← The CEO’s Guide to Marketing
The CEO’s Guide to Marketing
The one with McKinsey Senior Partners Kelsey Robinson and Shelley Stewart about the bottom-line consequences of the CEO and CMO disconnect.
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- [00:00]
Seth
Foreign.
- [00:06]
Host
Welcome back to the CEO's guide to marketing. So in mid June, McKinsey released what was, what is their second research study on the CEO and CMO relationship. And at the risk of giving away the obvious and the punchline, I think it's fair to say the relationship isn't particularly good and more importantly, it's not particularly productive for purposes of the business and what their research really dives into. And what it explored is the disconnect in some of the world's largest companies between the marketing Org, the CMO and the rest of the business. And it's an absence of alignment that's both measurable material and it continues to punch growth and stakeholder value in the face, which is of course one of the reasons I started this show to begin with, in an attempt to try and play some part in bridging what's fundamentally a self defeating, business defeating divide. I can't help as we get into but think about this great James Baldwin quote that I probably quoted before on the show, which is that while not every problem that's faced can be changed, nothing can be changed until it's faced. And that's really what I think this research is all about, what the McKinsey work is all about and what today's show is all about. And so I'm joined by two of the report's authors, Kelsey Robinson and Shelley Stewart, both senior partners at the firm, to talk about the what and the why and the report's key findings. And arguably again, back to James Baltim, what the path, arguably, more importantly, what the path forward might look like. So first, Kelsey and Shelley, thank you for joining me.
- [01:39]
Kelsey Robinson
Thanks for having us.
- [01:41]
Host
Yeah, I mean we kind of began this conversation in Cannes and it was so interesting both to me and to our audience of chief executives that I thought it was important to continue it for this audience. And so maybe as a place to start is why don't you ground us in why you began this research with the first iteration of which was in 2023 to begin with, who you've surveyed, kind of what the broad methodology is, and then we'll get into the key findings.
- [02:15]
Shelley Stewart
Great.
- [02:17]
Kelsey Robinson
I think the why, Seth, you hit on this a little bit in kind of what you just said. In terms of the why we had increasingly been feeling but didn't really have data to put against the kind of disconnect in the C suite, especially between the CMO and the CEO and increasingly the CFO as well, in terms of how resource allocation decisions were being made.
- [02:39]
Host
Kelsey, I'm Sorry to interrupt. Was that like a feeling across the firm? Because obviously you talked to so many chief executives, so many CFOs, so many boards, so many CMOs, or was that kind of isolated to the reports authors?
- [02:53]
Kelsey Robinson
We increasingly across the firm we're feeling that CMO CEO disconnect. And I think we were seeing it show up in meetings and boardrooms and you know, kind of C level discussions. I think we were seeing the artifacts of it in terms of how investments in marketing were or were not, more importantly, were not actually increasing and were often reducing. And I think if we think about everyone says the last five years, pretty transformative, pretty unique time in business.
- [03:22]
Seth
Why?
- [03:22]
Host
What happened exactly?
- [03:24]
Shelley Stewart
You know, just a few, a few.
- [03:26]
Kelsey Robinson
Shocks to the system. And amidst those shocks, we, I think both for marketers but also just for any leaders, believe that growth is the imperative. And we believe marketing, consumer centricity and customer centricity is at the center of that. And so you take the kind of tension and the disconnect we were feeling and seeing the evolution and the kind of degradation in many cases of kind of the investment, proactive investment in growth, but then the imperative and need for growth. And I think that was really what instigated the first piece of research in 23.
- [03:59]
Host
Can I ask you, I don't know if it's a clarifying question or just something else entirely, but I'm really struck by the language you just used. The degradation of investment in growth, presumably. And of course I've seen the research, you know, and we've talked about it before, but presumably it wasn't a degradation of a overall investment in growth by the chief executive, CFO and board.
- [04:25]
Seth
Right.
- [04:26]
Host
It was a degradation in their confidence that marketing could be a lever for growth. Or am I misinterpreting it?
- [04:33]
Kelsey Robinson
Yeah, I think a lack of clarity on the through line from the dollars invested to the return. Yeah, yeah, that's how I would articulate it.
- [04:45]
Host
Okay.
