Inability to Tap Online’s Potential Frustrates CMOs

Discussion
Apr 21, 2009

By George Anderson

According to a survey
by Heidrick & Struggles International
and Digital Scientists last December, chief
marketing officers (CMOs) are extremely intrigued by the amount of information
available online about consumers. They are also frustrated by their inability
to do something more with it despite spending increasing sums marketing
online.

Interestingly, many CMOs see themselves as ahead of the companies when it comes
to digital marketing. Nearly three-quarters of respondents saw themselves
as “at the cutting edge” or “right
where they should be,” while 60 percent said their companies were
“behind the curve.”

“Companies
realize that they’re in the midst of digital man-to-man combat to acquire
consumer dollars, but they’re frustrated that they’re not very good at
it,” said Lynne Seid, partner at Heidrick &
Struggles’ Global Marketing Officers Practice, in a press release.

Many CMOs don’t
think they have been able to quantify and qualify return on investment
and other metrics for their digital efforts. Survey respondents rated analyzing
return on investment (ROI), website activity, customer relationship management
(CRM) and search engine optimization (SEO) as the top four items on their
digital marketing tactics list. Fewer than 20 percent of CMOs were “very
satisfied” with their ROI analysis while only 13 percent felt good
about their CRM efforts and 19 percent were pleased on the SEO front.

“CMOs confront
intense pressure to deliver financial results,” said Tom Klein, managing
partner and chief scientist of Digital Scientists. “With digital marketing,
they finally have the tools to answer the oldest question in marketing
– what’s working and what’s not. However, they don’t have the internal
digital marketing skill sets they need to get the job done.”

Discussion Question:
Where do you see the greatest opportunities and challenges for marketers
looking to realize the full potential of online marketing? Do you agree
that CMOs and companies today do not have the
marketing skill sets to answer what is working and not in their digital
marketing programs?

Please practice The RetailWire Golden Rule when submitting your comments.

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12 Comments on "Inability to Tap Online’s Potential Frustrates CMOs"


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Lisa Bradner
Guest
Lisa Bradner
13 years 1 month ago
I think it’s a bit dangerous to think of all digital as completely measurable in a campaign context. Many digital marketing initiatives are long-term brand building initiatives: not short term tactical efforts. CMOs must get smarter about portfolio planning and understanding which of their digital initiatives are tactical and which ones are strategic and avoid getting backed into a monolithic discussion of “ROI”. While some channels (like search) can deliver pretty clear ROI the role of other channels (online and offline) in bringing someone to the search is less well understood. Attribution and a/b testing are two ways marketers will start pulling these numbers apart. Marketers are not helped by the current technology suite available to them. Most vendors support one part of the digital marketing suite but not the integrated view of the customer. While I think marketing departments do need new skills (classic marketers will need to embrace more of a direct marketing mindset and marketing overall will need a more quantitative focus) the vendors, agency partners and consultants (my own firm included)… Read more »
Len Lewis
Guest
Len Lewis
13 years 1 month ago

Unfortunately, marketing dollars are among the first to dry up during tough economic times. The reason–ROI. Not that it isn’t there, simply that, as pointed out, it may not be easily measured to someone who is looking to justify expenses on a weekly, monthly or quarterly basis.

We’re talking about a long term commitment and you’re not going to get anywhere unless the CEO holds the same vision.

Matthew Spahn
Guest
Matthew Spahn
13 years 1 month ago

It is ironic that perhaps the most measurable of all media has come to this point of ambiguity. At times marketers fall victim to “over-specialization.” That is, an explosion of niche specialty companies that deliver subject matter expertise and technology in one small corner of the marketing mix solution that a CMO is responsible for. The result often becomes a myriad of highly-specialized solutions that are not integrated. The lack of a top down, integrated strategy across both online and offline results in less effective campaigns.

Within the walls of the marketer, they too can sometimes drive bad behavior by their own organizational structure having a head of online, a head of broadcast, head of print, head of CRM. How about a head of integration strategy and optimization working cross functionally both internally and externally?

Ryan Mathews
Guest
13 years 1 month ago

The greatest opportunity is to leverage social networks. As to the qualifications of CMOs–it’s maybe more the fault of the metrics by which we define success.

