WFA sends a monthly newsletter on its priority issues to over 6000 contacts. Sign up here, free of charge.
Produced with the help of The Economist Group
In Cannes this year, The World Federation of Advertisers, with the help of The Economist Group, talked to a number of CMOs about their priorities and challenges and how they are facing up to them. Here are the distilled insights from these filmed conversations. The interviewer was Andrew Palmer, Business Affairs Editor at The Economist. The interviewees were:
While most CMOs tend to cite the need to drive top-line growth as the primary objective of their function, their priorities for how to achieve this differ between the inter-related challenges of recruiting the right talent, driving the organisation’s digital transformation and trying to foster greater emotional brand engagement.
The priority most often mentioned is digital transformation since it affects so many areas of every business, ranging from the marketing challenge of ensuring creative messages are designed for and work on smaller screens, through to the more fundamental ways that consumer behaviour is changing and disrupting every business.
“We’re seeing like everybody the digital world is transforming and disrupting our business. For me disruption brings opportunity. At the top of my in-tray is digital innovation. It’s driving over 100% of our category growth in many of our segments and we’re extremely excited about the opportunities it gives us.” – Jane Wakely, CMO, Mars Pet Nutrition
Digital also raises the bar on talent, requiring marketing teams to be experts in more areas, often areas that require contrasting skill sets. Today’s brand managers not only need the skills of a general manager but also need to be experts in digital, data, financials, PR and communications.
For many brands, these talents need to be applied to the challenge of building emotional engagement and transforming what have been very functional brands. Digital transformation could give them additional tools to become part of consumers’ lives throughout product lifecycle, thereby enhancing chances of repeated success when the next purchase moment occurs.
A key part of the digital transformation debate for many CMOs will be how much of the job stays with partner companies and how much comes in-house. There is some serious strategic soul searching going on about where skills such as data, analytics and attribution modelling should sit.
One thing that will help brands decide where the boundary between buying-in expertise from people who live and breathe a particular area or having it in-house will be whether that function is determined to be core to their business and whether they can create distinct intellectual property or advantage from owning it.
“Marketing in a mobile-first world, the whole move to where everyone having iPhones and being on them all the time… People aren’t just watching TV anymore, they are on their phone and you have to get the creative communication right for a small screen. That’s where I’ve been focused in the last 18 months.” – Ian Wilson, Senior Director Global, Digital and Marketing Development, Heineken
Many CMOs openly welcome the new EU General Data Protection Regulation (GDPR) since the principles on which it is founded aim to give consumers greater control of their online data – something they believe will enhance consumer trust in digital marketing in the long term.
By putting consent at the heart of communications, being open about what they are asking for and prioritising some sort of value exchange, CMOs envisage a bright future in terms of being able to foster a greater understanding of their target audiences in a permission-based environment.
“The key thing is you need to be very transparent with the consumer. Get their explicit permission. Don’t do anything sneakily, you have to respect the privacy of the consumer. And if you’ll outline the principles GDPR lays out, […] as a consumer you’ll think it’s absolutely fair and the right way to do it. So now when you turn around to be a marketer, that’s exactly what you have to respect. When you say customer is the king or the queen, you respect their wishes.” – Raja Rajamannar, Chief Marketing & Communications Officer and President, Healthcare Business, Mastercard
But with opportunities come challenges. Knowing what football team a person supports can open the door to a meaningful connection but sending someone a reduced offer on a car which they’ve just bought for more money will likely slam it shut.
Smart targeting, often linked with other channels, can create benefits for both sides through chances to target consumers at much more relevant moments – for instance, when a money off voucher is likely to be welcomed rather than annoying.
The danger with data-driven marketing is that too many brands will decide to use it simply to drive short-term ROI, rather than getting the balance right between brand and sales. This is something that everyone will have to work on getting right in the years ahead.
“People post for free, they tweet for free, they use Google search for free. None of us want to pay for it but what is the data exchange here? I could see a two-tier internet, where if you choose not to share data or if you choose not to have advertising you pay for the services. Let’s look at TV: you can have adverts, you can buy Netflix.” – Keith Weed, Chief Marketing and Communications Officer, Unilever
CMOs need to work together to put more pressure on the big tech companies to ensure they take action on the things that they care about. The WFA’s Global Media Charter, Procter & Gamble and Unilever’s public statements, as well as efforts by local advertiser associations are all important in this process to change the whole digital advertising ecosystem.
CMOs want recognition that these businesses – Google, Facebook and the like – are being built on advertising investment.
The number one issue for many CMOs is brand safety, that is, not having your ads appearing next to inappropriate content – and both marketers and platforms need to up their game. Different approaches have been taken. More than 250 advertisers stopped advertising on YouTube last year and many have worked closely with Google to put in place extra safeguards to ensure their ads appear around properly reviewed content.