- [04:47]
Kelsey Robinson
So that was a little bit of the, I'd say the, you know, the implication, the impetus for really trying to say, how do we study this relationship? What does great look like? How do we give advice? You know, because this is going to be a big barrier for so many companies, so many leadership teams. And so that was the impetus in terms of, you know, you asked about methodology. In terms of methodology. This past year we Talked to over 100 of the largest global companies.
- [05:15]
Shelley Stewart
Right.
- [05:15]
Kelsey Robinson
So we did it across geographies. We had both a quantitative survey asking them, you know, to respond to certain questions around what they Measured how they measured their beliefs and what they saw or didn't see in terms of marketing's contribution to the business.
- [05:29]
Host
And I'm sorry, I'm sorry, when you say to they were responding, who were the they, who are you going to within the organizations?
- [05:37]
Kelsey Robinson
Primarily CMOs and CEOs. We did increasingly include CFOs in our research this year and think that we're going to do that more, even more next year because we believe that again, that trio is really critical.
- [05:48]
Host
Yeah, agreed.
- [05:49]
Kelsey Robinson
But yeah, and so they're, they're, when we use data points in this discussion from our research, that those are, you know, the leaders at the largest global companies and the biggest brands, you would know, who were actually telling us kind of the state of the state.
- [06:04]
Host
Yeah, which, which, you know, for, again, at the risk of stating the obvious, but for, for our audience, those top 100, even if they come from a slightly broader universe, but amongst the 100 largest companies in the world is a disproportionate impact both on kind of patterns and behaviors within enterprise, but also, you know, more tangibly and materially on global G. So when they screw up growth, global GDP is diminished. All right, all right. Anything else to add on that before we get into what's the meat of it, which is what'd you hear, What'd you see? How's it compared to two years ago?
- [06:46]
Expert
Look, I think Kelsey had a great frame and Seth, you alluded to it as well. But we know that the amount of issues that are in front of CEOs right now has increased significantly over the last three years, five years and 10 years. And if you look at this moment, whether it's what's going on with geopolitics, what's going on with AI and technology, what's going on with you name the next four things we really understand. Have empathy for CEOs as they try to prioritize. But as Kelsey said, the imperative for growth is the most important thing, both for individual institutions, but also economies. And the other thing that's happening specifically with the customer is they are increasingly engaging through many different channels that they weren't engaging in before. And so, and this, this elevates the need to take a very customer centric end to end view of that decision journey in order to drive growth. And marketing, we believe, as you know, sits at the core of that. So we were surprised and a bit concerned at the growing disconnect at the core of this research. One of the big takeaways was that CEOs are actually quite Confident in their understanding of modern marketing. Then, if you ask, by the way, despite only 10% of them actually having a background in marketing.
- [08:28]
Seth
Yeah.
- [08:28]
Host
Which was one of the. One of the key points in your 23 research.
- [08:31]
Seth
Right.
- [08:31]
Host
Which is 90% of the chief executives of the 500 largest companies in the world have no marketing experience, direct or background whatsoever, if I recall.
- [08:42]
Expert
That's right. But then when you ask the CMOs, who generally, I think it's safe to say, do know marketing, whether their CEOs actually understand modern marketing, 70% say, no chance. And so that's a real, you know, that's a real disconnect that, you know, that concerns us.
- [09:03]
Host
So the. I'm sorry, what was the percentage of CEOs, Shelley, who felt confident that they understood marketing?
- [09:13]
Expert
We had. Sorry. So we had 65% of CEOs say that they understood modern marketing.
- [09:19]
Host
Right.
- [09:19]
Expert
And then 70% of the CMOs in the same survey set said, no way. They definitely don't understand modern marketing. So that's really concerning. And if you take a longitudinal view, we've seen this gap between the CEO and CMO over just the last couple of years grow by 20%. And so we're actually moving in the wrong direction, which I think was pretty surprising. I mean, we're already surprised at the disconnect in the prior work. And the fact that the direction of travel is such that that gap is widening is obviously concerning.
