By: Javier Rodriguez-Horta, Global Practices Lead
Marketing has always been and will continue to be trend-driven. As 2023 comes to an end, marketers across all industries were playing the forecast the future game. Some predictions will be as precise as a SpaceX rocket landing, and others will simply miss the mark.
Certain trends might have seemed obvious right out of the gate, such as AI’s impact across industries, especially with user-oriented AI-powered virtual assistants. Or the bet on spatial computing by tech companies like Meta or Apple, and how that exploration will create for marketers a new dimension in consumer interaction and advances in creative tech. Or Gen Z’s expectations of omnichannel marketing. Yet, there’s an overarching trend that is under the radar, and it involves one key protagonist – the CMO.
CMOs are destined to be again a force to be reckoned with. As through the lenses of marketing management, there are some trends that we have been noticing at CvE which are changing the conversation in and about the role of marketing. These trends are intertwined with the CMO and place marketing center-stage for those organizations in search of realizing higher growth.
CMOs will Prioritize Pragmatic Strategy
The combination of conscious consumerism and the advantages of a circular economy created a sustainability-obsessed marketing culture. That led to purpose-driven marketing where collective awareness goes beyond environmental concerns. And although in theory broader mission brands get involved in social issues that resonate with consumers, we cannot forget the true purpose of a business. At their core, the universal and primary purpose of a business is to maximize profits for its shareholders.
Pragmatic Strategy is about strategizing creatively, ethically, and effectively. The era of force fitting purpose to brands is over. Unilever investor and founder of Fundsmith Equity Fund, Terry Smith, said it best, “A company which feels it has to define the purpose of Hellmann’s mayonnaise has in our view clearly lost the plot.” CMOs will be instrumental in implementing Pragmatic Strategy and brand direction will be more strategic. There will be a clear difference as to which brands will carry the sustainability and purpose torch, and which brands will remain solely as cash cows for the organization.
This paradigm will require a skillful balancing act from CMOs, where well-thought-out decisions will have to be made based on facts and simple logic without eclipsing the corporate social responsibility that is so fundamental for their consumers. Effective CMOs will better leverage their cross-functional partners, capitalize on analytical-driven tools and activities to better understand their consumers and increase attribution. The strategic actions that are most pragmatic are the ones destined to win and reach the most desirable outcomes in this constantly evolving industry.
CMOs will Unleash the Power of MarTech as the Ultimate Growth Engine
Marketing is an Expense that allows the organization to match products and/or services with potential consumers. That is changing. The C-level suite has realized that there is a limit on how skillful or creative they can get on finding efficiencies in the middle of the P&L to deliver the bottom line. Leadership’s focus is shifting to the top-line, and despite Sales’ tie to Revenue, to grow beyond those identified and attainable capabilities Sales needs Marketing. And not just your typical Marketing entourage, but one that uses technology to their advantage.
With the evolution of Marketing Operations, the realm of CMOs has extended beyond the boundaries of marketing activities. They still embody what their brands are, what they stand for, and help establish emotional and rational connections with customers. But technology has become an instrumental component in marketing effectiveness.
Forward-thinking CMOs will master both marketing and technology – they will invest in their technical understanding and partner far closer with IT on use cases than ever before for both acquisition and retention/upsell. By unleashing the power of MarTech, CMOs will help drive meaningful change in their organizations that will be reflected across the P&L.
CMOs will Maximize the Untapped Potential of Retail Media
The Covid pandemic reshuffled the marketer’s playbook and forced everyone to embrace digital life. The digital frontier became a digital reality for all in marketing. Online advertising revenue in the US according to Statista grew 35.4% from 2019 to 2020 reaching $189.3 billion and has kept on growing. Retail media networks (RMNs) got the spotlight and have become an attractive source of income discovery for retailers and an effective medium for marketers.
The world of RMN started back in 2012 with Amazon as the pioneers, and yet the potential of this medium is still untapped across our industry making retail media rightfully our marketing primadonna. Even when realization struck that the digital reality was on steroids, and players like Walmart rebranded their media group in 2021 to what we now know as Walmart Connect, there is still much to explore. We have only scratched the surface of retail media.
RMNs offer what no other medium can by allowing brands to target shoppers that can be identified through first party data as having a propensity to materialize a purchase. In an industry where attribution is king, RMNs are the throne. Astute CMOs will realize that RMNs transcend the confines of “media,” making this medium extremely appealing for its versatile effectiveness and a vital ally for growth. RMNs are destined to become the channel of choice, particularly for CPG CMOs. Yet, those CMOs who succeed will be the ones who comprehend that a kingdom is more than a king and his throne. The retail media strategy ought to be aligned with and complement the greater marketing and business goals to achieve success.
True strategic skill is about taking the complex – listening to customers, suppliers, competitors, etc., scanning the environment for systematic changes in tech, regulation, economies, demographics, and other disruptive forces – and then developing and applying your internal resources and capabilities appropriately in a dynamic world. CMOs able to master and implement Pragmatic Strategy and execute it in their organizations will have a profound impact on performance.
By increasing collaboration with their IT partners and investing to empower their Marketing teams with the appropriate software and platforms, CMOs will be able to unleash the true potential of their organization. MarTech will allow Sales to meet and even exceed top-line expectations.
CMOs that capitalize on the untapped retail media potential by acknowledging that RMNs transcend the confines of “media” and use wisely to their brands’ growth advantage the first-party data, will help deliver marketing and business goals.
What is evident in the business arena in 2024 is that the stage is set for CMOs to really shine and seize the mantle of ‘the growth engine” driver for their organizations.
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Javier Rodriguez Horta, Global Practices Lead at CvE