CMOs: Changing responsibilities make consultants more important

A CMO must be the company's visionary and its expert on trends, while demonstrating adeptness at both internal and external communications. Add a global overlay of regulations, carbon footprints, CSR, cultures, languages, political environments and all manner of differing perspectives... and you have described one of the world's most challenging occupations - played on a very public stage fraught with immediate customer reaction that directly affects a brand's potential for success.

How do you measure a CMO's impact?

Dick Roth of Roth Associates in New York raises an important issue: "It's hard to measure the impact of a CMO." He outlines that it is relatively easy to gauge the effectiveness of a CEO or CFO; "Just ask, 'Are earnings up?' [But] what question do you pose for a CMO? 'Are brand metrics improving?' What is the net influence of their work in the financially driven corporation?

Jeff Estok of Navigare in Australia believes that "Three of the biggest challenges facing CMOs are issues of ROI; transparency; and governance."

He explains: "Client organisations and CFOs, in particular, are pressuring CMOs to deliver greater ROI. CMOs are focusing on all areas of marketing spend, including agency remuneration. Agency fees can account for up to 20% of a client's total spend with an agency, yet all too frequently are not measured to the same degree as, say, their media spend. Clients are increasingly using partner engagement programs to derive better ROI and ROE (return on effort) from their service providers.

"Agencies, too, are putting pressure on CMOs in terms of transparency and governance. Even with self-managed pitches, the trend is toward retaining consultants that offer software-enabled 'scrutinising' services to ensure that the pitch process is fair and objective, and avoids any potential for damage to the client's reputation. Similarly, with existing relationships, agencies are demanding less subjectivity, and greater transparency, in relation to the achievement of their PBR metrics. Consultants play a valuable role here as well, in terms of transparency and governance."

Not just three - more like 50!

Darren Woolley of Trinity P3 in Australia finds that "CMOs are increasingly focused on the delivery of a measurably effective and coordinated marketing plan across multiple disparate markets. With this increasing focus on ROI the role of consultants is becoming more important in providing advice and expertise in managing and measuring the effectiveness and efficiency of the performance of their marketing service providers."

This is best illustrated by an example. Woolley explains, "I was recently discussing the service provider portfolio with a CMO in Asia who initially felt he had three agencies on his roster - immediately thinking of his regionally aligned media and two creative agencies. Within a few minutes of discussion, we had mapped that he engaged 12 companies across digital services, retail, PR and the like - and that was just in China alone. Across the region, he had more than 50 agencies working on one brand.

How does this happen? It is because service providers are often added on a needs or ad-hoc basis and not in response to a strategic plan. Many marketers will align their media agencies for the buying power and alignment, and then have a web of content providers - becoming bogged down in trying to manage and align them. This is where consultants offer maximum value due to their independence, their expansive view of the marketplace and their deep understanding of the marketing - agency process and potential."

Stuart Pocock of The Observatory in London puts a marketer's division of work-time into perspective: "Agencies fail to understand that most senior marketers dedicate less than 10% of their time on agency matters, and most will be dealing with multiple Marcomms suppliers - so many will not get that much attention! Agencies always believe that the client fraternity has an outstanding understanding of the agency landscape. In truth, very few do. They have a day job, and are less than inclined to focus on what the agency world is up to. That's why they need consultants to guide them through the agency jungle."

Source: 50th edition of Internationalist Magazine, via IAS*

*The IAS (Independent Agency Search and Selection Company) in association with the AAR Group (UK) was founded in South Africa by the **Mazole Holdings Group in 2006. IAS specialises in client/agency relationship management and helping clients find agencies. International associate company AAR Group was founded more than 30 years ago in the UK and has associates and branches throughout the world. The Independent Agency Search and Selection Company is committed to the international and local pitch guidelines as defined by both the IPA (Institute of Practitioners in Advertising UK) and the ACA (The Association of Communications Agencies SA).

**Mazole Holdings is a South African company owned 60% by Johanna McDowell and 40% by Dan Moyane. Mazole focuses on building businesses in the marketing and communications space.