What Makes A Great CMO ?

October 25, 2010

I’ve often said that the best CMO is a CEO who believes in Marketing. But beyond this, what makes a great CMO? This is germane not only to CMO’s whose average tenure is about 2 years, but also to CEO’s who need Marketing to drive results.

What Makes A Great CMO?

CMO Competency Research

Egon-Zehnder International (EZI) has taken a close look at this and has some interesting insights. Over the past 5 years, EZI conducted 25,00o CMO appraisals across 300 companies to better understand what differentiates great CMO’s from average ones.

Assessed skills included: results orientation, team leadership, collaboration, strategic orientation, organizational development, change leadership, customer orientation, and market knowledge.

Markers of a Great CMO

EZI’s assessment shows that 2 factors stand out in differentiating great from average CMO’s:

1.  Results Orientation

“Results orientation means driving uncompromisingly for better outcomes, often achieving them through skilled use of robust analysis and benchmarking”

 

2.  Change Leadership

“Good CMO’s are adept at advocating change and communicating a clear and compelling new direction…they set clear targets that focus people on achieving the change and develop metrics that both monitor and motivate it”

You could easily summarize the above as “set a direction and then deliver on it.” And, this is entirely consistent with a previous post, “What Do CEO’s Really Want From Marketing?,” where I discussed Lou Gerstner’s definition of CMO success: great CMO’s build the brand and build the business.

Makers of a Great CMO

What Can CMO’s Do?

1.  Success Metrics — One thing that most CMO’s can do better is to develop clear Marketing success metrics and then use them to assess the performance of their Marketing efforts. I’ve written extensively about the need for Marketing to be more accountable, particularly with Advertising and Media.

  • Does your advertising build your brand equity ? Which creative or media choices contribute most to this growth?
  • Does driving your brand equity scores build your revenue and profitability ? Which equity attributes are most critical to better business outcomes ?
  • Does your advertising build volume, share and revenue ? And, what’s the short and long-term ROI impact ?

2.  Reward Metrics — The same metrics can be used to reward your organization. Whether you recognize and reward people on an ad hoc basis, or with more formal annual Marketing Awards events, every CMO has an opportunity to continuously recognize great performance by individuals and groups by emphasizing progress on the same metrics.

Success Metrics & Reward Metrics

 

Set a Direction and Then Deliver On It

Like most good insights, it sounds simple but is, of course, hard to execute in practice. Lou Gerstner was right. Great CMO’s just build great brands and drive better business results. And, the Egon-Zehnder research just proves it.

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Put Social Context Where It Matters Most – Next to Your Advertising

May 10, 2010

I was in Bangalore, India last week, and it seemed that cell phones were everywhere.  Increased cell phone penetration — now estimated at over 500 million — and the ability to access the web cheaply and from anywhere, is driving rapid change.  In fact, a headline in The Economic Times read:  

“TWEET EQUITY:   Consumers are exchanging notes online, even posting complaints on the CEO’s Twitter page, leaving companies with no choice but to rethink strategies in a world where consumer behaviour is being driven by online exposure.” 

Buzz Builds the Social Media Ecosystem

The social media phenomenon is global, there’s no doubt about it. “Earned” media (e.g. user generated reviews, blogs, organic search, Facebook fans, Twitter followers, etc.) continues to increase in importance, no matter where brands reside.  And as I’ve written about before, traditional “Paid” media (e.g. traditional TV, Print, paid search, etc.) is still viable.

So the bigger challenge for Marketers today is how to integrate the two into one larger Marketing communications interlocked plan. To do so, Marketers need a much better understanding of how they influence each other.

Questions About Earned Media

I talk to leading CMO’s, Media Heads, and Heads of Research and Insights at major CPG companies on a frequent basis. Virtually all of them believe that earned media is growing in importance, and probably impacts other paid elements of their Marketing mix, but few have the research to really know for sure.  

Questions I routinely hear include:  

• What’s the real value of a Facebook fan?  

• Do positive blog posts make my advertising more effective?  

• Does advertising drive more positive buzz?  

These are great questions, but unfortunately, they’re mostly just that–questions without answers. This is changing, however, as new research sheds light on how social media affects traditional paid advertising.  

Facebook Fans: Build Value through Social Media

Measuring the Impact on Paid Advertising

One recent example is the initiative by Nielsen and Facebook to study the impact of social context on ads placed on Facebook (Disclosure: I work at Nielsen).  

Nielsen and Facebook surveyed over 800,000 users, about 125 Facebook ad campaigns and 70 brand advertisers. Users were grouped into a control group (no ad exposure), a standard ad group (exposed to the ad only), and an Ad + Social Context group (exposed to the ad and the fact that their friends were fans of the brand–see below).  

