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CMO Confidential
McKinsey & A.N.A | Marketing The Battle Between Believers & Non Believers | Part 1
00:25:57
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- [00:00]
Mike Linton
The CMO Confidential Podcast is a proud member of the I Hear Everything Podcast Network. Looking to launch or scale your podcast, I Hear Everything delivers podcast production, growth and monetization solutions that transform your words into profit. Ready to give your brand a voice then visit iheareverything.com this show is brought to you by Props, our title sponsor. Props is a performance driven content platform. They combine the attraction of creator content with the results of paid media. Instead of focusing on impressions or posts, Props takes responsibility for leads and customers. Check them out at Props Co.
- [00:41]
Robert Toss
Welcome to CMO Confidential, the podcast that takes you inside the drama, decisions and choices that go with being the head of marketing. Hosted by five time CMO Mike Linton.
- [00:54]
Mike Linton
Welcome marketers, advertisers and those who love them. The Chief Marketing Officer, Confidential. CMO Confidential is a program that takes you inside the drama, the decisions and the politics that go with being the head of marketing at any company in what is one of the most scrutinized jobs in the executive suite. I'm Mike Linton, the former Chief Marketing Officer of Best Buy, ebay, Farmers Insurance and Ancestry.com here today with my guest Robert Toss and Nick Primola representing McKinsey and the association of National Advertisers. Today's topic, marketing the battle between believers and non believers. For all of our listeners, this is a two part show. Now Robert is a McKinsey marketing and sales partner with 25 years of digital and media experience. And Nick is an EVP and head of Industry leadership and CMO practice at the ana. One of the longest titles of anybody I've ever known. And he is almost also a famous super bowl media commentator. As as background for this Show, a recent McKinsey A&A article was featured in the Wall Street Journal and it stated that C and O CEOs that have marketing at the center of their strategy generate a lot more growth than CEOs that don't. We're going to talk about that study as well as try to understand why so many non marketers are still non believers given all the data in the marketplace. Welcome Robert and Nick.
- [02:33]
Robert Toss
Thank you. Great to be here.
- [02:35]
Nick Primola
Thank you, Mike.
- [02:36]
Mike Linton
All right, both of your organized organizations have been studying the CMO position in depth And I think McKinsey comes out with an article about every week or two on the CMO job. Give us a broad overview of your take on the state of the job today.
- [02:53]
Robert Toss
Yeah, happy to. Happy to. We've been very fortunate to partner with Nick in the ANA on this great research that I know Nick And I are both very, very passionate about I as a former CMO and operator and Nick with the great work he does in the community. I think that as a marketer and an operator, first I think that the big thing that shocked me as we did this work was the major disconnect between the CEO and the CMOs. As somebody who's always sat in that role and can relate to having my budget being asked to be cut and having people try to explain to them what marketing we're doing and all the different levers that we have, it was pretty eye opening that it's a pretty big challenge out in the industry. I think that we see that there's three archetypes of CEOs out there. As you stated in the opening. There's a set of CEOs that get marketing. They have a seat at the table with their CMO and they're driving leadership level growth. Then there's two other archetypes where there's one where there's the CEOs that kind of know they need marketing, but they kind of don't know how to pull the levers. They kind of don't understand how it all works, how it all adds value to their business. And then the third ones that unfortunately just view it as a cost center. The latter two sadly are more, more prevalent than we all want to admit.
- [04:11]
Mike Linton
So. So Nick, tell us the ANA's take on this. We've got the background of the study. You folks are interfacing with, you know, thousands of CMOs. What. Tell us your take on the state of the job today.
- [04:26]
Nick Primola
Well, I think you actually used the term in the beginning, which is the problem. It's. Do you believe it or not? Which is just seems so ridiculous of a thing to kind of of an environment to be operating in. Right. Not everything the CMO does or marketing function does has to be proven or can. You know, we shouldn't have to convince and sell in. Right. Those terms are so common with the job or really have someone trust us. Right. You should be able to walk into that room where the business decisions are being made and say if we do this, we can expect this. And you know, there's there, there, there's a lot of reasons for that. It's not the easiest thing in the world. If it was, we wouldn't have McKinsey involved. But is it? It is a dynamic that exists between not just the CEO. By the way, there's inconsistent expectations of the marketing function for every single seat in that boardroom.
