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Is the CIO-CMO transition of power becoming a reality?

Tom Kaneshige | Oct. 15, 2014
Three years ago, Gartner predicted that by 2017 CMOs will spend more money on IT than CIOs. All signs indicate that shift is well underway.

This story begins in the great recession when the CMO faced the firing squad. As revenue dried up, companies turned to the CIO to streamline operations and make sure every dollar spent had a solid return on investment. The mantra "do more with less" became the new normal. Meanwhile, CMOs spending millions on advertising campaigns without clear returns became easy targets.

Theirs was a black art best summed up by John Wanamaker's famous business quote: "I know that half of my advertising dollars are wasted, I just don't know which half." This philosophy, of course, doesn't play well when budgets are squeezed in a recession.

Then, in 2010, social media, mobile and cloud computing swept in to save the CMO. Digital advertising, in particular, flipped Wanamaker's quote on its head. That is, digital marketers could suddenly measure everything. Advertisers began dedicating more than 10 percent of their total marketing spend on digital media that could prove marketing's worth.

"It was a big turning point," Garg says.

Social media took off and changed how consumers engaged with brands. Consumers now controlled the conversation, telling peers about great products and bashing bad ones. A million people could be talking about a product over Twitter within minutes. In essence, social media turned ho-hum advertising into a rock star for the customer experience. Everyone inside a company, from the CEO to the intern, values the customer experience.

Mobile devices also meant consumers could be reached while, say, standing in the checkout line at a retail store. In the past, marketers had to buy pricy primetime television ads between the hours of 8 p.m. to 10 p.m., because that's where the consumer was going to be, sitting on the couch in front of the television. With mobile devices and social media, marketers can reach consumers anywhere, anytime.

Mobile devices and social media brought the CMO within a hair's breadth of the revenue pipeline. In the old days, a traditional marketing funnel delivered a large volume of leads to salespeople. Today, marketing not only qualifies leads but, in many cases, converts leads to sales, thus usurping salespeople.

CMOs Take Off With the Cloud
The other big 2010 event was the emergence of cloud computing. Tech purchases used to creep along in a lengthy approval process through the CIO who controlled hardware resources, but cloud services meant CMOs could get a subscription and be up and running the next day.

"A CMO's budget is OPEX (operating expense), not CAPEX (capital expense)," Garg says. "In most companies, a CMO can write a million-dollar OPEX commitment in a heartbeat."

CIOs salivating at such purchasing power and wanting to become CMOs should get up to speed on some of the major digital marketing themes facing CMOs today.

 

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