Can CMOs lead digital marketing transformation? If so, how?

by Erwin Jansen - May 26, 2015

Social media marketing and content marketing: two recent additions to marketing jargon that already seem passé. At least for marketing today. In reality, most organizations are still trying to get their heads around the role of social and content in a customer-centric context.

Customer-centric means focusing on the journey, life cycle and total lifetime (value) of individual customers. They are fed up of being seen as just an email address on a list, continuously experiencing poor customer service as covered in my previous blog post.

Despite the promises of CRM and marketing automation, we are often confronted with a reality where we have a single customer view but we fail to act upon it. Digital marketing transformation will enable us to act on our knowledge by organising ourselves around our customers.

Digital marketing transformation and the digital customer experience

While content marketing has been the buzzword of recent years (and it’s still important as I’ll cover in a future blog) the words on everyone’s lips in 2015 will be: data-driven marketing, digital marketing transformation and customer experience.

But what is digital marketing and why does it matter? If it’s important, where does it fit in our never-ending efforts to create business and customer value?

It is worth clarifying that digital transformation happens across the entire organization. It shouldn’t be confused with digital marketing transformation that only affects one area of the business – even if, ideally, other business areas like customer service, product development and IT are involved.

The core focus of most digital marketing transformation projects is the digital customer experience (see previous blog post). Take a look at the research from the Altimeter Group or read a blog post from Brian Solis on the topic: Digital Transformation Starts with Reimagining the Customer Experience. The title leaves little room for interpretation.

The CMO and digital transformation: what a difference a year makes

Why have CMOs across the globe suddenly felt the need to transform their marketing operations, teams and processes? At the end of 2014, an article on Adobe's asked whether 2015 would be the year of digital transformation (for CMOs). And what has turned out to be a major priority for CMOs this year? Exactly. The author of the article, which is based on interviews with leading CMOs, emphasized that the phrase “digital transformation” didn’t come up at all in interviews the year before.

What a difference a year makes.

Could it be that CMOs were at risk of being left behind in the big digital transformation picture that is currently sweeping through organizations? Well, that's what Accenture found in its 2013/2014 CMO Insight survey. Although CMOs recognized the importance of digital transformation and digital business, it turned out CMOs were barely visible in the whole process.

Earlier research by Accenture and The Economist Intelligence Unit, surveying C-suite executives, found that 2-3 years ago (a long time in the current economy) 52% of C-suite executives "expected digital to cause significant change or complete transformation in their industries". Asked who was going to manage this change, only 1% (yes, one) claimed that the CMO was taking responsibility for digital transformation. As a matter of fact, digital transformation was deemed so important that 35% of C-level execs thought the CEO had to bear responsibility. The CTO was mentioned in 23% of the cases, the CIO in 22%. And then there are all these new roles that have popped up, such as CDO (Chief Digital Officer), challenging the CIO, CMO and any other CxO in an organization where the digital “mind-set”, or at least digital maturity, was and is absent.

Admittedly, the report only looked at digital transformation in a broader context, yet it's interesting to see how much has changed in just one year, and how new and existing roles (including the CDO and CIO) are entering the digital marketing transformation challenge. However, in the end, it isn't that surprising: never before has the link between technology, customers and marketing been stronger and more visible than it is today. In spending, roles and “ownership” as well.

Digital marketing transformation in practice: cause, consequence and lessons

I still haven't answered what digital marketing transformation truly is or why it matters. We have only seen that it does matter in the eyes of the CMO and C-level execs.

Digital and integrated customer-centric marketing pioneers and best-in-class practitioners will (hopefully) agree when I say that, for many organizations, digital marketing transformation is about catching up with the reality of today’s customers, marketing and business.

When we remove the buzz, here are the priorities, evolutions and lessons of digital marketing transformation:

Close the customer disconnect today

Do you remember when we first said that marketing was broken? It was just a few years ago, when social media first popped up, customers became even more “empowered” (social was just another catalyst) and the need for customer-centric and omni-channel marketing was clearer. We had lost touch with our customers. My previous blog post on the digital experience explains that the customer disconnect still exists. And it’s no secret that these discrepancies are even higher in slow moving industries. Often we just undertake (digital) marketing transformation projects to adapt, react and catch up with the competition. But, while digital marketing transformations should aim to proactively adapt to at least close the customer disconnect, we should remember that it’s organisations going through the digital transformation, the customer already lives in a digital reality.

