1) Marketing professionals and CMOs will face increased scrutiny and pressure to prove their accountability and deliver results in 2013, as the global economic outlook remains uncertain. 2) CMOs need to streamline marketing operations, make budgets work harder, and justify spending to increase ROI, while also listening more to consumer feedback. 3) To regain control, CMOs should establish a framework to focus efforts internally and with agencies, improve briefing processes, renegotiate media commitments if needed, and ensure agency incentives are aligned with business goals.

1. Marketing & Media Governance 2012
Marketing budget:
Have you sense-checked yours?
CMOs can’t win – but can they do something about ROI?
Morten Pedersen, GLUE2020, offers advice on how advertisers can anticipate the doom and gloom of
2013, and what actions can be taken to ensure a successful marketing outcome.
With almost 2 decades in marketing and The CMO has lost control external, because they will have to learn
media, covering 400 brands and over In addition to the market-driven to listen more to what consumers say
$25Bn global media spend evaluated, I challenge, Marketing (and everything about their brands and their marketing
believe that creating marketing success that sits hereunder) is now under even activity, and then apply this learning
has never been as difficult as it is today. more scrutiny than they have ever been. when briefing agency partners.
No matter how long we look, we will CMOs of today need to prove that they
never find a magic wand, a shortcut, or a can be accountable and “deliver the Need for bigger picture thinking
golden rule that, with certainty, dictates goods”, and they need to do so irrespective When agencies pitch, I keep getting
how consumers react to advertisers of having lost control over how consumers surprised about how quickly agencies
marketing and media efforts. respond to their activities. want to get stuck into the creative part;
Many CMOs scream “it’s not fair”, and the part where they show how a
Will 2013 be any different? they are probably right on some accounts. particular strategy or concept will be
In one word: yes (but not in a good sense). But you can’t really blame CEOs for implemented using specific sports
Moving into 2013, we predict that asking questions, considering that the sponsorship, digital campaigns, or
Marketing professionals (and CMOs in general perception is that Marketing bespoke content creation.
particular) will come under more strain “wastes” half of their budget.
than ever before. A few key contributing
factors, predominantly macro-economic
say marketers keep say marketers focus believe that when
justify this line of thought, including: talking about brand, too much on the latest marketers are asked to
1. No major regional or global sporting brand values, brand trends such as social increase their
event to support ad market in 2013, equity and other media, because they marketing ROI, they
hence no giant budget increase in similar parameters, believe they represent tend to understand it
73% of CEOs
77% of CEOs
74% of CEOs
and not what really the new marketing as cost-cutting through
sight matters, namely frontiers – but can better economies of
2. The extended Euro zone crisis revenue, sales, EBIT rarely demonstrate scale or negotiations
leaves companies more cautious, or even market how these trends will with their third-party
resulting in cash going into valuation. help them generate partners and agencies,
more business for the instead of top-line
company balance sheets and not company. growth generation:
into consumer facing spending more revenue, sales,
3. Irrespective of the outcome of the prospects, and buyers.
forthcoming US presidential
elections, 2013 tax policies will Source: Fournaise
impact consumer spending
Look inwards and outwards For sure, it’s colorful and emotional to talk
negatively, hence wild marketing
Nonetheless, despite so much doom and about the trend of the day, certainly more
and communications spending
gloom lurking over the CMOs’ heads, they fun than analysis and insight for many.
plans will be killed before they see
will still have to find ways to respond But it’s symptomatic to see how much
the light
resolutely, and go out with a smile and time and effort is spent getting short-term
generate that sought-after incremental “smaller” things right, all at the expense
In summary, where markets have shown
value for their companies and brands. of the bigger picture, e.g. nailing that 3-
minor growth in ad spending in 2012 (vs.
To achieve this, they will have to instigate year strategic plan (for more on pitch
2011), we are not expecting this to
both internal and external change. management, read our article on the
continue. For marketers, 2013 may even
Internal because they will have to GLUE2020 website).
be a year to forget before it has begun.
streamline marketing operations even
further, make budgets work harder, and
justify plans for every dollar spent. And
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2. Marketing & Media Governance 2012
Regaining control means new rules Separately, agency remuneration should 7. Media commitments
Whilst each marketer and brand owner justify the resource allocated (and vice If the CMO hasn’t already quantified the
has very different challenges ahead, our versa), and an incentive should be in place financial impact of short, medium or long-
experience tells us that all major change to ensure collaboration and integration term commitment for 2013 media buying,
will have to be driven from the CMO’s across disciplines (research says that a doing so now may be one of the smartest
office. staggering 2/3 marketers experience poor business decisions he/she will make.
Sometimes change in specific areas will integration across agencies – source: Horn Even if media buying is predominantly
happen on an ad-hoc or fluid basis. Group). made on annual calendar year, agencies
However, streamlining and structuring In short, it is the CMO’s job to ensure that will allow for renegotiations in case
efforts within a pre-agreed framework the agency eco-system employed is geared demand is slower than anticipated (which
unsurprisingly helps focus minds and financially to deliver the best possible is the case for 2013).
hard work, whilst maintaining a marketing ROI (from revenue growth to In addition, it’s worth assessing if any
functional relationship with both internal bottom line savings). non-used value from 2012 deals can be
and external parties. transferred to 2013 activity, or if this is
Experience tells us that the following 4. Improve the briefing process lost forever (e.g. lower-than-anticipated
cover the most important areas, and at Everyone knows that agency briefs should inflation, non-used free space, credits,
the same time helps built a framework for be done in writing using a comprehensive etc.).
managing marketing budgets. and bespoke template. Briefs should be
done on time, they should include tangible 8. Are you getting what you pay for?
