Marketing deserves more than a seat at the table

Put marketing back where it belongs.

According to a McKinsey report, 90% of CEOs have no marketing experience whatsoever. 

Which? Fine. Some of my best friends have no marketing experience whatsoever. However, according to the same data, less than 40% of Fortune 500 companies even have a CMO.

In over 60% of Fortune 500 companies, marketing does not have a seat at the most important table. That’s a problem. 

Because brands cannot reach their full potential when marketing is left out of the room. Even Fortune 500 brands.

Marketing is your brand’s main driver of product innovation, profitability, pricing power, market share growth and share value. Marketing is the most effective lever you can pull. Actually, it’s four levers, because marketing is much more than comms. We’re talking about all four Ps — Product, Pricing, Placement and Promotion.

And unlike finance or sales or product innovation, marketing represents the consumer. Remember them? They’re still important. 

More than 2/3rds of global GDP still depends on consumer spending. Customers still matter. 

But consumer behavior doesn’t fit neatly on a spreadsheet. Consumers are inefficient and unpredictable. They defy nearly all rational attempts to get them to do what you want, which is why finance doesn’t trust them.

Consumers are people, people are human, and humans are wildly complicated. Illogical. Emotional. People make emotional decisions and backfill them with reasons that are mostly just-so stories. That means great marketing is not and cannot be efficient.

What does Jean-Claude Van Damme doing the splits between two big trucks tell us about Volvo? 

It tells us that Volvo is so audaciously confident that they’re willing to risk the life of a beloved martial arts actor and Belgian national treasure. They have their shit so supremely together that they’re having fun. 

What does strapping a Fitbit to a chicken tell us about Honest Eggs Co.? What does it tell us that they print the average daily step count on each egg? 

By redefining “free range” to mean “actually free to roam, like, for miles”, Honest Eggs Co. is supremely confident in their farming practices, the happiness of their birds and the quality of their eggs.

No one else but Volvo would ever think of dangling a truck from a helicopter with their president standing on the front of the cab. And not many presidents would be willing to put that much skin in the game. It’s a massive signal of trust and quality.

Honest Egg Co’s larger competitors are happy to print “free range” on their egg cartons. But they can’t strap Fitbits on their chickens and print the step count on their eggs because it would give the lie to the phrase “free range.” 

Brands must have skin in the game.

Old Spice gave us the wildly inventive “The Man Your Man Could Smell Like” campaign because they are supremely confident in their product and their ability to make us laugh. And it was a Super Bowl ad — the perfect example of the medium being the message. Old Spice stamped their authority all over the category. 

It’s peacocking. Humans do it every day. The only reason someone spends $1.5 million on, say, a watch is to let people know they spent $1.5 million in one of the most pointless ways imaginable. It is not efficient, but as a signal it is effective.

Efficiency has a role to play, but it is not and cannot be a driver of growth. For example, what’s the easiest way to boost your ROI? Spend less on marketing. As a percentage, ROI goes way up, but it does nothing to help your actual bottom line. It’s dead easy to ROI your way into the grave.  

I’ve talked to CFOs, CEOs and CMOs from brands of all sizes in all kinds of categories, public and private. The most successful companies champion their marketers. And I’m not alone.

According to that same McKinsey report, “CEOs who place marketing at the core of their growth strategies are twice as likely as their peers to have greater than 5 percent annual growth.”

CMOs and marketing are more than critical 

When done right, marketing drives incremental, profitable growth. Sales does not. Customer service doesn’t (though customer service should fall under marketing because it is a critical brand touchpoint for consumers, but that’s another Dispatch for another day). Finance doesn’t because finance cannot drive growth. 

Marketers have to take the lead … and assume all the responsibility that comes with it.

Because what finance people tend to consider waste and inefficiencies are opportunities to make smarter, more consistent and more effective swings.

If you have a CEO and CFO who already understand this, fantastic. If not, this next series of the SRH Empirical Marketing Dispatch is for you.

Over the next few weeks, we’ll explore some of the knottier problems marketers face, including how marketing can win back its rightful place in the C-suite.

See you next time!

Sources!

1. Analyzing the CEO/CMO relationship and its effect on growth – McKinsey.com