- [09:50]
Host
You know, it's. It's been said on this show before, and it's been said really broadly. You know, one of the challenge. I'm sorry, beyond the show, which in the community, which is one of the challenges that today's CMO faces is, you know, to your data points, everybody thinks they understand marketing. Everybody thinks they're a marketer. But no, everybody tells the chief marketing officer what to do. Nobody tells the CFO what to do. Nobody thinks that they understand, you know, the rules of finance the way the chief financial officer does, with the possible exception, of course, of the board and the CEO. And it is that kind of. What do I call it, Monday morning marketing that just has such a deleterious effect on kind of the. Well, on growth. And speaking of growth, let's dive into that, because I know some of what you guys found, talked about, very specifically measured those who are aligned versus the enterprises that are aligned versus those that aren't, and what kind of the impact is on the bottom line.
- [10:57]
Expert
Go ahead, Kelsey, please.
- [10:59]
Kelsey Robinson
Yeah, we took a look at how was marketing kind of embedded in decision making and kind of Top teams. So that was. And then we took a look at how those companies perform, and what we found was if the marketing leader, you know, often that is the cmo. If the CMO is really embedded in strategic decision making.
- [11:20]
Shelley Stewart
Right.
- [11:21]
Kelsey Robinson
And they are right at that kind of E team table and making decisions with the CEO and their peers, that you see 1.4 times more growth in terms of revenue.
- [11:32]
Shelley Stewart
Right.
- [11:33]
Kelsey Robinson
And so when you look at the companies that really have that marketing and consumer voice at the table, there's a multiple factor on top of growth for them.
- [11:42]
Host
Yeah, a material multiple factor, totally. In a world where everybody's scratching for.
- [11:47]
Seth
Growth.
- [11:50]
Host
That'S not an inconsequential number, right?
- [11:53]
Kelsey Robinson
No, not at all. We also took a different cut at it, which was one of the things we should talk about is we also believe the marketing role has been pretty fragmented. So we talk about the CMO in many companies. I just had a conversation this week around, do we need one?
- [12:09]
Host
Do we need a cmo?
- [12:10]
Kelsey Robinson
Someone asked me that.
- [12:12]
Shelley Stewart
Right.
- [12:12]
Kelsey Robinson
And it's because there are all these other roles, the digital experience, the chief customer officer, the head of, you know, loyalty. Like, you can think about all these other roles that are really chief revenue officer, chief growth officer, where we've taken kind of what's classically been this kind of consumer remit in one role and really spread it out. And so one thing we looked at was for the companies that have that single kind of integrated customer role, call it a CMO or chief customer officer, either way, those companies grow over two times faster.
- [12:44]
Shelley Stewart
Right.
- [12:44]
Kelsey Robinson
So the multiple is even more dramatic. So the concentration of someone waking up and thinking about that accountability and growth through the lens of consumers or customers is obviously a growth driver, but many companies don't have that.
- [12:58]
Host
There's a great line, and forgive me, I don't recall if it's in the research itself, but it's certainly something that you shared when we talked about this in Ken, which is if everybody owns the customer, nobody owns the customer.
- [13:11]
Seth
Right.
- [13:11]
Host
And I'm wondering, wondering if you all have a point of view or kind of a guess even on, like, how did we get to, you know, this bifurcation, trifurcation of the role of kind of that ownership of the voice of the end user, the customer and prospective customer. What happened?
- [13:38]
Expert
I think, look, there's myriad factors. Let me give a couple. And Kelsey, you should build on it. One I already mentioned, which is as customers have spread out across different channels, that's created a level of complexity and that's not disconnected from the role of digital and digital engagement in bringing customers through the door. Well, one might say, well, hey, that's a different. That digital thing is a different skill set. Hey, we have someone that knows marketing, but this whole digital thing requires different competencies. And so then that starts to create a little bit of a bifurcation. Then when the different ways that marketers get to customers starts to proliferate, then one might say, well, the remit's growing too big, so we need someone that can really focus just on customer insights because, wow, this modern marketing thing is complicated. And so I think some of it is just an evolution driven by customers. Some of it is an evolution driven by, frankly, a much broader toolkit that marketers can use and that's kind of naturally led itself to more silos. And so I don't think the intent was anything nefarious or deliberate. I just think it's a little bit of an evolution. And we're at a moment now we can take a step back and say, what are the second and third order consequences of those silos? Which is why we thought that this research was so important.
- [15:02]
Host
Yeah, I'm sure there's no nefarious intent.
- [15:04]
Seth
Right.