The Value of Facebook Ad Impressions (image from Nielsen Wire)

Key Learnings – Where’s the Biggest Impact ?

The basic Ads on Facebook drove higher recall, awareness and purchase intent than the control group not exposed to ads. And, as you would expect, the ads with social context around the ads drove better results than the ad only group.

 

   

No Ad Control  

   

Ad on Facebook  

 Ad on Facebook with Social Context

 Index Context Ad vs. No Context Ad  

Ad Recall

100  

110  

116  

1.6x 

Awareness

100  

104  

108  

2.0x 

Purch. Intent

100  

102  

108  

4.0x 

What’s more interesting to me is this:  the results from having ads + social context improve as you move down the Marketing funnel from ad recall to purchase intent. That is, the ads with social context achieved 4x the purchase intent of the ads with no social context, while they recalled only 1.6x better. 

It seems that positive earned media, in this case knowing that “your friends are fans of the advertised brand,” makes more people notice your advertising, but has the greatest impact on the most important metric prior to purchase: Purchase Intent. It’s the power of an indirect recommendation from people you know. 

Putting the Learning Into Action

So, now we know that social context makes advertising more effective. The next obvious question is how brands can get more of it. And then CMO’s will have a new challenge: getting positive earned media where it matters most–next to their brands advertising.  

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Why “Easier” is Better for Your Brand

April 19, 2010

Is “easier” better for your brand? Consider this excerpt from the article “Easy = True” by Drake Bennett

Imagine that your stockbroker…who’s always giving you stock tips–called and told you that he had come up with a new investment strategy. Price-to earnings ratios, debt levels, management, competition, what the company makes, and how well it makes it, all those considerations go out the window. 

The new strategy is this: Invest in companies with names that are very easy to pronounce. This would probably not strike you as a great idea. But, if recent research is to be believed, it might just be brilliant.”

If making it easier to pronounce the name of a company can influence stock market performance for the better, can making your marketing “easier” for consumers build your brand and Marketing ROI? 

Cognitive Fluency

A relatively new topic of research in the world of psychology these days is “cognitive fluency.” It’s the study of how the ease or difficulty in thinking about and understanding a topic influences our attitudes and preferences toward it. As a research topic, psychologists are learning that cognitive fluency affects our thinking in subtle, yet important ways. Many of which are very relevant for communicating with consumers. 

Apple Advertising — “Easier” in Action

Let’s take a real world example: the Apple iPhone. With the iPhone, Apple had a tough task: communicate the incredible multiplicity of apps so that consumers would immediately understand the ease and simplicity of accessing them to solve basic everyday problems.

iPhone TV Advertising - Simple & Effective

Now think of the Apple iPhone TV advertising. What I think of is simple, easy and wow. Showing the ease of using the iPhone, tapping cool new apps, and solving practical problems brings their value to life in a way that makes complicated and complex-well, easy. 

The Broader Advertising Landscape

In my experience, simple and easy to understand ads tend to be more effective. The impact of making something easy to understand has been show in research to influence consumer preference and choice. For example, Novemsky et al. demonstrated that even something as simple as fonts can make a difference; fonts which were easier to read doubled purchase intent versus more difficult to read fonts. 

Cognitive fluency suggests that making your Marketing easier to understand results in making it easier for consumers to do what you want them to do — consider and buy your brand. There are multiple angles you can take for making your brand easier. Or, just by making it your Marketing centerpiece as Staples has with their “Easy Button.” 

Staples Easy Button - Marketing & Cognitive Fluency

5 Areas to Make Your Marketing “Easy”

1.  Brand Equities – Every brand should have both strategic and executional equities.  Strategic equities include brand benefits and reasons to believe, while executional equities are the distinctive executional assets the brand wants to own (e.g. McDonald’s and the yellow arches; Bounty and the Quicker Picker Upper, etc). 

Once defined, brands should work to build strategic and executional equities into distinctive assets that distinguish the brand from competition through repetition and variation.  Repetition is important because it makes your brand more familiar and, as cognitive fluency learning shows, more familiar equals easier. 

McDonald's Yellow Arches: A Distinctive Brand Equity

2. Visual and Auditory Cues — Another smart way to build brand familiarity and make it easier for consumers to identify your brand is through visual and auditory cues. A great example of a visual cue is the Pantene “hair flip” that communicates “shiny hair,” which has been part of virtually every Pantene ad for the past decade. 

Auditory cues are also important, as I wrote in a previous blog post “Why Your Brand Needs an Acoustic Identity.” Can you imagine the Olympics without the Olympic theme music, or a United Airlines ad without “Rhapsody in Blue?” Of course, when done well, visual and auditory cues can also become executional equities. 