- [05:26]
Mike Linton
And yeah, and a Board. A lot of boards don't have. There's a lot, there's no marketers on a lot of boards. So you're sitting, you're a lot of times having been in the seat a lot, staring down the face of a bunch of non believers who are almost always wearing an Apple watch and driving like a BMW, telling you that brand doesn't matter. But yes.
- [05:46]
Robert Toss
So yes, we actually looked at the CEOs of, I think it was the Fortune 500. Less than 10% have ever had any marketing role in their careers. And then the boards are even significantly less than that. To your point, it's pretty hard for those guys and gals to really appreciate modern marketing today. Which is one of the insights that we have is that the CMOs that do this really well have got super engagement. They have super alignment on what the modern tool set is and how they deploy it. They spend a lot of time in education. They take them to cbs, they take them to Silicon Valley. They, they do an amazing job of connecting that dots and not fighting the fight alone.
- [06:31]
Mike Linton
Now one of the things I want to, I want to follow on with this, the topic we just opened up here, which is we've had some other guests on the show that say the CMO position is becoming so broad with so much data and so many tools. In fact, Bob Leo Dice from the NA said the tools are outrunning the ability of people to understand them, much less practice them. But now you have boards and CEOs looking at these tools saying how is the marketer implementing them? One one show we did very early in CMO Confidential suggested the position was headed for extinction because of the, just the size of the remit and the inconsistency around it. What's your thoughts on that? Because I understand Robert's point. Yeah, you bring everybody along, but a lot of times people are changing their expectations as the tools come available and looking at the marketer to put that in place. Tell me, what are you thinking about that?
- [07:33]
Nick Primola
I think it's, I think it, look at it really right now we see it as this opportunity cost that is total and totally unnecessary. It's really. There are so many companies who are not getting the value out of the marketing function because they just don't understand how to use it. It's the tool in the toolbox that doesn't really look like the others. It's a little bit more complicated and therefore maybe you just want to put it down and pick up a more basic thing or just simply not use it at all. Which is often the case. And so that's, that's a problem. And again, we think it's totally unnecessary. We're looking to make sure that we can bridge that gap. It's a gap that is all within our control. And frankly it is the job of the, of the marketer, of the CMO to help educate, not convince, not sell in, but educate on how do I really think about this function and how it can contribute to value, to my area of business, whatever that business be. And it's going to change. And by the way, it should, right As a competitive advantage, you should be evolving with technology, with where the customer is. If you're not, you're doing, you're not doing your job.
- [08:45]
Mike Linton
So I think this is a great point. I'd love to hear you both talk about it, which is. But if I'm faced with a bunch of non believers and they already are starting with let's call it, we're going to zero based marketing every year, which I think is a ridiculous way to start actually. No one's zero basing tax or the manufacturing plants or, or anything else. We're going to zero based marketing and then there's all these other tools and what are you doing with that? And the only thing we're going to go okay is performance based marketing. What do you do here when what is happening is there's more and more tools, more and more expectations and you're staring at a wall of non believers per Robert's point. Types two and obviously type three. What do you do here if you're the cmo?
- [09:30]
Robert Toss
Listen, I think you guys have said a lot and I think that the first thing that I wanted to respond to was it is ludicrous to think that the CMO role is going anywhere. And we may be seeing it called different things, chief growth officers, chief customer officers. But every major company needs to have a role that is the integrator of the customer and is the best and most knowledgeable person about the customer and how they want to buy, how they want to interact, the insights about that customer and what channels and how they want to use those channels and so forth. And we see that in the data. By the way, good companies, the leaders in their spaces, perform twice as better, have greater than 5% growth twice as more likely than the ones that don't have that customer integrator at the table. So that's number one to your point of what CMOs need to do. I think it's number one is get alignment on what the remit of the job is not your job description, not what some HR person wrote to you, but what you and the CEO are aligned to deliver. Number 1.1 of that is make sure you align on short term and long term. KPIs understand the deliverable. CEOs are focused on the stock price, they're focused on short term revenue. You better deliver that to get to that longer term stuff. Second, you need to explain and show how the levers are moving the needle. You need to be able to translate and be that person that connects the dots across the channels of how your customers interact. And then third, you need to measure it and prove it. I know we hate the word prove but man, the reality is we need to show how we tie marketing activities to business outcomes. That might mean real holdouts, that might mean incrementality testing, that might mean brand research, things like that, that need to be prescriptive and transparent and we see the successful ones do that really well and everybody gets aligned.
