Digital transformation and positive long-term brand health are two of the core issues CMOs are struggling with today. This is because brands are placing more importance on short-term strategies and digital transformation, as we all are aware, is a long-term process.
Further fuelling this short-term thinking is the rise of ad tech which drives focus on short-term, measurable ROI and optimisation. As such, nearly two thirds (64%) of the CMOs surveyed by Dentsu expect to see more pressure to demonstrate tangible short-term results in the next two to three years. The growing focus on short-term return on investment is well documented and around half the 1,000 CMOs surveyed say they will increase investment in the likes of Facebook, Google, Tencent, WeChat and Baidu over the next two to three years.
The future promises more of the same, with nearly two-thirds (64%) of CMOs predicting that they will be under further pressure to demonstrate tangible short-term results.
The survey also added that CMOs are often simply not incentivised to deliver long-term change.
In terms of performance metrics, they’re primarily accountable for growing the customer base, while medium or long-term brand health and digital transformation are way down the pecking order. Coupled with the fact that, in many markets, CMOs often “enjoy” the shortest average tenure of anyone in the C-suite (around three and a half years in the United States, for example) there is little reason for many CMOs to look beyond the near-term.
In addition, leading disruptive innovation and delivering business transformation was also ranked the lowest in the roles carved out for CMOs. Nearly half of those surveyed said that marketing strategies are planned for two years ahead or less.
Strikingly though, high-growth companies tend to have CMOs more focused on the long-term.
Among companies that have seen revenues grow more than 10% in the last year, more than half (53%) of CMOs are primarily accountable for medium/long-term brand health. Among those where revenues have fallen by more than 10% in the last year, this falls to a quarter.
Takaki Hibino, APAC executive chairman, Dentsu Aegis Network said brands globally have invested heavily in digital but have yet to reap the rewards as short-term metrics rather than driving digital transformation continues to dominate the marketing function’s focus and priorities.
He added that in Asia Pacific however, CMOs are leading the curve with business transformation. It has been positioned as function’s top three priorities, and CMOs in the region being more likely to plan their marketing strategies over the long term. According to Hibino, this creates a real opportunity for CMOs in this region to embed the digital transformation agenda and drive the future capabilities the region depends on for growth.
Pivoting towards a new era of innovation and transformation, the report said that this would require brands to combine capabilities across several key areas. The ability to move quickly while maintaining a long-term perspective is essential in the post-optimisation era. This means that brands need a more comprehensive approach to performance management, combining metrics across different time horizons that value both the tangible and intangible. It also means balancing agile innovation with more traditional, centrally driven approaches.
Brands can’t operate entirely in a start-up mode.
According to the study, long-term investment is currently still lacking within brands. CMOs need to operate across multiple timelines to position brands for long-term, sustainable growth. In addition, an inability to transform quickly enough is now the second barrier to delivering marketing strategy, jumping from the fifth position in 2018.
The driver of trust in digital businesses still derives down to transparency. According to Dentsu, CMOs however rank consistent delivery as the highest, with nearly two-thirds (63%) believing it to be important. This disconnect further emphasises the need for brands to adapt quickly to changing consumer attitudes, as well as strike a balance between openness and control.
Moreover, about three-quarters of CMOs said that associating their brand with a social purpose will be important to engaging consumers in the future. This can be seen evidently as both local and global brands are taking on sustainability efforts.