3.  Congruent Context – Ease of understanding is also related to context. The more congruent a brand’s ad with the program content it sits within, the easier it is to relate to the ad. A Slim-Fast ad in the The Biggest Loser is easier to understand and remember than a Slim-Fast ad in another TV program about a different topic, even when the demographic make-up of the audience is the same. Why? The Biggest Loser viewers are thinking about weight loss, and so, it’s easier for them to digest the Slim-Fast ad message. 

4.  Packaging – Even packaging can make consumers’ lives easier. Ease of finding a package in store is a key metric many CPG companies use to evaluate packaging impact. The easier it is for consumers to find your package, the more likely it is that they’ll actually consider and buy it. 

Packaging - Critical to the In-Store Experience

5.  Pricing – Many companies have moved to “value pricing” with low everyday prices and modest merchandising discounts. Making it easy for consumers to understand your true value includes pricing strategies that don’t distort the real value. 

Easier is Better

Of course, the list above is only a starting point–almost any part of your Marketing Mix and customer experience can be made easier. Most CMO’s and Marketers would agree that easier is better. Yet there’s an awful lot of Marketing that isn’t simple, transparent, or easy. 

Why? My guess is that Marketers, like anyone else, need to think that what they’re doing is challenging and difficult. And the truth of the matter is that it is–great Marketing is hard. And one of the reasons it’s hard is that so few Marketers focus on making it “easy.” 

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The Future of Marketing & Me

September 24, 2009

This month, I started a new role with Nielsen IAG as Global EVP/GM for the Consumer Packaged Goods sector. IAG measures program and marketing engagement across the 3 screens (TV, Web, Mobile) in real time to help Marketers optimize their Marketing effectiveness and business impact. This role affords me the unique opportunity to sit at the forefront of the revolution that’s washing over the Marketing landscape, by working with CMO’s of major CPG companies to understand what Marketing really works and what doesn’t in TV, web, in-program product placement and cross-media in this new, complex and highly challenging world.

The Nielsen Company

The Nielsen Company

A sampling of the topics I’ll be focused on include:

  • Media Selection – How does selecting the right TV programs improve ad recall?
  • Ad Optimization – What is the optimal creative unit mix, copy length, wear-out, and rotation?
  • Program Environment– To what extent does the program environment drive ad effectiveness?
  • In Program Product Placement – How should Marketers evaluate product placement?
  • Cross Media Performance – What are the cross-media effects of ads?
  • Digital  & Social Media – How does advertising work in new media and in interaction with TV?
  • Real Time Impact – How do Marketers monitor ad performance in real time and adjust on the fly?

Blog Themes — Transformation & Impact

If you’re read any of my blog posts over the past few months, you’ve probably recognized at least two major themes:

  • The Transformed Marketing Landscape — We’re living through a transformational period in Marketing, the likes of which hasn’t been seen since the rise of TV and mass marketing. This change is driven by the fragmentation of media, increasing digitization of marketing, rise of social media, increasing importance of word of mouth from our social networks, and measurement tool innovation, among others. In short, Marketing has become a real-time, highly complex, more measurable, and conversational endeavor.
  • The Need to Demonstrate Real Marketing Impact — Marketing should build brand image, increase customer satisfaction, and deliver improved top and bottom line business results. Marketers were already challenged to show real value for their spending before the changes outlined above; their ability to deliver results in this environment is even more challenging. This means that, more than ever before, they need partners who can bring sophisticated measurement and analytical tools to bear on their most pressing challenges and leadership thinking as to what this means for the Marketing function.

The crushing economic crisis of the past 18 months has, in my mind, only accelerated the need for the Marketing function to become more transparent and accountable for real business results. CEO’s, CFO’s and shareholders are demanding it, either directly or indirectly.

How My New Role Impacts This Blog

  1. The CMO Perspective — I’ve written this blog from the point of view of a CMO. This perspective will continue, and in fact, will be enhanced as I meet and work with CMO’s from major CPG companies around the world. These conversations will enable me to bring an insiders view of the major issues and challenges facing Marketing organizations in this changing Marketing landscape, and share these perspectives as appropriate.
  2. The Marketing Effectiveness Perspective — The new role provides a unique vantage point: the ability to look across CPG companies, brands and geographies to understand what works and what doesn’t. I want to have more and deeper insight into what Marketing really drives business results than anyone else in this space.  This will allow me to provide new perspective and insight, while still respecting client confidentiality.

Going Forward

I’ll continue to write about important Marketing topics — both ones which benefit from my Nielsen perspective and those which don’t. This blog won’t be an ad for Nielsen or a thinly disguised vendor white paper. But it will frequently draw on Nielsen data to make what I think are important points about Marketing. And while it should go without saying, it most certainly won’t ever compromise the confidentiality of any client which does business with Nielsen.

