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Worldw ide Chief Marketing Officer 2013 Top 10  Predictions: Today's CMO Becomes Master of Data
Worldw ide Chief Marketing Officer 2013 Top 10  Predictions: Today's CMO Becomes Master of Data
Worldw ide Chief Marketing Officer 2013 Top 10  Predictions: Today's CMO Becomes Master of Data
Worldw ide Chief Marketing Officer 2013 Top 10  Predictions: Today's CMO Becomes Master of Data
Worldw ide Chief Marketing Officer 2013 Top 10  Predictions: Today's CMO Becomes Master of Data
Worldw ide Chief Marketing Officer 2013 Top 10  Predictions: Today's CMO Becomes Master of Data
Worldw ide Chief Marketing Officer 2013 Top 10  Predictions: Today's CMO Becomes Master of Data
Worldw ide Chief Marketing Officer 2013 Top 10  Predictions: Today's CMO Becomes Master of Data
Worldw ide Chief Marketing Officer 2013 Top 10  Predictions: Today's CMO Becomes Master of Data
Worldw ide Chief Marketing Officer 2013 Top 10  Predictions: Today's CMO Becomes Master of Data
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Worldw ide Chief Marketing Officer 2013 Top 10 Predictions: Today's CMO Becomes Master of Data

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  • 1. Filing Information: January 2013, IDC #238987, Volume: 1 CMO Advisory Service: Top 10 Predictions T O P 1 0 P R E D I C T I O N S W o r l d w i d e C h i e f M a r k e t i n g O f f i c e r 2 0 1 3 T o p 1 0 P r e d i c t i o n s : T o d a y ' s C M O B e c o m e s M a s t e r o f D a t a Richard Vancil Kathleen Schaub Gerry Murray P R E D I C T I O N S 1. The C-suite (CEO, CFO, and COO) will demand that the CMO produce both a strategy and a plan for how market-driven data will significantly contribute to corporate objectives. 2. The CMO and the CIO will begin the year as functional peers and end the year as either friends or frenemies, and per the CEO, the CIO will become more actively involved with the CMO in all marketing automation decisions that have cross-functional implications. 3. The automation outlay could approach 10% of marketing's discretionary budget in 2013, with two-thirds of the total outlay coming from marketing and one-third coming from IT; for "best practice" organizations, this will shift to 50:50 by 2014. 4. Even with their new partnership with the CIO, many CMOs will find that their positions are in jeopardy as they failed to produce a robust data analytics function — or even a game plan to get there. 5. Starting in 2013, after the CMO realizes that he/she does not have the skill sets in place for data analytics proficiency, 50% of new marketing hires will have technical backgrounds. 6. Eight out of ten companies will report that most social media initiative growth is taking place outside of marketing. 7. By the end of 2013, 5% of CMOs will shift to a "mobile first" strategy. 8. Content isn't king — it's a wild beast; In 2013, CMOs will be pragmatic, shifting focus less on big platform projects and more on linking access to audience needs. 9. The demand for greater insight into the revenue impact of marketing and sales will require that older CRM systems be replaced, creating infrastructure disruption. 10. High-tech pipeline conversion metrics will continue to improve; expect a 20% improvement in target-to-deal ratios and a 10% reduction in time to create a customer, with both due to better automation and analytics-driven process improvement. GlobalHeadquarters:5SpeenStreetFramingham,MA01701USAP.508.872.8200F.508.935.4015www.idc.com
  • 2. ©2013 IDC #238987 1 I N T H I S S T U D Y This study provides IDC's top 10 predictions for the chief marketing officer (CMO) and senior marketing roles for 2013. The document offers the views of IDC's analysts for the major transformational areas that are affecting the marketing function. S I T U A T I O N O V E R V I E W The stakes are going up for the marketing function. The successes or failures of marketing, which is often left to its own devices to practice its "arts," will now be fully illuminated across the company. The main reason for this is the self-educated buyer. With more digital and social resources than ever before, buyers in all product and service categories are disrupting traditional marketing. In their process of self-education, buyers leave a huge wake of activity data. This data includes what they know and don't know, where they have been on the quest for information, and where they are headed next. The marketing areas need to capture and analyze these data wakes. The ability to do so is not just a "bet the marketing department" issue; it's a "bet the company" issue. And for those who do not believe that, just look at the number of companies and industries already transformed by the Internet. And then multiply that rate of change by 5 times or more — and you are looking at the near future. F U T U R E O U T L O O K The sections that follow provide details on each of IDC's 2013 top 10 predictions for CMOs. 1 . T h e C - S u i t e ( C E O , C F O , a n d C O O ) W i l l D e m a n d T h a t t h e C M O P r o d u c e B o t h a S t r a t e g y a n d a P l a n f o r H o w M a r k e t - D r i v e n D a t a W i l l S i g n i f i c a n t l y C o n t r i b u t e t o C o r p o r a t e O b j e c t i v e s During 2013, the top brass of the organization are going to start worrying about the ever-more-powerful self-educated customer. Does our organization know how to capture this new customer? Is our company ahead or behind our competitors on this capability? What are the threats to our company? Does our company have unique skills or capabilities that we can exploit? It will be these types of questions that the CEO will think about in his/her conversations and plans with the CMO. IDC believes that these are going to be candid and difficult conversations between CEO and CMO. In many situations, the CEO may determine that his/her current marketing organization is just not up to the task.