- [15:05]
Host
Because it is, as I said in the introduction, it's so self defeating. But what I hear, and I suspect you're absolutely right, Shelley. What's interesting is it kind of proves the point, which is chief executives don't, in fact, know very much about marketing because they've allowed org design to get in the way of marketing and growth. But what I'm really hearing is kind.
- [15:30]
Seth
Of.
- [15:32]
Host
CMOs are not immune to this within their own organizations, but we're managing for channels rather than for growth. We're managing for specialty rather than for the holistic approach for the experience, if you will. And I couldn't help but as you were talking, thinking about a contractor, when you redo your house, you build a house. And I've done both, right? You got a general contractor who is there to bring all of the tools and skill sets needed together. Doesn't have to be an expert in every single one of them, but at least there's one person who's thinking about the whole fucking house, right? And how the plumbing and the electrical are sequenced and how they work together to give me a room that. A bathroom that. That works. And. And it just seems, I don't know why it hasn't occurred to me before, but it seems like that analog would be really in corporate America right now. And sorry, Kelsey, I think you're trying to say something.
- [16:31]
Kelsey Robinson
And I was going to say no, I think that's. I love the analogy. And you need the gc like the general contractor. And by the way, usually there's an architect involved. So like you think about and you could draw some corollaries to like, what's the vision for the brand, what's the Right. And then also what's the holistic consumer value proposition and what does it mean to be excellent in coordinated across channels to your point.
- [16:55]
Shelley Stewart
Right.
- [16:55]
Kelsey Robinson
There's all these, I think, layers to what I think we all believe great marketing is and looks like that has, I think, been eroded. And I sit here in this conversation and maybe this is a future podcast discussion or one you already have, have plan sets. But I think if we think about the current state and the advent of AI, I think we're also at a new, new risk for another era of further fragmentation.
- [17:21]
Host
You know, it's funny you say that, because I'm kind of hopeful, at least commenting on that. Just from the lens of data. My hope is that we're actually at the beginning of an era of synthesis where AI capabilities will be able to read across all of this data that is housed across all of these silos, across the marketing tech stack that was supposed to make everything simpler and just created dashboards. So I'm kind of hopeful, but honestly, as I hear myself say it, I don't know that there's any reason to be hopeful. But, you know, it's, I suppose, better than the alternative. All right, keep. Share some more of the key insights and then, then I have a few questions about, about some of them.
- [18:07]
Kelsey Robinson
Yeah, I think another really interesting piece of the research was what how do this, how does the CEO vs. CMO think about what marketing's accountable for?
- [18:19]
Shelley Stewart
Right.
- [18:20]
Kelsey Robinson
And we asked the CEOs and we asked the CMOs, how do you think about marketing's, you know, contribution to the business? And 75, 70%, 70% of the CEOs said, you know, there was a list of metrics, but on that they picked year on year, either revenue or margin growth. So like a very like tangible P and L driven mindset.
- [18:45]
Shelley Stewart
Right.
- [18:45]
Kelsey Robinson
Only 35% of the CMOs have that on their lists. And so there's this really stark disconnect between the two leaders in terms of are we expecting kind of a top line, even contribution as part of your core KPIs in terms of what you're driving.
- [19:07]
Host
So I got it. I'm sorry, Shelley, were you going to say something?
- [19:11]
Expert
I just think this goes back Seth to a little bit of the why or how do we end up where we are? I think the reality of it is in many organizations, marketing and marketing spend is seen as a cost driver, not a strategic investment that drives growth. And a lot of that is because the right measurement systems and incentives are not in place. That link back to how is this driving customer demand and ultimately sales.
- [19:47]
Host
I think you're right. And it's interesting. I have two. Two thoughts occurred to me as you guys were just speaking, you know, when Kelsey was talking about, you know, the difference in determinations, definitions of what accountability is, I couldn't help but think, you know, well, a. To what extent did the Chief Marketing Officer's answer reflect not their perspective, but the reality of their position within the organization that they're currently in? But that putting that aside for the moment, it's kind of like what does a CMO think they're accountable to if not growth, sustainable, profitable growth over time. And then, Shelley, is you talking about that, you know, long divide but only growing more so between whether it is seen as an investment or an expense. It does raise the question of if you only see it as an expense and you're the CEO, cfo, why are you making it? If you do not see return, why do you continue to spend in it? And so I can't help but wonder if there's some implicit, subconscious, even I don't want to say hypothesis that yeah, I may not get it, but I get that it works because otherwise cut the fucking expense and move on.
