CMO - c3centricity

How to Triumph Over Budget Cuts and Prove Your Marketing ROI

Posted on April 23, 2024April 26, 2024 by Denyse Drummond-Dunn

As we all know and, unfortunately, have probably also experienced, every dollar in our marketing expenditure must be justified, and we have to prove our marketing ROI or risk budget cuts!

Chief Marketing Officers (CMOs) face the dual challenges of managing budget constraints while also demonstrating the return on investment (ROI) of their marketing initiatives. The rapid evolution of today’s digital landscape only compounds these challenges, demanding strategic agility and an analytical mindset from today’s marketing leaders.

Marketing Budget Allocation

Gartner’s most recent (2023) CMO Spend Survey reported that marketing budgets fell from 9.5% of company revenue to 9.1% in 2023. This confirms the constant pressure on marketing to do more with less.

As a result, most have readjusted their commitments to marketing channels, resources, and programs, and a similar proportion say they are facing significant pressure to cut martech spending.

ROI on Marketing and Digital Specifically

The rule of thumb for marketing ROI is typically a 5:1 ratio, with exceptional ROI being considered at around a 10:1 ratio. Anything below a 2:1 ratio is considered not profitable, as the costs to produce and distribute goods/services often mean organizations will break even with their spend and returns.

However, according to a recent Data & Marketing Association (DMA) study, the average ROI for digital (email) marketing in 2022 was $36 for every $1 spent.

Of course, this figure varies by industry, with retail, e-commerce, and consumer goods companies often seeing higher returns thanks to direct purchase links in their emails.

While B2B companies have a slightly lower ROI, they benefit from the long-term value of relationship building and lead nurturing through email.

These numbers are a testament to the effectiveness of well-executed marketing strategies and the ROI of email. It’s clear that email marketing is thriving in the digital era.

A Strategic Approach to Navigating Budget Constraints

Reassess and Reprioritize Marketing Channels

In times of budgetary pressure, the first step for CMOs is to conduct a thorough reassessment of existing marketing channels. This involves analyzing each channel’s performance against key metrics to identify areas where spending can be optimized.

The goal is to allocate resources more effectively, focusing on high-performing channels that promise better engagement and conversion rates.

Embrace Cost-Effective Digital Marketing Strategies

Digital marketing offers a plethora of cost-effective strategies that CMOs can leverage.

Content marketing, email marketing, and social media platforms provide avenues for reaching large audiences at a fraction of the cost of traditional advertising.

By creating valuable content that resonates with their target audience, brands can foster engagement, build community, and drive conversions without hefty ad spending.

Foster Creativity and Innovation

It’s not all bad news! Budget constraints can actually serve as a catalyst for creativity and innovation within the marketing team.

Encouraging team members to think outside the box and develop unconventional ideas can lead to cost-effective marketing solutions that drive significant impact.

Whether it’s guerrilla marketing tactics, viral social media campaigns, or leveraging user-generated content, the key is to differentiate the brand in … Click to continue reading

Should CMOs Concentrate on Brand Building or Business Growth?

Posted on May 27, 2021June 1, 2023 by Denyse Drummond-Dunn

Do you remember when Coca-Cola did away with their CMO in favour of a Chief Growth Officer? Then two years later they brought back the position. At the time, I asked if they were wise or foolhardy to make such a change, but they answered the question themselves!

In an interview with Marketing Week, their global vice-president of creative claimed that it had “broadened” the company’s approach to marketing. Obviously, this didn’t live up to their optimistic expectations. I think that other companies who followed suit, also realised that they need a CMO after all. However, their role has changed significantly.

HOW MARKETING HAS CHANGED

Marketing is an old profession. It’s been around for hundreds of years in one form or another. If you’re like me and are fascinated by how change happens, then I’m sure this complete history of marketing Infographic by Hubspot will be of interest.

With the arrival of digital marketing in the early 80’s, many companies began to take a serious look at their marketing. They realised that their primarily outbound strategy had to change. Their consumers didn’t appreciate being interrupted in their daily lives. However, with the creation of inbound marketing, they still irritated their consumers with spammy emails, popups and “subtle” cookies for following their every move. No wonder the EU felt inclined to develop its GDPR (General Data Protection Regulation).

What has changed over the past five years is marketing’s deeper awareness of, if not complete adherence to, what customers like and dislike. The major trends that we have seen and their impact on marketing, include:

Chatbots, especially through Facebook Messenger and WhatsApp, to catch consumers on the go with highly personalised messaging.
The use of voice. With the battle between Amazon, Microsoft and Google in the voice search and commands domain, customers can get answers just by asking. This is a huge challenge for businesses because being on the first page of search results is no longer enough; you have to be first!
Video is taking over social media, with its rapid rise on YouTube, Vimeo, Twitter and Facebook.
Influencer marketing is giving way to customer journey mapping with the increased detail that IoT can provide. Many organisations have moved their marketing plans to mirror their customers’ path to purchase. Or rather paths, as personalisation continues to trump mass engagement.
Zero-party data. As social media platforms have seriously reduced the collection of their subscribers’ data, brands are increasing their direct engagements with their consumers. Through polls, quizzes and competitions, they openly ask for consumers’ details, bypassing the need for cookies.

Have you taken these megatrends on board and adapted your marketing accordingly? If not, why not?

