Interviews, insight & analysis on digital media & marketing

Keeping up with the changing role of CMO

by Karel Schindler, CEO at ROI Hunter

Once solely responsible for overseeing ad spend growth and reaching more customers via online channels, the Chief Marketing Officer (CMO) of today is fighting on several fronts. New KPIs directly related to profitability, concerns around excess stock and a tech talent shortage to manage are causing the responsibility of the role to evolve. 

To add to the pressure, modern CMOs usually have little opportunity to make their mark. The average tenure is just 40 months, less than half the time of CEOs. In a continually shifting environment, identifying how the role has changed is critical to ensure success moving forward.

Profitability and the stock crisis

Board level expectations are weighing heavily on CMOs. Previous KPIs in the marketing department were likely ROAS (return on ad spend) or CPA (cost per acquisition) as ecommerce became a primary selling channel. Now, these metrics are holding less weight as businesses prioritise a healthy balance sheet above all else – so optimisation towards revenue growth is not enough. First and foremost, CMOs and their teams need to ensure profitability from their strategies.

One of the major profitability barriers marketers are being tasked to solve is around stock. Overstocked goods are proving a challenge for 44% of retailers, with the average organisation in the UK sitting on £65,000 worth of immovable products.

Visibility into the availability and performance of every product provides the insights that can boost the profitability of marketing efforts, solving a major issue for many CMOs. Armed with this data, marketers can focus their budget on the right products aligned to their goals, including improving profitability, increasing revenue, and highlighting new arrivals.

By keeping track of performance metrics like sell through rate, or locating products with a low number of sales, CMOs can also identify both deadstock and products likely to become deadstock. This enables them to run an appropriate strategy around this deadstock before it’s too late, and even improve their inventory planning for the future.

At the same time, CMOs can use product performance data to ensure the right products receive promotion (e.g. new arrivals), rather than that budget being spent on less profitable products, such as those with discounts.

Prioritising people

Historically, marketing teams have enjoyed something of a siloed role, but this has slowly changed. Now, marketing leaders are required to communicate a lot more closely with the rest of the C-suite, as marketing priorities start to overlap with those of other department heads, such as profitability.

In part, this is due to the potential that digital marketing strategies can have on the overall financial performance of the business. CEOs are expecting marketing leads to prove how their work is directly driving growth, which impacts the decision-making process of the rest of the C-suite.  The CEO-CMO relationship is a delicate one that needs nurturing, so marketing leads need to be clear on what they can achieve with the tools they have, and what new ones they need to maximise ROI.

The influence of the influencer

Any modern marketing campaign overseen by the CMO is likely to involve promotions via social media platforms, such as Facebook and Instagram. In fact, 66% of purchasers say that social media plays a key role in impacting their decision to buy from a brand.

Even more impactful is influencer marketing. 80% of consumers have purchased a product after an influencer recommended it, typically by clicking on a link or image they shared. But the influencer marketing sphere is a rapidly changing one. Trends fly and die at the drop of the hat and cancel culture can threaten a brand through no fault of its own, but through a simple affiliation with an individual.  As responsibilities widen, CMOs must ensure they’re prepared for all possibilities to maximise the potential of influencer marketing and manage any risks.

Meeting the challenge

While there’s no quick-fix solution to help CMOs tackle every new responsibility in today’s ecommerce environment, insight-based decision making has become even more vital for the marketing department to help drive the business forward. CMOs must ensure visibility over how individual products are performing to ensure their tight budgets are used efficiently. Through this, they can keep their CEOs onside, and respond to the extra responsibilities by providing the business with extra possibilities.