Marketing Too Focused on Tactics, Not Strategy
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Marketing Too Focused on Tactics, Not Strategy

In most companies, the corporate marketing function is still not aligned with the CEO¡¦s agenda, and tends to focus on tactical issues such as maintaining branding guidelines, sharing best practices, and counseling divisions, rather than on strategic issues.

Paul Holmes

In most companies, the corporate marketing function is still not aligned with the CEO¡¦s agenda, and tends to focus on tactical issues such as maintaining branding guidelines, sharing best practices, and counseling divisions, rather than on strategic issues, according to a study by the Association of National Advertisers and management consulting firm Booz Allen Hamilton.

The study also suggested that the role of the chief marketing officer is poorly defined at an alarming number of companies, and that while companies expect marketing to provide measurable outcomes such as return on investment, they don¡¦t feel current metrics are up to the task.

¡§This joint research effort demonstrates that the dynamic and rapidly evolving landscape demands that all marketers become more accountable. The CEOs have been living and breathing this for years. They are frustrated at the uncertainty of not knowing which half of their advertising dollar is ¡¥wasted¡¦. The message here is clear¡Xmarketers need to measure and convey their value in the same language and metrics their CEOs use,¡¨ said Bob Liodice, ANA president and CEO.

The study also revealed an emerging sequence of best practices for prospective CMOs. Key success factors include identifying whether a company¡¦s CMO model is focused on providing service, advice, or driving growth. Other success factors include agreeing on an ¡§expectations¡¨ contract with the CEO, establishing clear organizational structures and decision rights, renewing focus on capabilities such as ROI analytics and consumer insights and taking risks in pursuit of big ideas.
The study of over 100 companies found marketing taking on increasing importance:

„X Marketing is increasingly important to corporate success, but CEO and marketing priorities are not aligned. Across all industries, 75 percent of marketers and non-marketers agree that marketing is far more important to corporate success than it was five years ago.
„X Respondents in all nine industries studied cited competition and new products and ideas as the top two reasons for marketing¡¦s ascendancy. The results vary by industry; for example, 79 percent of consumer packaged goods respondents felt that ¡§marketing is best positioned to orchestrate across corporate functions to create and promote new products and ideas.¡¨ In the auto category, however, only 44 percent of respondents felt that way, while 81 percent cited ¡§fierce competition¡¨ as the primary cause for marketing¡¦s emergence.
„X In addition, marketing is becoming increasingly important in industries where it has traditionally taken a back seat. For example, banks are realizing that their options to grow through acquisitions are diminishing and they must become more successful at deepening relationships to drive organic growth. Reflecting this, 33 percent of financial services and 36 percent of Consumer Packaged Goods respondents - higher than in any of the other industries - cited the need for organic growth as a reason for marketing¡¦s increased importance.

At the same time, marketing is disconnected from the CEO agenda. According to the Conference Board¡¦s CEO Challenge 2004 report, the top four priorities for CEOs are: top line growth (52 percent); speed, flexibility, adaptability to change (42 percent); customer loyalty and retention (41 percent); and stimulating innovation (31 percent). In contrast, marketing is focused more around tactical issues such as setting and maintaining branding guidelines (83 percent), counseling divisions (52 percent) and sharing best practices (52 percent) than it is with driving the CEO agenda (37 percent) and driving innovation (35 percent).

Less than half of respondents indicated that the issues that keep CEOs awake at night are at the top of marketing¡¦s agenda. ¡§Marketing organizations need to do a better job of identifying and supporting the CEO¡¦s priorities,¡¨ said Paul Hyde, Vice President of Booz Allen, who noted that the average CMO tenure is only half as long as that for CEOs.

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