- [11:34]
Mike Linton
So, so let's talk about. I want to come back and talk about what data works best. I've always called it sales overnight brand over time, which is I got to deliver the mess. If you miss, if you start missing quarters, it doesn't matter how much brand building you're doing. So I think this focus on sales and a direct correlation to sales is important and you can almost always tag performance marketing into that. The battle between the believers and non believers though is rarely fought on performance marketing because everyone kind of agrees on those measures. And yes, you can tweak some of the variables. The battle is fought on the longer term things and how much people are willing to invest on the belief they're going to build that brand over time so you win the game next year or the year after. Talk about the data that moves that kind of argument between the, the, the brand or the marketing person that's saying yeah, I'm going to win today, but I got to build this tomorrow so I can win tomorrow. That's where the most arguments, at least from our listeners I think come in. Well, that's where the, there's also a massive drive, particularly the company is under any financial pressure to take all the long term spending and shove it into performance marketing today. So you make these numbers, which means next year you're probably naked and you haven't built any new competencies. Can you both talk about that kind of setup?
- [13:04]
Nick Primola
I think it's a matter of transparency and demonstrating versus proving. Right. So demonstrating is, is a little bit more black and white and I look at it as from what I've heard anyway, in all the conversations that I'm in with, with CMOs, individuals or groups, it's about making sure you continue to, as they say, throw the fish on the dock. Right? You just keep, doesn't matter what the size is, but continue to throw the fish on the dock and just, you know, keep the lights on in, in that regard. And that gives you license and permission to kind of go a little bit out further to see and get a little bit more of a substantial experiment. And when you want to do that, when you want to expand out, you can't go do that alone because you're going to be alone when you're there to kind of prove the results out. You have to be lockstep with, okay, you guys agree? These are the conditions by which we are going to determine whether or not we succeeded. And these are the indicators. Here's the bottom line that we're all going for. And these little, you know, maybe they're a fenced off test or experiment or they're something that's a little bit more substantial, but you are including them in the conversation along the way. It's not an easy, straightforward thing. There, there are many nuances that marketing is actually impacting along the way. And you want to make sure that you're just having that conversation. You're not showing up, you know, six months later with look what we did and then not able to say, really prove it out because then you're just setting yourself up for, you know, maybe you'll make it through that meeting, but you're not going to make it through a lot of those meetings. It has to be an ongoing kind of thing. And that again gets you into the, that a more substantial and enduring license to operate where they're going to trust you more because it's not you, it's what are you doing that's working, that's not working. Let's do more of what's working and less of what's not working. That's a process. And by the way, and you're continuing to demonstrate successes along the way, you know, as you go in a more consistent way.
- [15:09]
Mike Linton
So I need to keep throwing these fish on the dock. And so when, then when I say I'm gonna go out and be gone for a couple months to get a bigger fish, here's enough fish to get you there, you have enough credibility to go for them to let you do that.
- [15:22]
Nick Primola
Yeah, absolutely. And that's the, the, the, the recipe that has proven time and time again with the CMOs who have the, who have had to build the relationships and the credibility and the license to operate with their C suite. Not everyone has to do that. Right. You've got the gigantic brands that are brand forward and their expectation is actually the, the opposite of that.
- [15:47]
Mike Linton
It's like if you're in Robert's CEO number one, you, you, you, you can go fish anywhere you want.
- [15:54]
Nick Primola
Yeah.
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Mike Linton
And they know you're going to do it. Robert, anything to add to this?
