Tuesday, November 05, 2013

The Challenges Facing Today's CMO

As was widely reported last year, Gartner's Laura McLellan predicted that by 2017, the CMO would spend more on IT than the CIO.

This has come up again in my thinking as a I have been doing some work recently for a client. I was struck by the complexity of the set of software tools available to the CMO. If we just look at content marketing, Curata recently published an interesting map of the associated tools available for that discipline:

Curata's Content Marketing Map (click here for a full size version)
Consider this complexity shown in the diagram for a moment. Granted, content marketing forms the foundation of most modern marketing campaigns, so this is a large part of the tool universe that the CMO has to worry about. However, this doesn't even address digital advertising, another major area of concern for the CMO. The map for the digital advertising toolset it equally as complex, including media firms, ad networks, targeting technologies, paid search and paid social management, etc.

Because of the movement toward everything being digital, the CMO is asked to manage incredible technical complexity. Even a smaller firm's chief marketer probably deals with at least a dozen different tools. At a larger firm, it can be far more.

So how is a CMO supposed to manage this technology complexity? The Gartner statement implies a comparison, or even a competition for resources, between a CIO and a CMO. But there is one major difference between the two: the CIO is a technologist, but that frequently is not true of the CMO. Although it is changing, the CMO's experience is built on branding, positioning, strategy, advertising, and many other tools, not necessarily on technology.

Purchase Risk

One of most challenging aspects of managing these large technology bases is reducing the risk associated with purchasing and integrating new technologies. The CIO and CMO both control very large technology budgets, and hence face significant risk when making the decision to purchase a new tool that may cost millions of dollars. How do they ensure that this new tool will work as advertised with the other tools they already own? How do they limit purchase risk?

The CIO has a couple of means to minimize risk:
  • Large tool providers with complete offerings, like IBM or Microsoft. These companies offer very broad product lines that are already integrated, so the CIO can confidently add new tools to her existing lineup.
  • Third-party VARs, integrators, and middleware providers. Because the IT software and services industry is fairly mature, there are thousands of third-party providers ready to step in to both help guide the purchase selection process and to ensure successful integration of the new tool.
Does the CMO have access to the same risk-reduction techniques? The marketing tools market is much younger than the IT market. Some tool categories are brand new (like content curation) and others are still rapidly evolving. There are few large providers that have complete solutions. Third-party providers are rare, and tend to take the form of marketing agencies that don't have much of a track record in technology integration.

Risk Abatement for CMOs

The marketing tools vendors are moving rapidly to address the risk issue. First, there has been a lot of consolidation activity as large enterprise software providers have made significant purchases in this area. Here are some examples:
  • Adobe acquired Omniture, Efficient Frontier Technology, Demdex, and Neolane
  • IBM acquired Unica, Xtify, DemandTec, and Coremetrics
  • Oracle acquired Compendium, Eloqua, Collective Intellect, and Virtrue
  • Salesforce acquired ExactTarget, Pardot, Buddy Media, and Radian6
Clearly, these companies are trying to become the same kind of full solution provider for marketing technology as they are for information technology.

Beyond acquiring companies for their portfolios, these companies are also establishing 'marketplaces' for third-party applications that work with and complement their solutions. These marketplaces include the Eloqua AppCloud and Salesforce AppExchange. While these marketplaces help reduce risk for the CMO by offering products that 'work with' the company's core offering, the products are not the same as a fully integrated tool developed by the company. (For an excellent article about third-party marketplaces for marketing automation, including a more complete list, see The emerging third-party era of marketing automation by Scott Brinker at Chief Marketing Technologist Blog.)

What's Next for the CMO?

While vendors are helping reduce the purchase risk associated with marketing technology, this is still just one aspect of the complexity facing the CMO. It's not likely going to be enough to make the 'traditional' CMO adequately prepared for the new technology environment.

A post on the Wall Street Journal blog speculated that this will mean the CIO may evolve into the Chief Digital Officer, responsible for not only a company's network, servers, computers, and productivity tools, but also for the digital marketing technologies. Maybe. But the CIO / CMO difference mentioned above has an important aspect: the CMO is a marketer, and that's not true of CIOs. So, can the CIO manage marketing automation tools for maximum marketing effectiveness? I'm doubtful. Another solution must be out there.

The need for a CMO grounded in marketing fundamentals is not going to change. Some CMOs may become comfortable with the new marketing technologies, but I don't know if that will be true of the majority. I also think that a Chief Digital Officer that combines information and marketing technology may work from a technical perspective, but someone still needs to ensure that marketing strategies are effectively implemented on those technologies.

I think we'll see a rise in a new set of executive titles, like VP Demand Generation, Chief Marketing Technology Officer, or, as Scott Brinker says, Chief Marketing Technologist. Marketing leaders in these new roles must be as much technologists as they are marketers.

(Image of digital marketing on chalkboard provided by KROMKRATHOG and traffic sign by mrpuen, both at freedigitalphotos.net.)

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