Measure across the board or perish

Several years ago we published a book on ROMI (Return on Marketing Investment), also known as marketing ROI. It was clear that the demand for a more consistent way of measuring the impact of marketing efforts was growing fast. It was equally clear that ROMI, in the form of "balanced" forecasting, was slowly gaining acceptance. Yet, at the same time there was a lot of reluctance. The idea of ROI, which is essentially a financial parameter, and accountability didn't seem to fit with the view of marketing as creative and emotional given its strong branding dimension. However, as the demand for accountability in a data-rich marketing and customer reality keeps growing, digital marketing transformation needs to have a strong measurability component, which it usually does. It's important to remember that neither marketing nor customer behaviour are exact sciences and that the goal of a ROMI approach is to balance investments (lower risk activities with more predictable outcomes, higher risk activities with potential big gains or small losses etc.), and not kill creativity, innovation or “gut feeling”. However, to stand a chance in the inevitable digital transformation reality, CMOs have no choice but to follow this trend.

The analytical skillset marketing needs

Strong skills in analytics, measuring and forecasting are needed if marketing wants to remain relevant. This is spelt out in CMO surveys from around the world. To give just one example: the 2015 edition of the CMO Survey from Duke University’s Fuqua School of Business and McKinsey (US data) shows that 61% of CMOs feel pressure from their CEO or board to prove the value of marketing. More importantly: 58% of respondents state this pressure is increasing. And the other 42%? Pressure remains the same. In other words: it's clearly not decreasing.

Yet, what do we see a few slides further? The results show that most companies don’t evaluate marketing analytics and the majority haven’t been able to show the quantitative impact of marketing spending in the short term, let alone the long run.

From campaign to continuum

The days of a pure campaign-centric mentality are over. No more isolated activities or linear models from campaign to lead to customer. It's all becoming a continuum. Always on. Or as our client Telenet calls it: 365 communication.

People lead the dance of digital transformation. They are the ones embracing new technologies and devices. They are the ones displaying behaviour where they seamlessly switch from channel to channel. And they are the ones calling the shots. As marketers, how we engage our customers is increasingly defined by what they seek or how they want to interact at any given time. In marketing, we like to focus on the importance of omni-channel marketing. But the reality is that customers are channel-agnostic and this isn't new. With the increasing importance of mobile, customers are blurring the lines between the channels as well as the lines between digital and physical.

A very refreshing read on this topic comes from B2B marketing expert Ardath Albee who explains the continuum experience in her book Digital Relevance. A recent blog post has an even clearer title: Why B2B Marketers Must Kill the Campaign.

The real-time economy: a reality

Is the real-time economy real or just another fad? Real-time optimization, real-time data, real-time service, ... In many areas of business and marketing, as well as in customer expectations, real-time is far from a fad.

A few years ago, research by Experton Group, commissioned by Cisco and BT, indicated that 76.9% of responding business executives was in high or very high agreement that the ongoing shift towards the real-time economy affected their business processes. The key driver? The increasingly mobile lifestyle of employees and customers who want access to information right here, right now.

This real-time reality drives transformation and at the same time is driven by it.

The critical role of information and content

Future blog posts will cover topics such as data-driven marketing, actionable customer data, business alignment, leadership, personalization and humanization. As you can see, there is a lot more to say about digital marketing transformation. Instead of focusing on technology here, I would like to turn your attention to the crucial role of information to wrap up this article.

It's not a coincidence that I mentioned content marketing and social media at the start of this article. We're living in an information economy and have been for quite some time now. And we're gaining more data than ever before on our customers, interactions and behaviour.

When we put the customer in the centre of an integrated marketing approach, remembering the continuum, information then becomes the cornerstone of the following digital transformation steps. Many executives see sales, marketing and customer service merging in the near future.

Access to the right content (as it's called in content marketing) and to the right information (as it's called in information management) at the right moment, in the right way etc. becomes a key differentiator for customer experience, sales, customer service and marketing.

From catching up to being proactive: beyond SMAC

While we are still coping with the impact of what some people call SMAC (social, mobile, analytics and cloud) and others call the third platform (cloud, mobile, social, big data, ...), artificial intelligence (AI) is turning into a core transformational driver for the years to come. It already is in many ways – just think about predictive analytics. But it will show its true potential in the aggregation, understanding and resulting actions of a process-related approach within the context of ever more unstructured data and unstructured communication channels (such as social and email).

Technology and marketing will continue to merge with AI in one dimension, the collaboration with IT and the CIO in another and the power – instead of the challenge – of shadow IT as an enabler.

In the middle of it all? The customer, of course. The key question: is marketing ready to close the existing gaps, embrace the inevitable technologies such as AI and, ultimately, proactively adapt instead of catch up?

This blog post is part of a series, based on ongoing conversations with Jean-Paul De Clerck, one of Belgium’s leading marketing & business consultants.

Erwin Jansen