The Best of Times and the Worst of Times
While not as seasonally appropriate as his A Christmas Carol, the line below from Charles Dickens’ A Tale of Two Cities captures much of the sentiment surrounding the choices and compromises facing Chief Marketing Officers today:
“…It was the season of light, it was the season of darkness, it was the spring of hope, it was the winter of despair.”
So it is and so it goes for marketers across industry and category currently tasked with driving profitable growth amidst economic, and consequently marketing resource, contraction, and price inflation, while being simultaneously expected to plan for the unknown, react in real-time to the unimaginable, and manage a complexity of (often) less-than-marketing-savvy CEO and CFO relationships.
Knowing this might seem more like the worst of times than the best of times, 20 of the world’s leading CMOs gathered (physically and virtually), under Chatham House Rules, to discuss the incremental pressures, constraints and, yes, also the opportunities presented by current macro-economic environment.
Preceding the CMO conversation, the CMOs were joined by four panelists:
· Katie Couric, the legendary journalist, now founder Katie Couric Media
· Jeffrey Katzenberg, the legendary Hollywood exec, now co-founder WndrCo
· Bill Ready, the CEO of Pinterest
· Anton Vincent, the President of Mars Wrigley, NA
Each provided insights and perspectives on the record and their quotes will thus be attributed, while the CMOs’ will be veiled.
Forbes was invited to co-moderate this conversation by Nadine Dietz, a CMO-community stalwart, and the GM of Marketers That Matter. I’ve tried to capture the conversation not as a chronological play-by-play but considered as a whole. The unfiltered 2-hour conversation covered a lot of ground, most of which fell into four broad categories:
- Marketing’s Moment
- What Marketing Can’t Compromise, Even Now
- Brand Growth Drivers
- Measurements (and the absence of same)
(Note: Some comments have been edited for clarity and brevity.)
1. On Marketing’s Moment
“These are moments when there's an opportunity to differentiate, to stand out. This is marketing’s time, the CMO’s time.” ~ Bill Ready
A years-long domino effect of social and humanitarian crises is now exacerbated by current and/or looming economic threats and headwinds. Hiring freezes, reductions, and layoffs at companies ranging from Disney, Meta, Amazon, Cisco, Google, and Intel, and cost-cutting at countless more, find we the people, anxious, stressed, and worried about paying our bills and losing our jobs. And despite recent 3rd Quarter economic data showing that consumer spending increased 1.9%, corporate profits declined 1.1% Q/Q, and as anyone with a 401K knows, the market has not been the source of many good tidings.
Obviously, these are tough times for people, and is the context in which marketers market. Because no matter what you’re selling—and I use “selling” and “marketing” interchangeably—regardless of product or service, to individual or enterprise, no matter if the purchase price is measured in time, dimes, or billions of dollars, we’re all selling to people. As obvious as this may seem, it’s something we too often lose sight of.
But if, as Stanford Economist Paul Romer said in 2004, “a crisis is a terrible thing to waste” then there is good to be found, made, marketed and done—not just despite this context but because of it.
Katie Couric: It's not just an economic crisis we're confronting, it's a crisis of confidence. Climate change, unprecedented mental health challenges, financial worries, automation, a changing workplace, polarization. Many people are feeling lost, powerless, and anxious. They’re desperately seeking positivity, optimism, and hope that we can individually and collectively make the world a better place. It's a great opportunity to really emphasize our individual and collective humanity.
“Marketing is uniquely positioned to deliver optimism and needs to keep celebrating.” ~ Anton Vincent
Anton Vincent: This is a new upside-down world that (people) don't really understand how to navigate. I think where brands and people who run brands come in is to bring some normalcy to this. Brands have power. Brands can inspire and brands can get people through very tough situations.
Bill Ready: People are looking for places of hope, bright spots, reprieve. They’re trying to figure out how to address all the feels they’re feeling. Having built though a few downturns, often the perception is it’s like the Super Bowl for the CFO, their time to shine. (But) I don’t think it’s the CFO’s time. This is marketing’s time, the CMO’s time. These are moments when there's an opportunity to differentiate, to stand out. CFOs are giving out constraints, it’s marketing’s job to inspire.