- [21:08]
Seth
Right?
- [21:09]
Expert
And by the way, I think that's exactly right. So a couple of reactions. I think, one, and Kelsey, you should weigh in here, but we should not let CMOs off the hook on this because I do have a hypothesis that there is a subset of that population who views it as their job to spend a budget. And if that is the I have an envelope, I'm going to deploy that envelope and that means a job well done. And so I think there's probably some of that that then created the perception, I suspect, and I have the privilege of looking after our own internal marketing for McKinsey, that there are instances where you have CEOs that because others are doing it, they may not be totally convinced of the roi, but they think that there is a chance, even if it's hard to measure. And so they go along. And so this is really about actually foster conviction based on facts and data that show that there is an roi. Otherwise I agree with you. Then an organization should stop doing it should not be Performative. Because that doesn't serve the shareholders, doesn't serve the employees, it doesn't serve the organization.
- [22:30]
Host
Yeah, like have the courage of your unconviction or inconviction.
- [22:34]
Expert
That's right.
- [22:36]
Host
And you know, you said something that I just want to reinforce, which is it's not, you know, it's a large subset of CMOs and a larger still subset of marketers and for lots of reasons, good, bad and otherwise, that do not understand that their job is growth, that do not understand that brand strategy is business strategy, or rather brand objectives are a business strategy.
- [23:01]
Seth
Right.
- [23:01]
Host
Differentiation is a business strategy that everything marketing does is and should be seen as a business strategy. And yeah, they've given the CFO and the CEO and the board good reason in many, not all. Of course, there are great, great influential Mark CMOs out there and marketers, but they've, they've created the permission to push them to the side.
- [23:26]
Kelsey Robinson
Yeah, I agree. I also think if you take a step back and you look at how we talk about the discipline at most companies, usually you call it marketing spend, media spend. It's not. Versus product development, versus Right.
- [23:42]
Host
Like.
- [23:42]
Kelsey Robinson
Like, I'm just thinking about, like, if you actually think about the P and L lines and what you call them, like in the conversation, it's what's the paid media spend, what's the marketing spend? And like that in and of itself shows you the mindset.
- [23:54]
Shelley Stewart
Right.
- [23:55]
Kelsey Robinson
Versus it's an investment in the future.
- [23:57]
Shelley Stewart
Right.
- [23:58]
Kelsey Robinson
And, you know, I think a lot of people are talking about the language we use around marketing for that reason. I also think, you know, I agree with both of you that there's a big, there's a kind of a big onus on the CMO to really kind of elevate. And you know, what we say is to think like a general manager, to kind of embrace the way that the CEO and the CFO kind of wake up in the morning to think about, I'm trying to drive the P and L, I'm the gm. How am I going to drive the business today? I think there's a big opportunity there. You know, at the same time, you know, I do have empathy for them in that the, the marketing's measurable. It's actually hard to explain to everyone who hasn't grown up in that discipline. And by the way, there are a lot of other things that impact the P and L that are hard to measure. And so I think there's this interesting push and pull between, okay, marketing, show me what you did. And yet I can't really quantify and measure a lot of the other things that drive revenue in the same way. And so I think that's one place where now, so what, it doesn't really change the action and the call to action that you guys just described to the CMO, but I think some CMOs get frustrated and a little stuck there.
- [25:04]
Host
I mean, I think you're right. And what it. I know you're right. What I'm thinking about is what, you know, the language you guys used in the beginning. Shelley, I think it was you, which is, you know, when you were talking about the CEOs who think they understand modern marketing. To understand modern marketing, or archaic marketing for that matter, and certainly. Well, and actually remains to be seen whether. Whether this will be true moving forward. But to understand marketing, you have to understand humans. You have to understand human behaviors and incentives and the things you can and cannot measure and for them. And I'm not sure, by the way, that's really fucking hard because people are really idiosyncratic and confusing. I don't even understand myself or my children or my significant other. Like, you know, how would a CEO understand a customer that they are not amongst.
- [25:51]
Seth
Right.
