A friend of mine recently left a large multinational (traditional) firm where he held some of the highest senior marketing roles in management, product and international levels for several years. We had a long telephone conversation over the weekend and I wanted to introduce him to the wonderful world of blogs to help ease his transition out of the corporate cocoon he inhabited. But when I looked around the marketing blogosphere, all I saw were great blogs covering digital marketing. There was hardly anyone writing about traditional marketing in the way it used to be done before the online revolution.
Then, yesterday, I came across Dion Hinchcliffe’s excellent article A new reality between the CMO and CIO. As it turned out, this meme has been going around for the past year, initiated by Gartner’s Research VP Laura McLellan who fired the first salvo with a report entitled “By 2017 the CMO will spend more than the CIO”.
In a 2012 Gartner report, McLellan says marketing budgets are now 10% of revenue vs. 3.2% for IT, and more than half of the marketing budget is going to “high-tech marketing” (aka technology-enabled marketing).
Both Laura and Dion think that the CMO and the CIO will need to work closer together as peers because their relationship and roles are rapidly evolving.
But in my opinion, we don’t need to wait till 2017. The CMO-CIO relationship has already evolved beyond a peer one. Unless, you’re in some very old-fashioned industry or company, the CMO’s prominence has risen above the CIO’s from startups to mid-size companies, to several large companies who grew substantially over the past 10 years.
The CIO’s role is gravitating towards Infrastructure and Integration priorities, and is being pushed down the executive suite in favor of the CMO who has a full deck of innovation cards and growth-related initiatives up their sleeves. The CMO needs technology to be deployed and integrated, not developed. What I’m seeing is the CIO becoming more subservient to the CMO’s needs.
THE CLOUD KILLED THE CIO AND HELPED THE CMO
The culprit of this saga is the cloud and SaaS solutions. If you’re a CMO, or a smart employee or manager working for a small or large company and you want something done, do you go to the CIO and ask them to place your needs on their full schedule, or do you go searching yourself for a self-service cloud-based SaaS option you can implement tomorrow? You want it now, and you will likely start telling others about it after you’ve experienced success with it. Then you ask for integration, service levels and scalability,- tactical things that the CIO can help with.
MARKETING IS IN MOTION
Let’s place some Marketing functions in 4 buckets of activities: Traditional, Table stakes, Fading and Digital.
Traditional Marketing was governed by the 4 P’s: Product, Place, Promotion and Price. That translated into activities such as market segmentation, pricing, advertising, branding, distribution, product marketing, positioning & messaging, market research, marketing communications and events marketing.
Table stakes Marketing
You can’t escape table stakes marketing once you have customers or are selling to new ones. It revolves around demand generation (leads, referrals), customer marketing (success stories, references, testimonials, product reviews), and account-based marketing.
These methods are either becoming ineffective or less applicable. Email marketing, outbound marketing, interruption advertising and direct mail marketing.
That’s where the growth is. Gamification, SEO/SEM, social (media & networks) marketing, advocate marketing, inbound marketing, customer analytics, mobile marketing, video, content marketing, e-commerce (if applicable), marketing automation tools and real-time marketing.
THE NATIVE MARKETING TRAP
How about tech startups?
Most tech startups are digital natives, and so is the predominance of their marketing. But it’s a blessing and a warning.
Yes, they understand digital marketing and some have never heard of, or done traditional marketing. The CEO/founder is typically the first CMO until a VP of Marketing emerges. But there is a risk when they start to focus entirely on digital marketing and ignore the other facets of marketing. I’m calling this pitfall the “native marketing trap”, i.e. staying online and marketing solely via growth-hacking techniques, user activity and analytics data while your business model is also online. Yes, the data granularity is good, and you can make plenty of decisions on that, but that’s not enough. Plus, you’re tempted to stay there because native marketing is relatively cheap, and you start to get a false sense of comfort given the ROI’s you get.
As a startup, if you rely entirely on native digital marketing, you will have blind spots and you will have weak spots. It’s OK to start just with native marketing, especially if your user growth keeps you busy enough, as you might think, “we’re growing users like crazy, – why do we need additional marketing?” And you start to believe that “marketing is for sucky products”, despite the “bug report on that allegation“.
I’m seeing signs of the native marketing trap with several B2C or consumerized B2B Internet companies that religiously follow their users fingerprint and forget about the other range of marketing activities that are meant to solidify their position in the marketplace. That’s the key blindspot they fall into. Native marketing helps your users, but not your market position necessarily.
OUTSOURCE THE CIO, NOT THE CMO
If you’re a CEO, and you need to pick between the CMO or the CIO and you only have one choice, what would you do?
Answer: Keep the CMO and outsource the CIO.
A CMO’s job can’t be outsourced. It is becoming too strategic. A CIO’s job can be outsourced, just like much of what IT does. Unfortunately, the cloud has thrown the CIO out along with the legacy apps, and it made the CMO more powerful because they can find a SaaS app for almost any function or priority they have.
It’s a great time to be in Marketing. That’s where I’m seeing a lot of emerging innovation that will impact the growth of businesses, whether you’re a startup, a medium-sized or a large company.
And if you’re a marketer with both traditional and digital marketing skills or experience, you’re the only ones with a 360 visibility on marketing.