Jeffrey Katzenberg: If you look at the bubbles and the bursts that have happened historically in Silicon Valley, almost without fail, the greatest companies were birthed out of moments of bursts, where suddenly people had to get super innovative and much more creative and were being held to a much higher standard to be able to go pursue that dream. That’s a good thing, not a bad thing. That's the silver lining that I think we will see particularly here in this world in the next 12 to 24 months.
CMO: (People) expect brands to demonstrate that we get it...that we understand the cultural context in which you market and show up not just with strength and confidence, but empathy and vulnerability. (In times of discontent) it’s about showing up as who our customers need us to be.
2. On What Marketing Can’t Compromise, Even Now
In today’s economy, enterprises large and small are preparing for the bad, if not the worst. The first areas a CEO and their CFO tend to look to cut costs is OPEX (operating expenses) in particular, marketing and headcount. And sometimes this is done irrespective of whether the longer-term consequence of these “savings” exacerbates the negative by mitigating investments in growth. As one CMO put it (reflecting the thoughts of many) “we shouldn’t have to be defending marketing.
Strategy is always a process of continual compromise and choice, even in good times But when OPEX gets cut and scarce resources become even more so, incremental compromises are inevitable. Despite this, and maybe because of it, the conversation among the panelists considered what can’t be compromised even in this economy.
“You can trim around the edges, but the core values of a company, that they care about more than just the bottom line, that they stand for something, can’t be compromised.” ~ Katie Couric
Couric: Standing for something can’t be compromised. A brand's north star, trust and authenticity are non-negotiable. Societal leadership is now a core function of business, and CEOs are expected to shape conversations on and about these important issues. That's non-negotiable. You can trim around the edges, but the core values of a company, that they care about more than just the bottom line, that they stand for something, can’t be compromised.
“Customer engagement and service have gone from essential to existential. “~ Jeffrey Katzenberg
Katzenberg: Customer engagement and service have gone from essential to existential. And the degree to which you under deliver is the degree to which you put your product, your company, your culture, your brand, in jeopardy. And when you have economic headwinds, (you have to understand) how you bring these in line with rest of the business without undercutting the very fundamentals that drive it.
Vincent: As a marketer, if you're on the demand side, part of the job is (that you) own the growth agenda regardless of circumstance, economic, social, what have you. Marketing remains uniquely positioned to drive this.
3. On Growing a Brand
“Nothing I run will ever be as big as the right (or wrong) product or policy decision.” ~ Anonymous CMO
The drivers of brand growth don’t change because of macro-economic circumstances, and marketing remain a mix of ingredients, art, and science, either adding up to why people buy—or not. But economic pressures often increase a quarterly and short-term focus that can fly in the face of long-term brand health and, consequently, business growth.
But like creativity, strategy too loves constraints. The CMOs made points about the ensuring they’re marketing internally as well as externally, a POV that any marketer would do well to keep in mind. Among the thoughts shared by different CMOs:
· “Brands are built (or torn down) by all parts of the organization, not just marketing,” even if marketing is often held singularly accountable for same. The CMO may be the principal brand “steward”, but they are not its sole proprietor. (It’s thus incumbent on CMOs to) “help the executive team realize they too own the brand, because brand is on the balance sheet, but marketing is not.”
· “Everything is the brand – the product, the marketing, the values, the people, the product. Let’s not walk ourselves into a narrow corner in defining all the work we do and the value it creates.”
“We shouldn’t have to defend marketing.“ ~ Anonymous CMO
· “CMOs need to be brutally honest and open (with internal stakeholders) about what you’re doing, why; about what you’re getting and why or why not.”
· “There’s a difference between getting to the value of a brand and measuring the impact of brand marketing. They're two totally different things and we conflate them all the time.”
On the CMO’s role as strategic architect:
“The role of the marketer isn’t just as storyteller but as truth seeker and truth teller.“ ~ Bill Ready
Ready: The role of the marketer isn’t just as storyteller but as truth seeker and truth teller. CFOs are under tremendous near-term financial pressure while product teams can stay wedded to ideas that aren’t working for too long, often struggling with calling their baby ugly. I look to marketing to be the check and balance. The CMO needs to know what’s working, what customers want, and to own the customer voice.
On taking risks, even in risky times, and the “permission to fail”:
Katzenberg: If your ambition is to do things that are unique and original, which has always been my north star, that equals risky. If you’re going to do things that are risky, it means from time to time, you’re going to have failure. If you take the permission to fail out of the equation, you won’t take risk and won’t do things that are unique and original.