- [15:57]
Robert Toss
Yeah, yeah. You know, I think this is the, this is the, the section that everybody needs to pay attention to. When we did our research with Nick and the Ana, we asked both the CEO and the CMO what their top metrics are of success. So we listed a whole bunch cat impressions, brand, blah, blah, blah. And what we found is two really, really fundamental learnings here. This is the money slide, as I would call it. Number one. CEOs, I'm going to tell you the secret metric. Ready? Sales and margin. Sales and margin. I know you're shocked at that, but.
- [16:38]
Mike Linton
That'S the investor metric. Everyone knows. Who knew.
- [16:41]
Robert Toss
But seriously, that is the number one thing that CEOs all selected. I got to tell you, Brand, even CAC wasn't on there. Impressions weren't on there. Click through rates weren't on there. Huh. What the second part was is that there was a significant disconnect in what the CMOs picked. What that tells us is that there's a lack of connectivity and understanding of what the job is and how to connect the dots. The CEO and CMO needs to align on that metric. We talked to some really great CMOs who are now presidents and CEOs themselves. And I had one from a major telco sit there and said, robert, I've never taken my MMM model to my CEO. I've never taken my brand metrics to my CEO. I talk what he talks to Wall street and that's how I'm successful. When I go in proactively showing him how to turn the levers to drive things up and down. And I think that's the marker of success. Here is when the cmo, and this is a great quote from one of our interviews, becomes that general manager. That's a quote from a CEO that said, I want my CMO to be a general manager of marketing. I want them to treat it like a pnl. I want them to be proactive. I want them to have a forecast. That's what these CEOs are yearning for.
- [18:02]
Mike Linton
I think that is a super important point and it's a marketing mix model for those of you who might not know. And I am, I am. The marketing metrics only matter to the marketers. You should never. There's no reason to share them out. You should tell.
- [18:16]
Robert Toss
I'm not saying don't do them. I mean, you should absolutely.
- [18:18]
Mike Linton
No, you should do them because they're diagnostics of what's working. But, but I guess we take for.
- [18:24]
Nick Primola
Granted or assume that people speak the marketing language even in its most basic sense. Because. Because one of the interviews that we had was with a CMO who was incredibly successful at a fortune, you know, 10 brand. And he was giving us a story where he was in the, he was in this conference room preparing for a board meeting with their CFO and maybe one or two other business presidents. And they were there for a few hours. It was the, you know, he set the stage where they had food ordered in. It was one of those late nights. And the CFO just goes after a few hours. You know what, I just have to be honest. I really, I really don't know what you've been talking about most of the time here with the terms that have been using. I don't understand why you're even talking about data and technology. When you talk about media costs. I don't understand why that is even necessary. And these, these terms you're using. I understand you, but I, but I can't translate this language into anything I could do. And this was like, you know, they have an amazing relationship. They have a. From a personal standpoint, from a professional standpoint. But you can't just sort of assume and really overestimate or give more credit to others really knowing about what you're talking about or frankly caring about what you're talking about.
- [19:47]
Mike Linton
Well, I agree with that.
- [19:48]
Nick Primola
You have to kind of, you know, really get to there what is most valuable to them and, and ultimately the board.
- [19:54]
Mike Linton
And one of the things I think translate for the cfo, because if you think about all the functions, they don't really want to translate like all the manufacturing and the labor and every other model, they don't want to be responsible for learning all of that language, just like you don't know it as a cmo. And the other tip I'd give as a CMO is, man, I have never fired the creative agency when I show up because then if I do that, what I'm signaling is creative will solve the problem. And a lot of times the problem has nothing to do with the creative it and it's everything to do with the consumer or the marketplace. And once you do that, you're already pushing the fish. You're going to throw on the dock down the road and you are saying, I'm going to fix it all, and you're not.
- [20:40]
Nick Primola
Yeah.
- [20:41]
Mike Linton
Hey, so let's shift. You. You published the article. I mean, you got Wall Street Journal and everything. That's pretty cool. What has been the reaction here? I mean, all my. Look, I started png. All my PNG friends and consumer goods, they believe this. They love seeing these articles. What's been the reaction, though, from the rest of. Of the marketplace to this?