  • 3. 2 #238987 ©2013 IDC 2 . T h e C M O a n d t h e C I O W i l l B e g i n t h e Y e a r a s F u n c t i o n a l P e e r s a n d E n d t h e Y e a r a s E i t h e r F r i e n d s o r F r e n e m i e s , a n d p e r t h e C E O , t h e C I O W i l l B e c o m e M o r e I n v o l v e d w i t h t h e C M O i n A l l M a r k e t i n g A u t o m a t i o n D e c i s i o n s T h a t H a v e C r o s s - F u n c t i o n a l I m p a c t The CMO's first stop — after that very tough conversation with the CEO — might be at the doorstep of the CIO. ("Help!") The CMO's role of "yesterday" did not require mastery of complex data management. Most of marketing's attention was to the outbound execution of programs and campaigns, where data management mostly centered on good list management. But now, against the CEO's mandate, the CMO wants full capability for the inbound tracking and analysis of customers and prospects as they weave their way through a variety of digital and social channels. The CMO begins this journey into marketing automation with the problematic reality of attaining the current "single version of the truth" regarding customer data and the customer record. These will be hard conversations between CMO and CIO. The CMO may be feeling the panic of time pressure. The CIO may be looking at "yet another mouth to feed" when the CMO comes knocking. An additional impediment might be style or chemistry. The CIO is likely a process-oriented engineer who needs to be judicious with time and resources for all of his/her internal functional clients. The CMO may be less process oriented, and in some cases less than capable of even articulating the IT requirements that the marketing function has developed. The CMO may feel thwarted by IT legacy, management systems and processes, and company culture. 3 . T h e A u t o m a t i o n O u t l a y C o u l d A p p r o a c h 1 0 % o f M a r k e t i n g ' s D i s c r e t i o n a r y B u d g e t i n 2 0 1 3 , w i t h T w o - T h i r d s o f t h e T o t a l O u t l a y C o m i n g f r o m M a r k e t i n g a n d O n e - T h i r d C o m i n g f r o m I T ; F o r " B e s t P r a c t i c e " O r g a n i z a t i o n s , T h i s W i l l S h i f t t o 5 0 : 5 0 b y 2 0 1 4 Contrary to other corporate functional areas, where IDC expects to see more functional control of IT spend, the marketing area is in a different position. The marketing LOB starts from a point of high automation independence from a budget and operational standpoint. The customer data mastery quest becomes not just a marketing issue but an all- company issue that traverses LOBs. The orbits of the CMO and CIO are now going to intersect, and logic would have it that it is not likely that the total companywide outlay for marketing IT swings even further toward the marketing budget. Some software applications can comfortably remain just in the marketing function. For example, why would the IT department need to get involved in supporting social listening software? But CMOs are struggling with the software apps that cross LOB boundaries, and this is where we expect to see more CIO involvement and budget outlay.