“If you look at the brand safety metrics that they apply, this is a bit like if I got on the plane and somebody said, ‘Listen there’s a 10% chance it’ll crash but don’t worry, 90% of the time it’s fine’. I think for brand safety that’s completely unacceptable.” – David Wheldon, CMO RBS
Even though the number of inappropriate placements might be small, it’s still too many and the response from many CMOs has been to control much more tightly where their ads go and create a cadre of trusted media partners on platforms such as YouTube.
While it’s recognised that Google’s efforts in automating the assessment of content have come a long way in a short space of time, what’s much more important is the shift in mindset by both Google and Facebook. No longer are they denying that they have a responsibility to police the content that appears on their site. Instead, they are managing content, which is to be welcomed.
Greater transparency is also a common CMO refrain. One CMO quoted WFA figures suggesting that of a hundred dollars spent online, only $28 ends up as ‘working media’. Brands want to know more about how their ads performed and how each stage of the digital supply chain takes a cut from their investment.
Marketers also hope consumers get greater clarity over the fact that they are trading their data for access to services. That is an essential element of the bargain and ensures that digital advertising continues to be sustainable.
“We’ve established a very high standard for what we call our trusted market place, which is we work with the partners that we feel like can meet our standards […] I think by having a narrower band of partners we have a better chance of our ads being viewable, safe and all the things that we think are important.” – Syl Saller, Chief Marketing and Innovation Officer, Diageo
The future of the agency model
The central element of any relationship that CMOs have with an external partner has to be trust and transparency. Only then can the opportunities of seamless working and partnership be fully realised.
CMOs want agencies to stay at the cutting edge and leverage the best of what is available or coming down the pipe but they also need them to revamp their internal structures to deliver thinking, ideas and work that is not incumbered by internal P&Ls or Holding Company arrangements. One CMO mentioned that rather than Holding Companies, they should really be called Enabling Companies.
“Agencies have to look at their own internal compensation system and where there are blocks between people sharing ideas between offices, they really have to rip those down because that’s a problem. That’s a real barrier for us.” – Syl Saller, Chief Marketing and Innovation Officer, Diageo
The scale of disruption is such that agencies need to change both their creative capabilities and their media approach. Without this kind of reinvention, brands will do more in-house.
On creative they need to adapt to a new storytelling narrative that puts the brand at the front of the story, rather than waiting for a big reveal. On media they need a much more data-driven approach, rather than the old model built on relationships and buying inventory at scale.
When CMOs and marketing organisations do dive into the media and technical aspects of digital media they can find that even simple issues such as frequency capping, CPMs and viewability are often not correct.
“The media companies are not set up for data-driven […] the more we get into doing this ourselves, the more we check what they’re doing and we find things that don’t make us happy. Simple things like getting frequency capping right, getting the CPMs right, viewability…we don’t feel they’re on top of the game as they should be.” – Ian Wilson, Senior Director Global, Digital and Marketing Development, Heineken
Such findings are encouraging more brands to do more in-house, building databases, analytics and insight capabilities that enable them to book direct in the digital space wherever they have the right resources.
“One of the things that we demand of agencies is that they stay at the cutting edge and leverage the latest and the best of what is available or what is coming down the pipe so that we are benefitting in our creative development in our media placements.” – Raja Rajamannar, Chief Marketing & Communications Officer and President, Healthcare Business, Mastercard
Gender and diversity in the industry
There is a moral imperative for brands to promote gender equality and diversity not only across the marketing industry, but to society at large – recognising the role that marketing can have in depicting a world that is fair, diverse and progressive. CMOs also recognise there are huge economic advantages too.
Analysis by Unilever has found that its ads that are perceived as progressive are 25% more effective in terms of impact and 18% better when it comes to purchase intent.
For some CMOs it’s time to change this debate from ‘what’s wrong with marketing’ to ‘what are the benefits of getting this right’, boosting gender equality for women but also promoting the benefits that men too can derive from a more equal world.
“I want people to understand why stereotypes are bad, I want people to understand the power of women in leadership, and men need to come along with us.” – Syl Saller, CMO, Diageo
Doing this means changing both the work that the marketing industry produces and also updating the staffing ratios at advertisers, in agencies and production houses. Both measures will help address the unconscious gender bias that everyone brings to their work and it’s essential that brands consider their stories in detail to ensure they treat women with the respect and dignity that they deserve.
It means asking detailed questions about how women are portrayed in content, whether they have a real depth of personality, whether they lead – or are led by – the narrative. Brands need to ask whether the women in the content look and behave like real women in the real world.
“It’s not just how many women [are in the ad] but actually what sort of women and how are they portrayed, and do they represent the reality of women in the real world […] Everyone just wants to see the real world portrayed in our content.” – Grainne Wafer, Global Brand Director for Baileys
Companies will develop their own filters for testing creative but the best one of all is to ensure that women have senior roles across the creative process, as senior strategists, chief creative roles and content directors.