1. Sync with your colleagues targets, be task-led (not budget led, hence When assessing the financial impact of
If the CMO hasn’t already reaped the only give an indication on budget short or long term media commitments,
benefits of independent social media available), and they should be shared the CMO also need to seek reassurance
monitoring tools and analysis, it is high amongst all agencies to ensure everyone from agencies that the company will
time to catch up. There are many benefits, has the opportunity to provide input. receive the full value of the paid-for media
but above all, live input from consumers Unfortunately, only the budget part space.
(and those of competitors) helps identify seems to happen consistently (and Transparency is a massive area of
and discover unmet customer needs or dictatorially), hence agencies are obliged concern, not least because it potentially
segments. Furthermore, digital listening to do a lot of guesswork when preparing skews any strategic recommendations
can help re-design how brands interact recommendations. and plans that brands receive from
and engage with consumers, and it can So if briefs and agency recommendations agencies (due to some media demand
helps inform brand performance metrics – and plans look like last year’s, it’s higher kickbacks).
ultimately all things that help the CMO probably about time for a review of the Secondly, reassurance on transparent
make smarter decisions on marketing process, starting with an agency meeting production costs needs to be sought,
budget allocation (and helps putting where the biggest issues are ironed out, including clarification on how production
marketing money where the mouth is). and a better process identified. houses are selected, what mark-ups and
Done properly, the CMO will also have margins they operate on, and what
the perfect answer next time the CEO 5. What if scenarios payment terms they benefit from.
asks about why any money at all is spent For any advertiser, preparing for budget
on social media fads. cuts should be as normal as asking kids to 9. Data management
do their school homework (both have a Data has unquestionably become the
2. Use your digital ears high level of predictability). Furthermore,single biggest contributor to campaign
If the CMO haven’t already reaped the if it is the desire of the CMO to ring fence
effectiveness and consumer insight. But
benefits of independent social media marketing budgets, he/she would need to this is still a new area, and clients often
monitoring tools and analysis, it is high know the impact an eventual 10%, 30%, pay for data which a) has little value to
time to catch up. There are many benefits, 50% budget cut will have on individual the specific brand in question, b) has been
but above all, live input from consumers brands’ exposure, buying efficiency and skewed to reflect a better-than-reality
(and those of competitors) helps identify ROI. A highly useful bi-product of going picture, or c) has been manipulated to
and discover unmet customer needs or through this effort is that it helps the serve the agency’s books more than the
segments. Furthermore, digital listening CMO prioritize and cut the fat out of any client’s strategic goals.
can help re-design how brands interact existing plan. Moving ahead of the pack means
and engage with consumers, and it can investing time and money in a strategy
helps inform brand performance metrics – 6. Innovation framework that covers data purchase, access,
ultimately all things that help the CMO To stand out, agencies need to be briefed analysis, management, and ownership.
make smarter decisions on marketing to deliver on creativity and innovation – In many cases, we recommend that client
budget allocation (and helps putting but this rarely happens systematically. So contracts stipulate that all data used
marketing money where the mouth is). to properly embrace innovation coming during the agency’s tenure should be
Done properly, the CMO will also have from agencies (as opposed to being an shared in raw format with the client (as
the perfect answer next time the CEO annoyance), the CMO needs to set out the he/she ultimately pays for it).
asks about why any money at all is spend rules of engagement with each agency.
on social media fads. This means having a clear framework 10. Performance reviews
establishing under how and when The last valuable action is to prepare for
3. All aboard agencies can submit ideas, what measurement. A CMO needs to know
The risk associated with internal fighting, supporting information is needed (i.e. the how hard marketing and media money
politics, and poor decision-making is business case), how ideas are selected, has worked, and they need to know if it is
accentuated considerably more if and at what stage will selected ideas be competitive.
everyone is not singing from the same developed and commercialized. Performance reviews should be done
hymn sheet. If agencies are briefed piece Agencies also need to be prepared for against both internal KPIs and external
meal, the CMO cannot expect them to ideas coming from within the client’s benchmarks, enabling the CMO to
work together, let alone deliver the organization, so the framework would understand if his/her agency is delivering
business outcome he/she is looking for. need to address the issue of co-creation, to the best of their ability.
co-development and co-ownership.
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3. Marketing & Media Governance 2012
The CMO may also want to consider
looking in more detail at areas where the
largest share of spend is allocated (often
media), to gain an independent view and
recommendation on where to look for
even further value.
Concluding thoughts
Spending some time on establishing the
most appropriate framework for
marketing and media budget allocation
has never been as important as it is today.
The fragmentation of customer segments
and media channels available means that
getting it right has become unbelievably
difficult, compared to even 5-10 years ago.
The devil is still found in the detail, but it
is now more important than ever to know
where to look for the opportunities that
can stretch marketing budgets even
further.
About GLUE2020
GLUE2020 is a leading-edge consultancy
that enables corporations and brand
owners create, quantify and capture value
from marketing and media investments.
Entrepreneurial, we defy the old
consulting guard by offering innovative
services that design enterprises and
agency relationships of the future. We
help Fortune-500 companies exploit the
ever-changing consumer landscape, the
latest technological developments, and
pioneering agency remuneration models.
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