  • 4. ©2013 IDC #238987 3 4 . E v e n w i t h T h e i r N e w P a r t n e r s h i p w i t h t h e C I O , M a n y C M O s W i l l F i n d T h a t T h e i r P o s i t i o n s A r e i n J e o p a r d y a s T h e y F a i l e d t o P r o d u c e a R o b u s t D a t a A n a l y t i c s F u n c t i o n — o r E v e n a G a m e P l a n t o G e t T h e r e The days of the black-turtlenecked CMO are gone — the artful marketer with no/poor ability to plan, budget, measure, and report. Today, most CMOs have to be a passably good businessperson in addition to a great marketer. In 2013, IDC predicts that the bar of CMO job tenure will be raised even higher. The problem is, a non-technical executive will not magically morph into a data master overnight. So the CMO is going to have to enjoin the CIO (see prediction #2) and put enough technical talent around him/her (see predictions #3 and #5) to become proficient. In IDC's opinion, neither of those scenarios is going to happen at a pace that is satisfactory to the CEO (see prediction #1), so in 2013, more CMOs will be "made redundant." 5 . S t a r t i n g i n 2 0 1 3 , A f t e r t h e C M O R e a l i z e s T h a t H e / S h e D o e s N o t H a v e t h e S k i l l S e t s i n P l a c e f o r D a t a A n a l y t i c s P r o f i c i e n c y , 5 0 % o f N e w M a r k e t i n g H i r e s W i l l H a v e T e c h n i c a l B a c k g r o u n d s Marketing needs to have people who understand both marketing and IT systems. These new hires are very difficult to find. For the moment, CMOs often need to "import" people with technical and operational skill sets from other functions into their department — and then train them on marketing. And all of the current and emerging tools need good technical marketers to extract the benefits: campaign management, Web, sales enablement, content management, collaboration, social, and mobility — a huge number of different software applications. Marketing needs to understand IT, and, conversely, IT needs to start understanding the dynamics of marketing and customer engagement. Eventually, every marketing function needs to learn and use technology. You can have a shared services function to some degree, but marketers need to start becoming more technically literate than they are today. 6 . E i g h t O u t o f T e n C o m p a n i e s W i l l R e p o r t T h a t M o s t S o c i a l M e d i a I n i t i a t i v e G r o w t h I s T a k i n g P l a c e O u t s i d e o f M a r k e t i n g The term "media" in social media may cause people to mentally leap first to the marketing mix. Marketers, particularly in progressive industries, exhibit an overwhelming interest in the use of social media for advertising, influencing the influencers, lead generation, and nurturing. But is the social revolution really about marketing?
  • 5. 4 #238987 ©2013 IDC IDC believes that other functions, outside of marketing, will aggressively adopt social communication channels. Easily accessible and inexpensive, social media is hugely beneficial to anyone in the company who communicates. Social is sprawling everywhere. R&D teams crowd-source innovation and mine customer communities for insight. Sales teams and corporate recruiters seek connections from LinkedIn. Customer service groups watch Twitter for early warnings and leverage customer- provided content to lower the cost of support. Far-flung project teams collaborate using a long list of sharing technologies. Companies are just beginning to realize the implications of the extremely fast and pervasive adoption of social technologies. Social media may actually be more difficult for marketing to take on than other business functions. Social represents a shift in marketing norms (what's acceptable and what's not). Marketers must learn new ways to engage. The proliferation of social dramatically reduces the ability of a company to control its brand and reputation. Social media accelerates the ability for consumers to break away from a vendor's managing influence. To commercially benefit from the immense social forces, CMOs must shift from a "make and sell" mentality to a mentality that draws on "sense and respond." This shift is huge. IDC believes that while CMOs may not be their company's fastest or even largest users of social media, social media's marketing power is transformational and must be faced more aggressively. 7 . B y t h e E n d o f 2 0 1 3 , 5 % o f C M O s W i l l S h i f t t o a " M o b i l e F i r s t " S t r a t e g y Smart mobile devices (SMDs) — those carried by people and those embedded in our world — explode the wealth of interaction capabilities available to marketers. Mobility is pervasive, cutting across demographic trends and geographical reach. Mobility is fast growing — with adoption much more rapid than previous IT shifts. Mobile devices are the ultimate in "personal" computing and their users develop a strong attachment to them. People spend more time with their mobile devices, offering an opportunity for a deeper interaction quality than for those that are stationary. Smart mobile devices are in one sense another incremental, albeit important, "screen" for communications or apps. Even at this level, smart devices are an important new content channel for many CMOs. For example, brands have more relevance when experienced on multiple screens. Other successful uses include sales enablement, enhancing event and retail experiences (online in-store), and product demonstrations at the decision point, in addition to mobile ads and mobi-sites. IDC recommends that CMOs establish mobile channels that are on par with stationary channels and not make mobility a second-class afterthought. Desktop experiences do not transfer well to the small screen. Once the marketing team establishes some core expertise, the next step is to branch out into mobile-unique experiences that differentiate.