“Over the last 24 months in our marketing department we went from 20% female in top leadership roles to 50%. In chief creative and chief strategy roles, we went from zero to 52% in our top five agencies around the world and on the production side we went from zero campaigns developed by female directors to 59%. Overall it has resulted in very strong business results.” – Antonio Lucio, Global Chief Marketing & Communications Officer, HP
But diversity goes beyond just a case of making sure men and women are treated with respect. It’s also about recognising racial and sexual diversity in the same way as well as the disability challenges that many face but are rarely accurately portrayed in marketing communications. Indeed, gender stereotypes are often intertwined with others about physical ability, race, ethnicity, sexual orientation, class and education.
Marketing with purpose
Purpose can be many things. It can be life-changing, environment-enhancing or it can be light-hearted. It can come from the brand owner or the individual brand. But what it must always be is authentic.
CMOs understand that a brand purpose needs to pass a strong ‘bullshit detector test’. It needs to be more than just sticking the badge on the side of a packet. It needs to be truthful to the way the brand operates in the real world and many CMOs felt that the best purpose needs to be close to a company’s core business.
“When you think about purpose, it’s got to be a really authentic and part of the brand. There’s a lot of talk about purpose, brands with purpose, brand with meaning, brands that matter and it’s dangerous territory if your interpretation of that is I get an NGO and put a badge on the side. Greenwashing is the worse we can do.” – Keith Weed, Chief Marketing and Communications Officer, Unilever
It’s true that you can’t please all the people all the time but if your purpose is authentic to the brand and demonstrably reflected in the way it behaves then most people “will forgive you the odd stumble”, as one CMO put it. Brands should approach their purpose with humility because others will have strong opinions.
A real purpose also gives a brand a point of view and guides it as it navigates the world we live in. It helps CMOs decide where they want to take a stand, which battles they will want to pick, where they want to work together with peers in different companies with the same values and where they feel the brand has no equity in the argument.
“The most important thing that a company needs to have to compete today is a very clear and deliberate sense of purpose. Your purpose or your vision will set the parameters for which fights you want to lead on, which fights you want to fly as a flock and which fights you’re going to avoid.” – Antonio Lucio, Chief Marketing and Communications Officer, HP
Increasingly consumers, particularly millennials, are demanding that brands do stand for something and that means purpose will increasingly be backed into the core of most businesses.
“When you meet a person, you quickly come to a view of whether they are authentic or not by whether their actions match the words. I think no one responds well to a person that talks big and acts small and I think it’s the same for brand. If we commit to a purpose, we need to make sure that our actions really follow through.” – Jane Wakely, CMO, Mars Pet Nutrition
Are we witnessing the death of advertising?
Consumers receive more commercial messages than ever before. The constant demands for attention from brands have created an environment where many are switching off, literally via adblockers or opting for paid-for ad-free environments such as Netflix. One marketer mentioned that millennials “hate marketing in its classic sense”.
“Consumers don’t like ads […] For them it is an interruption of their experience […] Storytelling is dead, it’s all about story-making, which means give consumers experiences and they make stories of those experiences and they tell their stories to their network. It’s the old concept of word of mouth initiated by experiences and propagated through digital and social media.” – Raja Rajamannar, Chief Marketing & Communications Officer and President, Healthcare Business, Mastercard
This is a challenge recognised and accepted by CMOs, who have benefited from a huge range of new tools and platforms that not only enable them to reach consumers in new ways and gain access to creativity from all round the world, but also a faster-than-ever feedback loop.
“We’ve reached peak media or peak content. I really believe there is an opportunity to rethink marketing and advertising.” – Marc Mathieu, CMO Samsung Electronics America
Delivering effective marketing in this environment requires CMOs to demonstrate the impact that the marketing function can have internally and for society in general. It means building creative platforms and finding a creative tone of voice that appeals while also interacting in a respectful manner with consumers.
“Our consumer is our boss. Let’s not get distracted by all the change and instead keep at the heart where is our consumer, how are they acting, how are they behaving, it’s a very simple guide for we need to show up in the world and how we need to innovate in order to be relevant to them.” – Jane Wakely, CMO, Mars Pet Nutrition
There is consensus that the best way to do this is to put the consumer at the centre of everything marketers do. By understanding how consumers interact with the world and how their needs have changed and continue to change and then delivering on that they will be in the best place to add to consumer’s lives and build brand performance.
“As a marketer today, honestly, there has never been a better time. We have more options to reach our customers than ever before, we have more channels, we have more access to creativity from anywhere in the world […] As a marketer, I feel not only comfortable but encouraged by the times we live in.” – Antonio Lucio, Chief Marketing and Communications Officer, HP