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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