CMOs Need Digital Experience Now
Ted Pryor, Greenwich Harbor Partners
It's a simple fact: Marketing professionals who are not in the digital game risk being irrelevant in five years.
Gartner estimates that CMOs will spend more money than CIOs on technology by 2017 as they look for ways to interact in real time and engage their customers. Advertising dollar spend on the Internet still lags consumer time spent there, partly reflecting the failure of traditional companies to find creative ways of engaging their customers online. Mary Meeker at Kliener Perkins estimates that this is a $20+ billion gap in the U.S. alone.
Here are three suggestions on how a CMO can get experience in digital marketing:
1. Get a new job with a digital company. Many digital companies value traditional experience to balance startup enthusiasm and engineering skills that are already in the company. Often the marketing is haphazard and opportunistic. Your discipline around strategy, ROI, and process could make the difference between success and failure.
2. Ask for the digital job in your company. This can mean a lateral move and a reduction in budget and staffing. But most companies would be delighted if a senior marketing executive were to take on the challenge. While it may not be core revenues today, you could be the one unlock the secret to success for the future.
3. Allocate budget to social media and digital marketing. Get a small team going and try a few things. Make sure the team is shielded from the traditional marketing managers. Compensate them on relevant metrics. Bring in a boutique agency with fresh perspective. Focus on a product or region where happy customers might become promoters. Concentrate on engagement and information, not just exposure and inspiration.
In today's market, CMOs can be lulled into a false sense of security employing traditional techniques selling products or services through traditional channels. After all, eCommerce is only 20% of total retail revenues and Internet marketing spend is only 25% of total marketing.
However, the tsunami is coming. E-commerce grew at 18% in 2012 despite a flat global economy, and mobile traffic grew 50%. Google and Facebook ad revenues each grew 45%. There were 2.4 billion new Internet users in 2012 with explosive growth of smartphone and tablet utilization. An ambitious CMO must get digital experience to remain relevant in five years.
Many of our executive recruiting clients still earn the bulk of their revenues through traditional channels, but absolutely require marketing candidates to be current on what is going on the digital world and able to put marketing plans together across traditional and digital platforms. Many candidates for such positions have tremendous expertise, but are not qualified because they had relatively little exposure to digital marketing, probably because it was a small part of their company's business. Such a blind spot in 2013 is dangerous for your career.
Winning candidates for marketing and sales positions with digital demands have made a concerted effort in the last five years to spend quality time in digital markets. Some of these executives simply allocated a portion of their budget to digital marketing and tried a few things to supplement traditional strategies. That tactic alone is a crucial insight into the digital world: fast paced, innovative companies are willing to try things on a small scale with a few good people and see how the market reacts. That willingness to gamble and perhaps fail is critical to digital thinking and an anathema to traditional marketing strategic planning.
The impact of the Internet is being felt in almost every industry, whether it is potential customers researching their prospective purchase or price shopping, or an unhappy customer going on blogs to complain about your service. Electronic coupons, QR codes providing access to product brochures, and loyalty programs being maintained in an electronic wallet accelerate the need for a CMO to be cutting edge in digital marketing and customer engagement.
The Internet and social media hand your customers a way of communicating with each other that is almost as easy as breathing. Even a traditional business that sells all of its products through traditional distribution channels can benefit from engaging with its customers on the Web. For example, a defense manufacturer has created invitation-only chat rooms for customers to comment on its products and interact with engineering experts. Customers who feel that a company is sympathetic to their issues are more likely to recommend its products to their friends and colleagues. The ability to engage customers digitally is a huge opportunity for CMOs, even for companies that do not have a dollar of digital revenues.
Ted Pryor is a Managing Director with Greenwich Harbor Partners.