Thanks for your support and readership. Keep the comments coming. I look forward to continuing to write about Marketing topics that are at the forefront of the Marketing transformation that is enveloping us and most importantly, how Marketing can build brand equity, customer satisfaction and revenue and profit.

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Should Marketers Care About Corporate Reputation ?

September 8, 2009

It seems that everywhere you look these days, a great corporate icon’s reputation lays in ruin — General Motors, AIG, Citicorp — the list goes on and on. Yet many Marketers seem to be obsessed only with the latest Twitter app or new social media platform. To be sure, these are important and even epochal changes in the Marketing landscape, but where’s the sense of focus? Or, as I asked in a recent Forbes CMO Network Q&A column, is reputation management someone else’s responsibility?

GM -- Reputation Lost

GM -- Reputation Lost

Corporate Reputation — Not a Marketing Priority?

Company reputation often receives short shrift from Marketers and for good reason. It’s often seen as the purview of “corporate communications” — the people who manage challenging stakeholders like the media, NGO’s, Wall Street analysts and the like—as well as regular consumers. Thus, it’s seen as an important, but not high priority for many Marketing organizations.

This is a dangerous and narrow point of view for Marketers–particularly for single brand companies. Why? Because corporate reputation is often correlated with business results: stronger reputations equal better financial results. And corporate reputation is often driven by factors that Marketing can and should influence. So, Marketing needs to play a leading role along with Corporate Communications to deliver integrated plans that build brand equity, corporate reputation — and even better business results.

AIG -- Reputation in Tatters

AIG -- Reputation in Tatters

Corporate Reputation Does Not Equal Brand Equity

Historically, the Marketing function focus has been on brand equity — the key functional and emotional benefits the brand wants to “own” in consumers minds to differentiate it versus competition and drive consideration and purchase. Corporate reputation is broader than brand equity. It’s the measure of company attributes that add up to overall corporate image. Brand equity and corporate reputation are not the same thing, but they often do overlap and reinforce each other. Hence, a good reason for Marketing to care about corporate reputation. Most importantly, strong brand equity and corporate reputation both lead to improved business outcomes.

Defining the Drivers of Corporate Reputation

Good marketers use “drivers” research to quantify how various brand attributes impact overall brand image, and focus their marketing efforts accordingly. This discipline can also be applied to corporate reputation management. Company reputation drivers and their impact are often ill-defined. So, the foundational work of rebuilding corporation reputation is defining the reputation drivers and then quantifying their impact on overall corporate reputation.

Citi - Rebuilding Reputation: Where to Start ?

Citi - Rebuilding Reputation: Where to Start ?

Corporate Reputation Drivers – An Example

Here’s an example of what one large multinational company facing corporate reputation issues learned. First, they identified 25 reputation drivers via qualitative interviews with stakeholder groups. Second, quantitative research was conducted to understand the single variable impact of each driver in each group. Not surprisingly, the analysis showed that just 3 reputation drivers were having, by far, the most impact on corporate reputation.

  • Open & Transparent Communication – Research showed that this was a top factor driving corporate reputation—and had almost 10x the impact of most other factors. Stakeholders wanted the full picture—including what mistakes were made, why, what was learned, and most importantly what plans were in place to fix the problems so they would never happen again. For more on this topic, see my previous post: “Why Your Brand Needs to  be Open & Transparent.
  • Providing Good Value For Money – The second most important driver was how stakeholders perceived the products and services of the firm relative to cost. Understanding the importance of this led to additional research to more clearly define “good value for money” and how to deliver and communicate it more effectively to stakeholders.
  • Consistent & Stable Corporate Financial Performance – The company’s financial performance on average and over time was also a key driver. This is an “outcome” driver and one that only improves as the company actually turns words into deeds and delivers on its promised plans. But knowing its importance reinforced the need to communicate progress and results to stakeholders in a timely and comprehensive manner.

Stakeholder Tracking

Equally important to identifying and selecting the key reputation drivers is the continuous understanding of your stakeholder groups:

  • What are their most important issues and concerns?
  • What do they want to hear from senior management?

Stakeholder research helps you focus your messaging on the right topics, and tracking data shows whether your messages have been understood and internalized. What portion of key stakeholders are aware of your message? And do they really understand? Research is a critical step to “close the loop” and help you understand progress and make adjustments.

In the aftermath of the most serious financial crisis since the Great Depression, Marketing has a new challenge – to help rebuild corporate reputation. CMO’s must think about their role more broadly than just building brand equity. They must work in partnership with Corporate Communications in a more systematic and disciplined manner to deliver what everyone should agree creates significant long term shareholder value–a strong brand and an improved corporate reputation.

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