4. On Measurements
“I’m measuring the wrong things, but I don’t know how to measure the right ones.” ~ Anonymous CMO
You can’t have a conversation about “brand” among CMOs and not wind-up discussing measurement, for reasons both good (impact and efficacy) and bad (not everything that drives profitable growth and value—near or long-term—is as quantifiable as one might wish.) As one CMO put it “it’s an age-old conversation and we’re still having it.”
Despite having more tools for discerning results than ever before data remains imperfect, not everything that can be measured should be, and not everything that can’t be readily measured or attributed is without material impact. Among the points made:
· “Heading into more uncertain times, there's more pressure to show short term impact on long-term strategies (often self and strategy defeating). And if long term initiatives don't show short term impact the reaction is, ‘oh, it didn't work.’ That's not necessarily true…and contributes to a need to keep reinventing the wheel.”
· “The CFO and organization are impatient for short-term impact from long-term strategies. But the ‘brand vs performance’ conversation is getting in the way of both…the CMO/CFO relationship is far more adversarial than it needs to be.”
· “We struggle most with the time horizon (for showing) brand results. The pressure around this is mounting as we head into more uncertain times...and the time horizon is also unique for each company. Fast-food has way more at-bats to show impact—365 days of potential dining—than does buying a car.”
· “We launch a lot of minimum viable products and then iterate and learn. I don't see the same (C-suite) appetite for iterating and learning on the marketing side. The language that's used is much more punitive. I’m working on changing the conversation and explaining when we expect to see (results).”
“Does anyone really believe decisions are singularly made in that last second, and last click? But that’s what gets measured.” ~ Anonymous CMO
· “We keep stressing to our CFO/CEO that if we’re using search to introduce ourselves to customers, the only levers to win with them are usually cost and shipping. So, it’s a race to commoditization if we don’t win before search.”
Bill Ready reinforced this point adding: (a CFO thinks) I'll cut the brand marketing and go all-in on performance marketing, because these are different things. But they’re not. Performance marketing in e-commerce tends to be low funnel, like price, and shipping speed. It's a commodity. You’re not telling your story, you're not standing out, you're not differentiating (in the upper funnel) before it's a commodity moment. There are now ways to do upper and mid-funnel marketing that drive performance. Missing those and going all in in last click runs the risk of reducing yourself to a commodity.
(Editor’s note: aware there is some redundancy in what follows, it is left to illustrate the commonality of challenge and concern.)
· “How do you measure the negative impact of not doing something? That right now, there's an invisible anchor on your business, which is people not coming to you because they don't feel included or represented (by the brand). How can you measure this?”
· “At times it’s easier to show value when investment is stopped…we’re off air, we pull back on levels…and we see the numbers change, which then gets the attribution credit of "oh, I guess that was really important."
· “I'm very clear on our purpose and its value, but how do you measure that and show the CFO?”
· “The impact and consequence of stopping very important brand work seems to show up in the numbers sooner than the magnitude of doing the work in the short-term. Sometimes the value of purpose is proven, and/or the value of it recognized, by its absence not its presence.”
…
Whether this is indeed marketing’s time, as Bill Ready suggested, depends not just on the time but the marketer, of course. One can hope, and the hope isn’t just for the marketer but the brands and businesses they help steward as principal strategic and financial architects.
Like no other position in the C-suite, the CMO’s has been challenged and evolved by an avalanche of changes big and small. They are expected to decipher, deploy, and react to these in real-time, all while planning for 3 years from now. Theirs is the hardest job in business today. And while good marketing has always been hard—and great marketing harder still—this has never been more so—at least until tomorrow.
Which leads me to something Jeffrey Katzenberg said about the culture of Hollywood, that’s not always so different from the culture of marketing. “In general, it’s very punishing. Failure is very public; schadenfreude seems to rage in the streets of Hollywood. But I saw a great word the other day, freudenfreude, which is happiness for somebody's happiness.”
Here’s to more freudenfreude, all day and every day, but in days like these for CMOs and their teams, in particular. I think even Dickens would appreciate the sentiment.
(For those interested in listening to the audio of the conversation with the four panelists, you can find it on Spotify and Apple.)