Camille P. Schuster, Ph.D.
Guest
13 years 1 month ago

Social networking is a new form of communication that is not “controlled” by the company. Therefore, metrics may need to be adapted to the new situation. Figuring out what success means is the first step. Once you can define success, then you can create appropriate metrics. Adapting metrics from old technologies and situations to new technologies and situations doesn’t always translate well.

Herb Sorensen, Ph.D.
Guest
13 years 1 month ago

The click-click-click of the online clickstream is closely mirrored in the click-click-click as the shopper moves, second by second through their in-store shopping experience. Understanding people, what marketers are mostly focused on, is VERY different than understanding people’s behavior.

Dick Seesel
Guest
13 years 1 month ago

Some of the CMOs’ frustration may be caused by the rapid transition from “old media” to “new media.” Many CMOs of retail companies were schooled in how to allocate a marketing budget between TV, print and other traditional media and are familiar with how to measure the results.

“New media” are tougher to measure: How do you judge the efficacy of your website as a tool to reinforce your brand message and draw traffic to your brick-and-mortar stores, not just measuring them by the sales it generates? How do you gauge the impact of social networking and text messaging on your marketing message? There are some web-only companies (Amazon is the obvious example) who have figured this out, but most CMOs have a lot to learn.

John Gaffney
Guest
John Gaffney
13 years 1 month ago

We may be getting too complicated here. For retailers, data needs to be delivered in real time, pushed automatically, and then it needs to trigger automated customer retention campaigns. Online data should be that simple. Acquisition takes more art and science, and leads to predictive analytics. I think CMOs that are still “intrigued” or “frustrated” are not paying attention.

Jonathan Marek
Guest
13 years 1 month ago

This is a problem that is much harder for physical retail and consumer goods companies than for online retailers. For those who make 95%+ of sales and profit in the brick-and-mortar world, Amazon should not be the role model. Rather, they need a new model that tracks the effects of online activities into the store itself. While many tools can help, the gold standard is testing online activities in the real world. By running the ads in some geographies and not others (as you might a radio heavy-up), and then applying sophisticated analytics to read the impact of the test, CMOs of traditional retail and consumer goods companies can get to the answer they need–the true incremental impact and ROI on online.

Mike Spindler
Guest
Mike Spindler
13 years 1 month ago

The metrics maze is one of two or three things that make it harder to buy and manage digital advertising. Size of pertinent network, the ability of the buying agency to convince the marketer that they are up to date/speed on what to buy, and then of course the interpretation of the metrics. It is much harder and less straight forward than the usual GRP/CPM game.

Of course the implosion of traditional media ad productivity is forcing CMO’s to find answers.

There is some very interesting work in CPG being done in combining in store behavior with digital behavior through MyWebGrocer…which has the largest food digital network by far. I have looked at some of the metrics and while there ARE plenty of numbers….building an ROI from those statistics should be relatively straightforward regardless of the intent of the marketing message (sales or brand building.)

Jeff Weitzman
Guest
Jeff Weitzman
13 years 1 month ago

I agree with the others above that in many cases, we need to redefine success before we start measuring. There is no equivalent of a “social graph” in traditional advertising–how do traditional ROI models account for influencing someone who in turn may drive sales among a broad network of otherwise unrelated individuals? We need to step back and understand the goals online and then describe new metrics to see if we’re achieving them.

One of the hardest things for CMOs to wrap their heads around in the online context is the lack of time and space constraints. Traditional concepts like “purchase funnels” don’t work quite the same way online–there is no scarcity of space as there is in print or TV, and “time” is distorted because the web is mostly stateless. Yet almost everything is also measurable, so marketers feel like they should be able to plug everything into a model and get answers. When those answers aren’t forthcoming, it’s frustrating.

Brian Kelly
Guest
13 years 1 month ago

Tap Online’s Potential?

Like a kitchen faucet or a fire hydrant?

We all know online offers a broad range of activation options. Yet not all turn on the channel spigot with a full understanding of both the objectives/purpose and goals/metrics.

Additionally many CMOs exist in a siloed world where their brand domain is limited and therefore the breadth of online application is also limited. Some do not control all the possible outcomes from the online investment. Which interferes with a clear understanding of the value of the channel.

Pity, but as we say, “retail ain’t for sissies!”

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