The CMO's Curse
Friday, November 21, 2008 at 10:57PM Silos within the corporate universe represent the CMOs' greatest challenge according to David Aaker's new book "Spanning Silos, The New CMO imperative."
This problem is hardly new, but the need to work successfully with silos will make or break any CMO.
Of particular interest is Aaker's section dealing with IMC or Integrated Marketing Communication that was announced in 1972 by Y&R CEO Ed Ney. He stated that the firm would create a team of specialists with the mission of leading the integration of general advertising, PR, sales promotion and direct marketing strategies providing a team approach for solving client communication needs.
Aaker believes the IMC challenge applies equally to internal marketing integration efforts.
As a silo leader for direct response in several national general agencies, I concur with his assessment that these efforts have mostly failed.
Aaker's analysis includes three primary causes for this conclusion.
1. These agency silos compete for resources "each believing that its approach is the most effective."
Working in these environments for over thirty years, I can confirm that marketers tend to recommend what they know rather than what is needed.
2. Another barrier to successful integration lies within silo leaders who see the marketing landscape with different eyes and apply different performance measures.
For example, from my perspective, awareness proponents rarely quantify their performance based on the client's increase in sales as direct response people do. And PR professionals equate success with the space costs the client would have paid for equivalent exposure with paid advertising.
In fact, Aaker warns that successful teams must begin their efforts by agreeing on performance metrics to succeed in their purpose.
Clients want financial results, yet general agencies typically shy away from such rigid performance requirements claiming they do not control the selling environment to take on such accountability.
3. Leaders who provide strategic leadership at the required level are in short supply.
Why is all of this important?
Who can deny that more than ever the need for IMC has increased? "Reliance on mass media as the cornerstone of the communication program is fading."
The whole book makes deep observations about the problems CMOs must solve to achieve the demanding goals imposed upon them by their organizations' silos.
Silos are here to stay and are not in themselves inherently evil. They are simply a reality that usually stands in the way of brand cohesion and marketing leverage.
The book goes to great lengths to define the various roles CMOs can play to successfully accomplish their missions. With meticulous research, relevant examples and actionable recommendations, this book will earn the respect of CMOs who want to improve their companies' loftiest goals. I recommend it highly to new as well as seasoned marketers regardless of industry.
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Reader Comments (4)
Great insights, Ted. To overcome the silo problem, the CMO should start with the overall marketing strategy/campaign concept, then challenge each subgroup of the marketing team (internal and external) to come up with metrics for how their branch/division/whatever can show that they are supporting that strategy.
I think key in this effort is that it is better to have fuzzy/unproven metrics that support the broader marketing strategy than well-defined/established metrics that don't.
Great post, Ted.
I have to disagree with my friend Morriss, though.
I think the performance measure issue is at the heart of the problem. It's a major cause of the misalignment between the various areas of marketing. And worse, it's transparent to the rest of the organization.
Non-marketing execs wonder why marketing is spending money on PR vs. DM, or on sponsorships vs. advertising. While DM is held to an "incremental ROI" hurdle, advertising is claiming success based on awareness.
Until the CMO holds all of marketing accountable to a consistent set of performance metrics, the silo problem won't be solved. Fuzzy, unproven metrics exacerbate the problem -- not fix it.
I will say this, though, Ted -- I don't see this happening any time soon in a lot of big firms. And the reason is that, often, the CMO comes up from the advertising silo and doesn't have a very strong grasp on marketing measurement.
If I were the CEO in these firms, I'd have the CMO report to the CFO.
These two responses demonstrate that if we can’t agree on the evaluation criteria, then the effort is doomed to failure at the get-go.
What is the purpose of spending money on ANY advertising effort if it’s not to make money, acquire market share or get more investors to put more money in the company?
If that holds true for the majority of advertisers, then how do we know if we have succeeded if the team does not agree on what success is?
Many goals are so nebulous that regardless of the result, the advertising success and budget allocations become a popularity contest where marketing automatically gets cut. If we can’t prove it worked, then the only way to be sure is to save money by cutting the marketing budget. Any savings go directly to the bottom line.
This is not shortsightedness on the part of the CFO or CEO. But the absence of a clear and persuasive rationale for spending money on marketing.
In my opinion, that’s the number 1 problem advertisers face. The lack of metrics and objectivity when it comes to advertising.
Until we can agree on the problem, then we cannot fix it. The hypothesis that advertising makes money and becomes a wise investment requires PROOF.
So I can only conclude that the real solution requires a “prophet” marketing leader. We need someone who can bring sanity to the mess we have created persuading ourselves that creativity or something “new” somehow equates success.
Nothing could be further from the truth.
I just did a great project for a client where we promoted an Organizational Project Management Maturity (OPM3) model. And from that I learned how important it is to align your business teams, projects and project portfolio with corporate strategy. It can make or break a company. For more info on OPM3, you can visit the Project Management Institute's website. VERY interesting stuff!