Though the CMO is a powerful position in the business, it requires constant adaptation to survive. At Cannes Lions, WARC’s Sam Peña-Taylor heard executives from Tencent and LVMH explain their view of the future for the profession.
At Cannes, the most audible conversations are around the threats to agencies – specifically, the slowing growth and the painful restructuring of the big six holding groups. There’s probably as much fear as there is scepticism about the ability of consultancies to replace the role of the creative agency. But, everyone agrees: this industry is changing.
Despite the lunches on yachts, the Riviera hill views, and all the other perks, the CMO isn’t safe either. The budgets that have fuelled their power in this town are increasingly having to meet different objectives. Where the role of a brand’s marketing chief was once simply to build awareness of the brand, the expectations of the budget and its keeper have become more complex and more diverse.
These executives are more than alive to these shifts. Beginning at last year’s festival, they decided to do something about it. Along with the Association of National Advertisers (the ANA) in the US and Cannes Lions, marketing chiefs from around the world have been gathering periodically to talk about the challenges to the profession and how to deal with them. It’s called the CMO Growth Council, and they have been meeting all week.
“This is the only way to bring back glory to marketing,” said Mathilde Delhoume, global brand officer at the luxury giant LVMH. She was speaking at an event at the festival following a series of discussions that the group has had over the week. Next to her stood Seng Yee Lau, Tencent’s SEVP and chairman of group marketing and global branding.
Neither of these are struggling brands. Tencent’s strength at a platform company is the envy of many western brands; its interests stretch over messaging, gaming, advertising, mobile payments, transportation. It has fingers in many, many pies. LVMH is no meek challenger either. I could list some of its brands (or maisons) but the name alone gives you three. These guys know what they’re doing, and they’re concerned about the future.
The escalation of the role contends with the narrative that CMOs are losing control. There is perhaps something to this. Whereas finance, for instance, may have tooled up, it remains a discipline that a Florentine merchant might still recognise: just balance the books.
Marketing is newer; its definition ultimately unstable. Like finance, it is about inputs and outputs: insights and creative, desire and business results, but the tools of the job bring the modern CMO only marginal gains in this multi-dimensional world. Many occupants of such positions have witnessed their discipline metamorphose before their eyes. The job of building brand awareness through advertising has become an expectation that CMOs and their departments should deliver customer-level personalisation at scale. This, Lau says, “requires a significant, fundamentally different, skill set, that, unfortunately, many of our colleagues around the world don’t have”. There is a plan to change this, however with three strategies.
Revive the mission of the CMO
There’s a lot of talk of missions in this town, but we might read it as a reconsideration of the idea of what the CMO is there to do. In this, both Delhoume and Lau are clear: the purpose of the CMO should be to think long-term about the brand. But the long-term requires ongoing work: “no one builds a legacy by standing still,” Delhoume cautions.
A brand, Lau said on Monday, is like a family trust. Too many people think of it and treat it more like a will left to the next person to do with what they want. As CMOs, they must recognise that going into the future isn’t about reacting to every single new event, but about putting the pieces in place to ensure the brand will survive and perform – both short-term and in building long-term value.
“Lots of us will be pressured for short-term growth,” says Delhoume, “this is where you have to be very vigilant and never sacrifice the long-term growth of your brand.”
The science of brand building
This is a priority for the Growth Council. Though marketing has creative opportunities, there is a more scientific side that can be measured. That’s not just clicks and impressions. The value of a brand is an almost-tangible, like a kind of dark matter: its effects on the rest of the business are significant, though its form is blurry.
Crucially, the establishment of an agreed cross-industry measure of brand value will now be a focus, the two marketers declared. As part of its actions to enhance the brand side of the CMO role, the Growth Council announced that it will develop a brand equity valuation index.
This is fundamental to the business. The translation of brand equity to financial value in order to bring in greater investment has long been a difficult sell. If successful, there is great potential to create a new, fundamental metric whose effects on the industry could be huge.
Craft, as an idea in advertising, is more typically associated with agencies, but there’s much that a CMO can learn. A lot of it is around understanding what’s possible, how the brand relates to the people it serves and who serve it. It is also about redefining what the discipline is.
To this end, says Delhoume, the focus for CMOs should be to create products, services, and experiences that exceed the expectations for the value they bring. This is quite different from traditional creative commissioning, media buying, and measurement. If this element of craft can take hold, it places the marketing chief far closer to the elements of the business that really pull the levers of growth.
There are also lessons to be learned from new markets. Lau points to China as an example of a rapidly growing, mobile-first marketing universe that the west is beginning to resemble. The ideas of always-on, necessary sustainability and opportunities for e-commerce are all shaped by the influence of technology.
The CMO Growth Council is a partnership between the ANA and Cannes Lions. WARC is a sister brand to Cannes Lions.