  • 6. ©2013 IDC #238987 5 8 . C o n t e n t I s n ' t K i n g — I t ' s a W i l d B e a s t ; I n 2 0 1 3 , C M O s W i l l B e M o r e P r a g m a t i c , S h i f t i n g F o c u s L e s s o n B i g P l a t f o r m P r o j e c t s a n d M o r e o n L i n k i n g A c c e s s t o A u d i e n c e N e e d s One of marketing's most fundamental functions is to produce content, that is, to produce information meant to be distributed. Therein lays the conundrum. Marketers produce exabytes of content each year, often feeling like they are on a hamster wheel of expectations. Yet the audiences for this content — customers and salespeople — are increasingly challenged to excavate value from this abundance. CMOs are well aware of the need to tame the content beast. Content management systems (CMSs) are far from completely adopted. However, the category is growing fast and is expected to reach a CAGR of 7.2% over the next five years. Early adopter CMOs have sent out the warning that big content warehouses, no matter how carefully meta-tagged, do not work. Instead, content must be linked to something meaningful. Marrying content to a business process is one solution. Sales enablement will increasingly take place within the existing infrastructure of the sales organization's applications. Sales reps will be automatically fed relevant and high-quality content and intelligence within their sales force automation system as they progress along the buying process as mapped out in their sales methodology. Marrying content to customer experience is another solution. Web content management vendors are adding new functions to achieve this goal, including personalization, testing, social marketing, advertising and audience optimization, and much more. Increasingly, leading CMOs are guiding their teams to identify relevant personas and map content to buyers' journeys. Analytics capabilities provide insight into the "next best offer" and most useful content. IDC believes that 2013 will see a reduction in content creation due to more content management linked to strategies such as sales processes and buyers' journeys. CMOs will save budget. Marketers will leave the treadmill. Salespeople will be more productive. Customers will save time and be less frustrated. 9 . T h e D e m a n d f o r G r e a t e r I n s i g h t i n t o t h e R e v e n u e I m p a c t o f M a r k e t i n g a n d S a l e s W i l l R e q u i r e T h a t O l d e r C R M S y s t e m s B e R e p l a c e d , C r e a t i n g I n f r a s t r u c t u r e D i s r u p t i o n The insights needed to find the best customers require marketers to understand how future stages of the marketing funnel and sales pipeline perform on a lead-by-lead basis. This insight comes in the form of analytical models based on large amounts of customer data — not necessarily Big Data, but certainly much more, faster moving data than ever before.
  • 7. 6 #238987 ©2013 IDC According to CMO Advisory Service Best Practice Series: Predictive Analytics for Marketing (IDC #238417, January 2013), the results are compelling:  A major enterprise software vendor added 200 million euros to its revenue line without adding sales staff.  A major sports and entertainment Web site boosted subscription revenue by 45% without increasing its marketing program spend.  One of the Web's most popular financial services sites drove $10 million of new revenue with simple changes to its customer experience road map. The links between marketing, sales, finance, fulfillment, and service and support are critical. These systems must increasingly share standard practices for data governance and analytical processing. Enterprise ownership and management of the customer creation process are necessary for sustainability. Past investments in departmentally focused systems with customized data structures and processes will prevent the fast and efficient flow of customer data necessary to optimize marketing and sales activity. Process inflexibility is the real killer. Many organizations can fix the data problem, but if they can't implement changes in business rules without breaking multiple process dependencies downstream, the system is an inhibitor to innovation and has to go; 15% of IDC's CMO Advisory clients replaced CRM systems in 2012 for this reason. IDC expects this trend to continue. 1 0 . H i g h - T e c h P i p e l i n e C o n v e r s i o n M e t r i c s W i l l C o n t i n u e t o I m p r o v e ; E x p e c t a 2 0 % I m p r o v e m e n t i n T a r g e t - t o - D e a l R a t i o s a n d a 1 0 % R e d u c t i o n i n T i m e t o C r e a t e a C u s t o m e r , w i t h B o t h D u e t o B e t t e r A u t o m a t i o n a n d A n a l y t i c s - D r i v e n P r o c e s s I m p r o v e m e n t 2012 represented an inflection point for technology marketers with regard to lead management. Huge improvements were made. IDC believes that this success comes from CMOs implementing marketing automation technology, making critical improvements to processes, and employing staff in key positions and with critical pipeline-related skills. These transformations will escalate in 2013 and result in further gains. Pipeline metrics for the most advanced companies will improve even more than IDC's prediction. The most advanced CMOs will use analytics to optimize their pipelines for tasks such as determining the "next best offer." However, 2013 will also see a large number of pragmatist-type companies in the early stages of automating and tracking, and these entries will throttle the average. In 2012, for the first time since IDC began to measure pipeline conversion rates and pipeline velocity, those two key performance indicators improved instead of degraded. In 2012, velocity for value leads (prospects from companies of 1,000+ employees) from target to deal maintained at 19.1 months instead of lengthening as in years past. In 2012, the average number of value account targets required to create one deal decreased to 650 from 1,070. Other improvements included the percentage of leads