- [25:51]
Host
You know, and. And, you know, that's one of my pet peeves is those who comment on strategy when they're. They're not the target. But I want to go back. I want to tie a thread. Excuse me, Tie a thread together. At least I think it ties together. And see what you guys think about this, which is that if. And you said this just now and at the top.
- [26:13]
Seth
Right.
- [26:13]
Host
If others in the C suite view marketing as fundamentally tangential to a company's growth and quote, unquote, real business. I'm wondering what they consider central to growth and real business. If it's not marketing and what is it like, what are they prioritizing if not this?
- [26:36]
Kelsey Robinson
I mean, I think I can give a couple examples. I think in some cases it's the core product, whatever that might be, product development.
- [26:43]
Shelley Stewart
Right.
- [26:44]
Kelsey Robinson
So whether that's a consumer electronic, whether that's an item on a shelf.
- [26:48]
Shelley Stewart
Right.
- [26:48]
Kelsey Robinson
So I think there's. I do think that that's one area. You know, I also think digital experience is another area that gets investment and is believed to really drive growth.
- [27:01]
Shelley Stewart
You.
- [27:02]
Kelsey Robinson
Know, in whatever flavor that might mean as well.
- [27:05]
Host
Right.
- [27:06]
Kelsey Robinson
Like those are two examples where, like, I think they think of those as growth drivers, especially the first in terms of we are nothing without it.
- [27:12]
Host
Right, right.
- [27:16]
Expert
Go ahead, Go ahead, Shelley. Or they make significant investment in the sales and go to market component of driving revenue. Right. So they really index on our sellers, the selling motion as being the major lever to unlock value. By the way, it's an and for all of these things. But that's also something that I see a lot of.
- [27:40]
Kelsey Robinson
And that would be Certainly true in B2B and the B2C correlator could be stores.
- [27:44]
Shelley Stewart
Right.
- [27:44]
Kelsey Robinson
What's the asset like if you actually own like go to market and the footprint and like the true kind of assets, you own the place, the customer walks in.
- [27:52]
Host
I mean, as you guys answer this and I'm sure you're right about all of it, what I keep hearing is kind of further symptom, symptomatic of the bifurcation, trifurcation, fragmentation, siloization. I'm not sure that's a word, but let's make it one of kind of the customer and of growth.
- [28:12]
Seth
Right.
- [28:12]
Host
Because there wasn't a single thing you said, including sales, that I don't think to myself, well, that's all just marketing the store. We used to call that place when we had four P's. The product, we called that product. It was another P. And you look at Nike, for example, when John Donahoe was there and he forgot the importance of place, he forgot the importance of brand and the business suffered as a consequence. And I think again, we continue at an enterprise level. I say this all the time about CMOs and marketing, but at an enterprise level we confuse objective strategies and tactics and there isn't alignment, which of course is the thesis of the research and central to your insight. So let's move from how screwed up it is to where we kind of go from here as the world's largest companies. And I'd love for you guys to share a couple of stories or kind of anonymous case studies, anonymized case studies, you know, those who are doing it right. Like what can we leave people with besides like, oh, it's really messed up.
- [29:33]
Expert
Let me set the frame. And then Kelsey, you should give the examples. I think there are three things that we talk about in the research that are important. The first one is to what we say, give marketing custody of the customer. By the way, that could be the cmo, it could be the chief revenue officer. But someone needs to own the end to end view of the customer that they can then proliferate through the organization. The second is whoever that person is, they need to adopt a general manager mindset. So think about it as a business imperative that drives revenue. And the third is getting this interlock with the other executives, in particular the CFO around how we're going to measure and judge the success of these efforts. So at the high level, those are the big three. And Kelsey, I think you can talk through where some folks are doing this. Well.
- [30:26]
Kelsey Robinson
Yeah, I mean use two, two very different examples.
- [30:29]
Shelley Stewart
Right.