- [21:06]
Robert Toss
I mean, we've had really, I want to say, almost overwhelming reaction. Everybody has a point of view on the topic. I think you've seen a lot of other offshoot articles come about in the.
- [21:18]
Mike Linton
Recent.
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Robert Toss
But I think it's, it's because it's, it's a real issue. Right.
- [21:24]
Mike Linton
It's.
- [21:24]
Robert Toss
It's legit. And I think the one thing I would say, and I think, you know, from the McKinsey lens, is we've been so fortunate in a lot of our clients have reached out and said, oh, my God, can you come and help explain the findings? Explain what we can do? So we work with the ANA to create some great playbooks and things like that that are helping bridge the gap. But it's been an exciting and a passion project for both Nick and I and something that I think there's a lot of work to do, candidly. I mean, if we really peel the onion here, marketing has work to do. Marketing has to claw that seat back at that table because they're being pushed further and further away. And it hurts me. It hurts my soul, candidly. And I'm super passionate that every organization needs a marketer, a customer advocate at that table to help drive that company strategy. I just cannot imagine any company B2B. B2C. B2B2C that doesn't have this role. It's just so fundamental, and I hate to say it, I mean, I saw some things that, that just made me cry of how CEOs talked about marketing and man, we just have so much more to offer. And I know the ANA is committed to this long term.
- [22:33]
Mike Linton
I want to drill down on this. You know, that's. I've had research make me cry, but usually it's been more negative. But so, so I haven't. So look, there's all this data on this all over, and you can look at all the consumer goods stuff and you can look at this data and it's Great. These companies are out there, but you still have tremendous amounts of boards, CFOs and CEOs. Robert, in your camp of two and a lot of times three, which is. This is just a damn line item. I'm going to optimize it and I can turn it on and off whenever I want, and it's how I make my quarter. What do you two say? Why are there still so many believers out there? Given all this stuff? I mean, and then what do you. You know, I get the data and managing it, and some of this is on the marketer, but a lot of this is also on the receiver. Why are there so many people out there still thinking this, given all the data?
- [23:36]
Nick Primola
I'm going to jump in just to really underscore who we're on the phone with. Right. Or. Or the. Or the zoom with. It's talking about an article in the Wall Street Journal that was driven by work of McKinsey. All right. I'm not talking about another article in any of the industry trade pubs or a white paper that any of the industry experts, you know, sort of.
- [24:03]
Mike Linton
That no one reads. Yeah, yeah.
- [24:06]
Nick Primola
We have so many opportunities and occasions for marketers to talk to marketers or take selfies with marketers or give our marketers awards. And so for. We don't. And this is all our own doing. We have not had the serious conversation with the deans of business schools, with the CEOs, with the boards of directors about the potential opportunity from. From how marketing creates value for the organization. So that's why we did this with McKinsey. That's why we pushed for the Wall Street Journal. That's why we're talking about it here. It's a understanding from the business community on how to think about the marketing function. It's not so much about how marketers can do better marketing. It's how the business community can kind of understand a really complex but really useful and valuable function if they just understand it a little bit greater. And so that's why we went beyond the marketers who was our normal sort of, you know, chamber and went to McKinsey to kind of penetrate that audience. I think this is just the start of it. And we need CEOs talking to CEOs, CFOs talking to each other about this. But we can't get the discussion started.
- [25:24]
Mike Linton
That concludes part one of our show. Tune in next Tuesday to hear the conclusion of marketing, the battle between believers and non believers. And look for all of our shows on stage. Spotify, Apple and YouTube including the Budweiser case. A look at how not to manage socio political issues. The Marketing CFO why you need it for your organization and why is B2B marketing so bad and what to do about it. If you are enjoying CMO Confidential, please like share and subscribe. This show is brought to you by Props, our title sponsor. Props is a performance driven content platform. They combine the attraction of creator content with the results of paid media. Instead of focusing on impressions or posts, Props takes responsibility for leads and customers. Check them out at Props Code.