[bctt tweet=”In order to survive many CMOs have adapted to such megatrends as chatbots, voice, video and zer-party data collection. Have you? #Brand #Marketing #Trends ” username=”Denysech”]

BRAND BUILDING

In the past decade or so, many large CPG companies such as P&G and Nestle renamed their Marketing departments as Brand Builders, in … Click to continue reading

The Good, Bad and Downright Ugly Parts of a Head of Marketing Job

Posted on March 7, 2021October 9, 2023 by Denyse Drummond-Dunn

“Never miss an episode. Subscribe on Apple Podcasts to get new episodes as they become available.”

Did you know that the average tenure of a Head of Marketing position continues to fall, reaching just 41 months according to the latest Spencer Stuart research published by the WSJ?

It is still one of the shortest average terms of office of any chief in the C-suite, according to a recent report by Korn Ferry. But one piece of good news in the past year is that although conditions for CMOs have become more difficult since the coronavirus pandemic, “In many cases, CMOs are not being removed, but it’s been pretty dramatic layoffs beneath them” said Greg Welch, practice leader for marketing, sales and communication at Spencer Stuart.

So just how long have you been in your position?

The Bad News

A global survey by the Fournaise Marketing Group provides one possible explanation for the continued decline in tenure. It highlights the ongoing tensions between CEOs and CMOs. A huge 80% of CEOs don’t trust or are unimpressed with their CMOs, compared to just 10% for their CFOs and CIOs. Why is this?

Perhaps it’s because CEOs don’t understand the role of a CMO or is there still an issue with the ROI of the marketing budget? I’ll let you be the judge of this in your own situation.

Another piece of research by HubSpot reported that Marketing as a career suffers credibility issues as well. It ranked the most trustworthy jobs, with Doctor ranking number one and near the bottom, just above Car Salesman and well below Barista, was “Marketer”. Car salesmen? Really? That is scandalous!

The Opportunities

Let’s start at the beginning. What opportunities are there, that marketers can keep their jobs? Despite the short lifespan of a CMO, and while the position is plagued by high turnover, this could also be because CMOs are highly visible.

Therefore they can be targets for promotions or a steal by their industry competitors. Nice to feel wanted, isn’t it?

[bctt tweet=”CMOs are highly visible, which is great for promotions or a steal by the competition. #CMO #Marketing” username=””]

It is understandably important that a new CMO quickly makes an impact. More so than any other c-suite function, bar the CEO of course, who sometimes faces almost immediate criticism by shareholders and the financial world, upon being named.

Another piece of good news for the head of the marketing function is that being on the executive board they have access to resources. The bad news is that as the CMO is a member of the EB, management expects them to make (profitable) changes fast.

And even more so if they have just been hired! The board trusts the new CMO to analyse the situation, identify what needs to be done, develop the plan to do it and then take actions. And all of this in their first 3 months or so!

Are you or have you yourself been in exactly this situation? … Click to continue reading

How the Best Marketers are Getting More Actionable Insights

Posted on October 17, 2019October 9, 2023 by

Are you as busy as I am, as we plan on how we’re going to deliver on all our objectives before year-end?

The last quarter of any year is a stressful time indeed, but this post on actionable insights is a must-read if you want to start 2020 ahead of the competition!

I’ve just returned from running a two-day workshop in Japan. The topic was “Insight into Action with Impact”. One of the things that I loved about the workshop was that marketing was invited too. Even though market research and insight (MRI) groups generally report into marketing in most companies, it seems to me that they are often working on different planets! In many organisations, the collaboration between these two departments goes no further than project briefings and results delivery.

This is not the case with my client in Tokyo; this MRI group has a wonderful working relationship, not only with marketing but also with Channel, Sales, R&D, Finance and even Legal. They have understood that insight development is too important to be left to the market research team alone and have worked hard to build strong relationships with all the other departments in their organisation.

[bctt tweet=”Insight development is too important to be left to the market research team alone. #MRX #Marketing #Insight” username=”Denysech”]

I am sure that many of you reading this, are asking why this is so important. It is NOT important, it is VITAL! Insights are the golden nuggets that we are all searching for. Successful companies depend upon deep customer insights to grow their business. They understand the power of engagement built on insight, to connect with and inspire their customers. And yet many companies continue to leave this to the insight team to develop and deliver on their own. It’s as if they believe that this group have some natural-born skill or magic that enables them to do it while others cannot. Don’t worry, we can all do it with the right training and a few tools.

[bctt tweet=”Insights are the golden nuggets that we are all searching for. #MRX #Marketing #Insights ” username=”Denysech”]

Great companies understand the importance of insight generation and the challenges faced by everyone in developing them. This is why the best marketers search for greater collaboration. I always encourage the market researchers in my client companies to socialise with other departments, rather than sitting behind their computers all day. The best marketers already do this, do you?

I was encouraged to see that marketing have finally understood the importance of insights. In some recent research by Gartner CMOs selected market research and insights as just as important as marketing analytics and digital commerce (see graph below).

Better late than never I suppose, but it always amazes me that marketing could put anything ahead of insights. After all, every action they decide to take should be based upon deep knowledge and understanding of the customers targeted.

If you are struggling to develop insights that will truly resonate … Click to continue reading

Tag: CMO