- [30:30]
Kelsey Robinson
So one example is an autoplayer new CMO kind of coming in. And in that moment he took it as the opportunity to basically address the things we just talked through. So did three things. One defined how marketing is measured super clearly. And that definition was a combination of what they called fast twitch metrics. So things that can show the businesses moving. I'm driving the P and L now and CLV or LTV metrics, things that matter that actually pay out in the long term. Let's hold hands on how we define and measure those things. So number one was what are the metrics and how do we educate people about them? Number two was in this case, and I think this is true for many especially large global companies, there's a portfolio of brands establishing the allocation approach in terms of what's the role of each of these brands and how do we think about how we decide how much to give each. That's actually a huge, huge, huge part of the marketing's job, so to speak. If you're take cpg, any of these portfolio based businesses and in our observation, many of those companies haven't gotten clarity around what's the role of every piece of our portfolio and therefore how do I think about investing in it and what am I expecting from it? Is it a high growth brand, is it a profitability driver? And therefore my marketing mix and my job to be done is different. So the second thing that he did was get really clear on what other role, like what role does each of these brands play and therefore how do we think about allocation, channel mix and the metrics we use. Going back to the first and then last thing is set a really clear cadence with this is how you guys are going to hold me accountable and how I'm going to share where we are. And on the surface these three things sound easy, right? But actually each one of those is really difficult. Defining the metrics across the measurement ecosystem, not easy. Hard, hard to understand. We've talked about that. Right Two, right. Actually getting clarity on how you allocate, that's also hard. And then three, getting people to show up and ask questions and be honest back to the point of not everyone understands this stuff. Actually having a forum where you're having a debate and discussion and some of that might come to light and that's okay. But we're here to kind of learn together and then make decisions. I think those three things are actually pretty difficult. I'll give one other example.
- [32:55]
Host
Just. Kelsey, before you go into the next example, I'm wondering to the extent you can share there any kind of two or three things that in that example were used as kind of key measurement, benchmarks, measures, metrics within that what you called fast twitch. And then ltv. I mean, LTV might be easier to understand, but were there any kind of like brilliant basics?
- [33:23]
Kelsey Robinson
Yeah, I think the faster twitch was more around as close to, you know, in the case of auto, you're not, you're not transacting.
- [33:31]
Shelley Stewart
Right.
- [33:31]
Kelsey Robinson
And so that, so it, you know, in many cases for many companies we work with, the fast twitch is actually, you know, close to purchase add to cart. It's almost like, you know, you're, you're actually truly getting that kind of purchase.
- [33:42]
Host
Almost pretty much real time.
- [33:44]
Seth
Almost.
- [33:44]
Kelsey Robinson
Yeah, yeah. I think here it was closer to like the lead generation and. Or the going in to dealer.
- [33:51]
Shelley Stewart
Right.
- [33:51]
Kelsey Robinson
And so think of that as basically as close as you can get without going in and test driving the thing or, you know, talking to a sales rep.
- [33:58]
Shelley Stewart
Right, yeah.
- [33:58]
Host
Which, which by the way just brings me back to your point earlier about product, which is you go into the dealer, you don't get that car, you get a competitive car. Oftentimes marketing is blamed when it was they didn't like the car.
- [34:14]
Kelsey Robinson
And that's exactly the point I was making around. There's so many other P and L drivers. But then how do you measure that? Oh, well, we measure product market fit, we measure consumer response and kind of their feedback on the product. That is also hard to measure.
- [34:28]
Shelley Stewart
Right.
- [34:29]
Kelsey Robinson
But it's interesting that sometimes the conversation isn't robust enough on the other P and L drivers.
- [34:36]
Shelley Stewart
Right.
- [34:36]
Kelsey Robinson
And that was a little bit in defense of the cmo. And then, yes, CLV drivers in that case would have been more like exploring kind of depth of an engaged visit around Discovery for maybe like a new release. Right. There's all these other things that are around you're seeding and introducing with the kind of quality engaged visit, a digital introduction to a new part of our fleet.
- [34:57]
Shelley Stewart
Right.
- [34:57]
Kelsey Robinson
That is something that's going to pay off.
- [34:59]
Shelley Stewart
Right.
- [35:00]
Kelsey Robinson
In the future for sure. But it's not going to deliver dollars in the next month.
- [35:05]
Host
Yeah.
