% of
consumer packaged goods respondents felt that "marketing is best positioned
to orchestrate across corporate functions to create and promote new products
and ideas." In the auto category, however, only 44% of respondents felt that
way, while 81% cited "fierce competition" as the primary cause for
In addition, marketing is becoming increasingly important
in industries where it has traditionally taken a back seat. For example,
banks are realizing that their options to grow through acquisitions are
diminishing and they must become more successful at deepening relationships
to drive organic growth. Reflecting this, 33% of financial services and 36%
of Consumer Packaged Goods respondents – higher than in any of the other
industries – cited the need for organic growth as a reason for marketing’s
At the same time, marketing is disconnected from the
According to the Conference Board’s CEO Challenge 2004 report, the top four
priorities for CEOs are: top line growth (52%); speed, flexibility,
adaptability to change (42%); customer loyalty and retention (41%); and
stimulating innovation (31%). In contrast, marketing is focused more around
tactical issues such as setting and maintaining branding guidelines (83%),
counseling divisions (52%) and sharing best practices (52%) than it is with
driving the CEO agenda (37%) and driving innovation (35%). In fact, less
than half of respondents indicated that the issues that keep CEOs awake at
night are at the top of marketing’s agenda. "Marketing organizations need to
do a better job of identifying and supporting the CEO’s priorities," said
Paul Hyde, Vice President of Booz Allen, who noted that the average CMO
tenure is only half as long as that for CEOs.
Measurable outcomes are expected of marketing, but
current marketing metrics are poor.
Over half the respondents (51%) said that the difficulty in measuring
performance is a key reason for pressure on the marketing department. "There
is no consistent definition of ROI," noted one respondent. Marketing
organizations are instead using "surrogate" metrics, ranging from
input-related metrics such as awareness and brand image in financial
services to market share and growth in consumer packaged goods companies.
Higher expectations from marketing are driving
reorganization, but the key emerging role of "CMO" is still ill defined.
Nearly 70% of respondents to our survey indicate
that the marketing function in their organization is currently being
revamped or already has been restructured during the last three years.
Organizational restructuring was most likely at telecom and technology
companies (nearly 85%), and least likely in the consumer packaged goods and
health industries (nearly 60%).
The Chief Marketing Officer position is gaining
The addition of the CMO position is becoming an
increasingly important element of reorganizations. In fact, 47% of Fortune
1000 companies now have a CMO position, although the role lags such titles
as Chief Executive Officer (98%), Chief Financial Officer (91%), Chief Human
Resources Officer (83%), and Chief Information Officer (80%). However, the
position is defined in radically different ways – used for corporate and
business unit positions in some companies, and for staff and line positions
Five keys to success
In-depth interviews with marketers revealed five keys to success for
successful CMOs and senior marketers:
- Know which of three potential CMO roles you will be
expected to fulfill — Marketing Service Provider, Marketing Advisor, or
Driver of Growth.
- Agree on the contract with the CEO from the beginning,
and continually check your progress against it.
- Develop organizational linkages, at both the corporate
and business unit levels.
- Drive the marketing capability agenda. Quickly making
progress on areas such as innovation and ROI marketing that are key to the
CEO agenda will be critical to the ultimate success of the CMO.
- Take some risks – come up with the big ideas. "Sometimes
you have to be courageous," noted Ed Landry, Vice President at Booz Allen.
"You can’t have a fundamental impact on a company’s direction without taking
Over 370 marketing and non-marketing managers of mostly publicly traded
companies completed an online study of marketing organizations conducted
jointly by the Association of National Advertisers and Booz Allen Hamilton.
About 80% of the respondents were senior or middle managers representing 14
industries, with over 90% of the respondents distributed evenly between
Consumer Packaged Goods, Financial Services, Retail, Technology,
Telecommunications, Manufacturing, Health, Auto and Professional Services
industries. In addition, in-depth interviews were conducted with 23
marketers from 12 companies.
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