Marketing is more important than ever before in the increasingly complex and difficult organizational environment caused through continuous internal and external change. Globalization, the internet and the increasing availability of information have led to more demanding employees and customers. Customers are expecting progressively more customized goods and services, which means organizations are less able to forecast the direction of their markets. These factors have increased the cost and complexity of doing business and have put pressure on marketers to understand customer needs better, to secure greater profitability and to measure outcomes better than previously.
Many CEOs expect marketers to be strategists. According to McKinsey consultants, Chief Marketing Officers (CMOs) must address several other areas in addition to their traditional role. They should lead company-wide change in response to changing buying patterns, increase efforts to shape a company’s public profile, manage complexity, and build new marketing capabilities throughout the company as a whole in addition to increasing customer loyalty and retention.
However, most marketers have been heavily tactical and disconnected from the CEO agenda. Not all this problem lies with them, because in many cases leadership teams confronting organizational barriers often try to redraw the boxes and lines of their organizational charts. But that leads to incomplete solutions at best, because it risks simply creating new silos. ‘This is no help to CMOs,’ according to a 2014 Harvard Business Review article.
Five years later, CEOs are still turning to marketing to drive their company’s growth agenda, and they’re giving CMOs the opportunity and support to do so (McKinsey 2019 global survey). In the international survey, 83% of global CEOs said that marketing can be a major driver of growth. But only 23% of CEOs feel that marketing is delivering on that agenda.
Only half of the Chief Financial Officers surveyed said marketing delivers on the promise of driving growth. One former consumer-goods CFO said in their interview, “Under pressure, marketing gets cut first because it is the hardest to justify.” Forty-five percent of CFOs surveyed said the reason marketing proposals have been declined or not fully funded in the past is because they didn’t demonstrate a clear line to value.
In a 2007 survey, 2,000 executives were asked about the structure and practice of their companies’ marketing. The general response was that CMOs needed to ‘rise to the stature of C-suite players.’ Too many CMOs were not living up to their CEO’s expectations and needs. Too often, the marketing department’s focus had been poorly aligned with the CEO’s agenda. Weak information flow, functional ambiguity and leadership second-guessing have crippled the CMO’s influence. ‘The result? Failure to optimize the complex array of responsibilities needed to fulfill the CEO’s agenda,’ including:
These types of studies find that few of the issues important to CEOs were also the priorities of marketers. What’s worse is that marketers have not been able to talk to senior management in their language about the financial return on investment (ROI) from marketing. Marketers were still using ‘soft’ terms like awareness, cost per incremental volume, share of market, and growth. This has created pressure on marketing. What’s more, the McKinsey 2019 global survey showed ‘overall there is a massive talent gap: a whopping 82 percent of Fortune 500 executives don’t believe they recruit highly talented people.’
Does this discussion have a familiar ring? It does indeed! It sounds very similar to the travails of PR professionals. The opportunities are there if the PR head has sufficient capability. Surveys show that PR practitioners and non-PR practitioners agree that public relations is growing in importance, as discussed in this 2019 article by Dorothy Crenshaw. Also, a Muck Rack 2019 survey found 54% of executive teams are briefed at least weekly on PR and communications activities, with a little over 25% briefed on a case-by-case basis. This reflects trust in the PR role. Also, a 2019 CCI international survey found that ‘manager of the company’s reputation’ is the primary role of the head of corporate communication, with ‘counsel of the CEO…’ as the next most important role. A survey respondent commented that the communication role has ‘become an increasingly valuable partner..by bringing the stakeholder voices into the company.’
However, too many PR people still focus on the short-term tactical agenda to the exclusion of the longer-term strategic fundamentals. As a result, a high proportion of PR people are not aware of the priorities of top management and may find it difficult to justify the importance of their role to the organization in the long run. Despite successes in day-to-day activities like product publicity and event management, they tend to find that senior managers want more – they want a more strategic contribution from the PR area.
Further – too many PR people justify their efforts in terms of ‘soft’ measures such as media coverage, reputation and attitudes rather than ROI, stakeholder decision-making and behavior change, which is the hard-edged terminology used in the executive suite. A typical soft measure of PR success is the extent of positive media coverage. Good media coverage is all very well, but it gives no insight into actual customer decisions and actions because media are only a conduit, a means to an end; the media themselves are seldom key customers and decision-makers in their own right. Social media causes similar problems – volume of traffic and ‘likes’ don’t necessarily increase sales or profitability.
These leave PR pros very exposed to disdain and criticism from executives and consultants. For instance, a McKinsey 2007 article refers to the corporate affairs function typically reporting to ‘a corporate secretary.’ And also ‘most corporate-affairs executives don’t have the background to lead this type of [strategic] effort and therefore increasingly turn to their marketing counterparts for assistance.’ How condescending!
In recent years, great change has occurred at leading companies. The McKinsey 2019 survey found executives at these organizations no longer view marketing as bound by functions that sit in the marketing department. Instead, they think in terms of diverse areas of the organization – from sales and product innovation to finance, technology, and HR – participating in marketing’s success and see themselves as partners in its mission.
As head of marketing, the CMO has a crucial role to play in driving organizations toward this vision, and the stakes are high. Our analysis reveals that a marketing organization’s ability to drive growth depends heavily on the strength of the partnerships the CMO can forge across the organization.
This signals a great opportunity as a communication professional to strengthen your relationship with marketers in your organization. Better to hold your competitors, if not enemies, close! Establishing a strategic PR role and being actively aware of marketing plans will enable you to play a more effective role by insisting on being part of the marketing planning process from the beginning.
By Silvia Arto, Vice President of the Global Alliance for Public Relations and Communication Management, Chair of the European Regional
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