- [35:06]
Kelsey Robinson
You know, say one other really exciting example and I think inspirational example was a payments company, digital payments company, and they actually Spent like five months just getting the metrics right. And it sounds crazy, but they really felt we have multiple different business units. Everyone thinks they understand how marketing's measured. Really all they understand is locks, click, attribution. And we need to get in there and like, we are going to go almost. We're going to hunker down, we're going to define and kind of ambitively prove to ourselves the metrics we think matter. And then we're going to go and we're going to socialize that across the organization and then we'll do the testing and then we'll set up the governance. And then. And they broke it down to, okay, what are the business outcomes we're trying to drive? What are the customer actions that we're trying to drive? What demand metrics or kind of demand gen metrics do we care about? And then there was marketing delivery metrics. And so they kind of created this taxonomy of like, if the North Star is, you know, marketing roi, sure. But there's all these other components of how we're going to measure. And here's. And they went around and they educated the organization on how do we measure and use these things and how are we holding ourselves to be continually better and continually optimizing against every layer.
- [36:27]
Host
And in these examples, you've. I mean, recognizing that one may be that they both may be relatively nascent in terms of when the alignment was ultimately created. Are. Are these enterprises, are they seeing growth? Are they seeing kind of an unlock of, of growth catalysts because they've gotten onto the same page?
- [36:47]
Kelsey Robinson
Yes. Yep. Totally. Both of them.
- [36:51]
Host
So, as my grandmother used to tell me, the proof is in the pudding. I love that.
- [36:59]
Seth
So.
- [37:01]
Host
Anything else before we say goodbye for now, you guys? Anything that you think our audience should be keeping in mind and know you've covered it.
- [37:13]
Expert
I think we covered it all. But I do think, Seth, you said something that I think is important in this moment, which is how do we use what's happening with AI and technology as a reset that works in service of greater alignment, easier systems of measurement, and really supercharged growth as a result of this change? Because as Kelsey said, there's some risk that there's even more complexity and we go the other way. So how do we use this moment and really lean in?
- [37:46]
Host
I mean, I think, I think what you're kind of saying, Shelley, is so important kind of as everybody, everybody looks forward and I've been thinking about this, you know, pretty much nonstop for six months with no conclusion. And I'll summarize the this or define the this that I've been thinking about by borrowing words from my friend Mike Linton, who asked the other day, is marketing still marketing?
- [38:19]
Seth
Right.
- [38:19]
Host
And how will or will marketing still be marketing? The fundamentals that have gotten us to 2025, which of them? All of them. Some of them. How, where, why, when, etc. Are still going to be relevant in this drastically different commercial landscape, right. Where search, discovery, commerce are just being completely disrupted, consumer attitudes and behavior completely disrupted, enterprise behavior is completely disrupted. And you know, I think our, our audience knows I'm writing a book based on, with the same title as the show, right. Which is what is the CEO's guide to marketing. And I can't help but think as I write this book about what may or may not be relevant 18, 24 months from now when the book comes out. Because. And I wouldn't have said that a year ago, right. But things have changed to that point. And I think, I think in, in distinction, we lose commonality. And I think what I'd, I'd offer, you know, everybody to consider is the job of the CEO and the CMO are ultimately the same. Which is to say both jobs require capital allocation, human, economic and time to drive return on investment for the company.
- [39:43]
Seth
Right.
- [39:43]
Host
For the shareholders and the stakeholders. So while both have the same role broadly, if they're not aligned on the same ends.
- [39:54]
Seth
Right.
- [39:55]
Host
They don't share all the things that you've talked about. That's where it obviously goes awry.
- [40:00]
Seth
Right.
- [40:01]
Host
And CMOs who are not in the business of expectation management and the two examples you gave Kelsey, he, those two clearly were, are just, they're not likely to succeed given everything else that's already stacked against them. And on that happy note, a cautionary tale. But honestly, you know, going back to something you guys said, there's a lot of common sense in this for both the chief executive, the cfo, the board and the cmo. And if you just think that silos and fragmentation do not serve integration and integration serves growth, you're already a step ahead than, you know, where we were 45 minutes ago. So thank you both. Well, thank you both obviously for being here. But like, I appreciate the research and the work that you all are doing. I appreciate that in this space. I appreciate that you took like we're hearing and seeing things that are not conducive to everybody's presumably shared end game. Let's break it apart a little bit. And I'm already excited to see what next year's report brings thanks for having us. And thanks everybody, for joining this episode of the show. You know what I'm going to say? I'm going to say, smash that subscribe button, shout out to my kids and please do leave it a rating and a review. Reviews help us game the algorithm and we are all at the mercy of algorithmic destiny and reach other people who might be interested in the show. Thanks for paying attention. We'll see you next time. Bye.