The Value of a CMO?

The last years there have been quite a few discussions about the true value of a CEO. The related research work tries to understand the casual correlation between the performance of a CEO and a company performance. As Harris Collingwood describes in this month’s "The Atlantic" the majority of researchers argue that there is not a strong correlation between both factors, unless the CEO is performing very poorly. It seems that leadership (and CEO’s performance) matters sometimes but not very often. Even Jack Welch agreed (half seriously) that in the early and mid 90ies a German shepherd could have managed.GE successfully. 

This whole debate brings up the question: How important is the CMO for the health of a brand and the success of a company’s marketing? I am not aware of any research that tries to tackle this issue, so I have to satisfy my curiosity with a few thoughts and hypothesis. 

It seems to me that the key job of a CMO is focused on four core tasks:

• Brand steward: Position a brand competitively in its category with a clear understanding of what the brand stands for (and what not)
  
• Budget Owner: Decide how most effectively (short and long-term) to spend the overall marketing budget across all channels, consumer segments, product portfolio, and regions
  
• Consumer Advocate: Understand the core target and consumer of the brand
  
• Marketing Innovator: Innovate against all dimensions of marketing, from price to product to communication, etc.
  

Surprisingly quite a few CMOs don’t really change anything in any of the four above described dimensions while being in their position. Often, they continue the previous marketing investment strategy with slightly modified creative, they barely gain a deep understanding of the brand’s consumer, and they limit the marketing innovation in small areas with low risk that does not fundamentally change the brand’s success or failure. 

Therefore my hypothesis is that the performance of most CMO’s has an even lower casual correlation to the company performance than the activities of a particular CEO. CMO’s have due to the scope of their jobs less impact on a company’s performance, and they change significantly less than one would expect 

But there are always exceptions, and these exceptions are the reason why our industry continues to be exciting. And quite often, the true CMO is the highly involved and brand centric CEO like Steve Jobs at Apple.

The ambitious "Seed"

This week I had the chance to meet Adam Bly, founder and editor of Seed magazine. I was pretty impressed with his thinking about Seed and all the related ventures around the magazine that he is currently developing with his team. I was especially intrigued that Ben Fry, an early pioneer of data visualization, joined Seed magazine and is pursing now his interests as part of the Seed Media Group. It is very encouraging that some magazines realize that great content is highly desired, independent of its distribution form. And Seed is one of the few magazines that continues to hire extremely talented individuals to increase the quality of its thinking and work. 

Additionally the Seed magazine team seems to leverage its expertise around “Seeing everything through the lenses of science” to offer services that traditionally consulting companies or advertising agencies would do (e.g. building interactive websites, designing visualization applications). The magazine is really stretching itself not just onto new distribution formats but morphing itself into a modern Media Services company that ignores the traditional boundaries of publishers. The magazine might remain the center but the periphery of this center could become more important than the magazine itself. 

Seed’s core agenda is definitely highly ambitious. Here is an excerpt form his corporate website, describing its core principles:

·   “Science is transforming our global culture and conversation unlike ever before, shaping markets, informing policy, inspiring the arts and deepening our understanding of who we are, where we come from and where we're heading.

·   The pursuit and impact of science is borderless.

·   Science is a powerful tool for solving global problems, from climate change to clean water to poverty and development.

·   Science affects every single person on the planet.

·   Widespread science literacy is essential in the 21st century.” 

It is admirable to pursue such an ambitious agenda and to do this with quite some success over the last four years. Beyond that, Seed might function for us as an early indicator of new developments that have high relevance for our thinking and working in marketing. 

Data dictatorship

Douglas Bowman, a former Google employee, now with Twitter, got some notoriety over the last months (The NY Times calls it a “commotion in the technology blogosphere”) by challenging Google’s reliance on testing every single design element in a lab like environment. His main argument is that the constant testing of every single smallest design element through consumer feedback (in Google’s case comparing click-through rates across different versions of a design element) paralyzes a company and hinders any true design or product break-through. 

The concept of any end product understood as the sum of thousands small and thoroughly consumer tested elements is becoming an increasingly important paradigm, especially with a lot of Web Design projects. Bowman’s criticism shows a rift between two fundamentally different philosophies that have relevance beyond just Web Designers:

• One that relies on the belief that everything is a never ending beta version that needs constant refinement and optimization by attempting to incorporate real-time or near-real time consumer feedback. A product or service is an endless feedback loop, not designed by a brilliant single mind or a group of smart designers but by the wisdom of the crowds. It is the ultimate expression of an ego-less design approach
• The other relies on the supremacy of human brilliance. The belief is here that there are brilliant minds that can see a product and service on a more holistic level and therefore achieve a level of innovation and breakthrough that no smartly leveraged crowd can ever achieve. It is the ultimate expression of the human genius which seems to be responsible for most major breakthroughs. 

It is difficult for me to declare here a winning theory or approach; both seem to have its merits. The first one (call it “Consumer centric optimization”) seems to be more relevant if one wants to improve smaller feature items in a product, the second one (call it “Mind derived innovation”) more promising if one wants to design and launch a totally breakthrough product. 

No form of dictatorship has ever survived for ever, and data dictatorship will loose at the end, too. We should thank Bowman to shed some light on the limitations of a pure data and science driven process that almost seems to be wary of the human mind and its creativity. So, give him some traffic on his blog at http://stopdesign.com.

 

Geospatial marketing

Fellow blogger and smart interactive marketer Scott Johnson has a nice brief post about the opportunities of marketing applications within the geospatial science, referencing a research project by Penn State University. The opportunities of utilizing location smart applications for marketing opportunities will grow significantly over the next years. 

I am especially curious of their usage within malls and retail stores. Aisle 15 at Kmart will be a new usable location reference point for any consumer. A consumer’s location (ever changing) will become an increasingly important attribute for segmenting, targeting, and customizing a particular marketing message. Its aggregated usage across a significant number of similar minded consumers could even influence new product ideas and innovations. Key players will be the usual suspects like Google, Apple, a few dominant telco provicers, and hopefully some new companies that no one knows yet.