Charles Darwin’s writing had a clear message for today’s marketers: evolve or die. And here’s how they need to evolve: start acting as if marketing is a business.
Business today is unprecedented in structure, organization and discipline. Companies excel by focusing on numbers and metrics, and gaining measurable competitive advantage.
Except marketing. Marketing is a part of business, yet it’s rarely operated like one. Business exists to make a profit, yet most marketers fail to effectively track and report on profit.
1. CEOs Don’t Trust Marketing
CEOs are increasing their pressure on CMOs and marketers to prove their financial value. In one study, 72% of CEOs say marketers are always asking for more money, but rarely can explain how much incremental business this money will generate.
2. Turn Marketing Into a Business
Marketers are finding themselves increasingly pressured to transform marketing into a business. And they know this – 63% of CMOs believe ROI will be the #1 metric for success, according to the IBM Global Chief Marketing Officer Study.
3. Financial Standards for Marketing
One reason measuring marketing’s financial performance has been difficult is lack of standards. Every business unit needs to track numbers and demonstrate it increases sales, cuts costs or both. Marketers increasingly need to show they’re moving the needle.
In finance, for example , GAAP and FASBE dictate clear performance standards. Marketing is one of the few remaining business disciplines with no universal performance metrics. But that’s changing with the advent of the Marketing Accountability Standards Board (MASB).
4. Marketers: Two Paths
Marketers today are evolving into a dichotomy with two wildly different groups. The smaller, forward-thinking group consists of modern executives who are elevating the role of marketing, and proving their financial contribution to the company bottom line.
These highest-paid, longest-tenured CMOs today are different from those of a decade ago. They’re focused less on art, and more on science, and report ROI to the CEO and CFO.
5. “We Increase Profit”
By turning to new marketing technology, these modern marketers can confidently look at executives and confidently say: “marketing will increase sales, cut costs, increase profit, or all of the above.”
6. Endangered CMOs
The other group measures marketing as it was a decade ago, with clicks and impressions. These endangered CMOs are uncomfortable talking about money. When pressed by CEOs for numbers, these marketers will respond with “our awareness and impressions are up.”
7. Short Tenures
Those vague answers will lead to an early exit from the company, and explain why the average CMO job tenure is the lowest of any C suite executive, about 50% as long as the chief executive average.
Conclusion – CMOs and marketers who run marketing like a business, as an investor and contributor to incremental profit, become indispensable partners to the enterprise, and will survive and thrive in the future.