  • 8. ©2013 IDC #238987 7 provided by marketing to sales and the number of leads touched by marketing. IDC also found that more companies were able to report these metrics, indicating an increased level of operational control. As marketing teams become more sophisticated in their approach to lead management, the old "funnel" (invented in 1899) will become less recognizable. Advanced pipelines now resemble science-driven supply chains. Marketers are meeting prospects earlier in their buying journeys. Strategies such as personas and segmentation will be used to gate the pipeline using higher criteria for acceptance. Marketers, aided by analytics and the human touch of tele-staff along with social media engagement and chat, will nurture prospects longer in the marketing pipeline. However, this will have the result of improving sales productivity so that the sales pipeline will get shorter. E S S E N T I A L G U I D A N C E Over the next three years, professional marketers are going to see as much disruption and change as they likely have experienced in the totality of their careers to date. There is just too much that is lining up for this not to happen: social technologies, mobile technologies, smarter customers, and a flood of new marketing automation and analytical software to deal with it all. IDC's guidance for CMOs and their senior teams is:  Do a hard and candid assessment of the technical talent within yourself and within your team. Use a rule of thumb that 50% of any new hires must have technical backgrounds. And partner with the CIO organization so that the IT strategy and tactics for the marketing function become shared and unified.  You will need technical ken to capture and master customer data in the sense of predictive analytics. You will also need (some, but less) technical competency to move marketing content into social and mobile channels.  Work with a sense of urgency. This is going to be a fast race among industry peers/competitors. L E A R N M O R E R e l a t e d R e s e a r c h  The CMO + CIO Imperative: Building a Productive Relationship in the Digital Age (IDC #WC20121025, October 2012)  Data-Driven Marketing: A Survey of Marketing Automation Maturity in Global High-Tech Companies (IDC #236289, August 2012)  Emerging Issues: The New CMO + CIO Dialog: Building a Productive Relationship (IDC #236397, August 2012)
  • 9. 8 #238987 ©2013 IDC S y n o p s i s This IDC study is part of IDC's annual top 10 predictions series and focuses on the outlook for the chief marketing officer (CMO) job role. The theme of the study is that the CMO of the future will have to be a "master of data" — capable of collecting and analyzing the streams of data that buyers create as they travel through digital and social pathways. It is IDC's contention that, in general, this is going to be a difficult journey for many CMOs and their teams as they lack the technical resources to master these skills. As such, a CMO and CIO liaison will need to form, and hiring of technical marketers will ramp up. According to IDC Group Vice President Rich Vancil, "The challenge for the CMO is dealing with self-educated buyers. These are the smart, resourceful, and socially connected consumers who do their own research before ever entering the formal channels of a vendor's marketing and selling apparatus. In the wake of all of their self- education is a stream of data that the CMO will have to understand. How much do these buyers know"? Where have they been in their education quest? Where are they going next? What is their sentiment about our products or services?" "And so the CMO has to become a master of data. The ability to do so is not just a 'bet the marketing department' issue: it's a 'bet the company' issue. And for those who do not believe that, just look at the number of companies and industries already transformed by the Internet. And then multiply that rate of change by 5 times or more — and I think you are looking at the very near future." C o p y r i g h t N o t i c e This IDC research document was published as part of an IDC continuous intelligence service, providing written research, analyst interactions, telebriefings, and conferences. Visit www.idc.com to learn more about IDC subscription and consulting services. To view a list of IDC offices worldwide, visit www.idc.com/offices. Please contact the IDC Hotline at 800.343.4952, ext. 7988 (or +1.508.988.7988) or sales@idc.com for information on applying the price of this document toward the purchase of an IDC service or for information on additional copies or Web rights. Copyright 2013 IDC. Reproduction is forbidden unless authorized. All rights reserved.

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