A CMO’s job is getting more complex all the time.
In fact, the management consulting and research company Gartner shows that chief marketing officers are in the thick of some weighty trends impacting the discipline. These changes, however, do give them more control over the direction of their banks and credit unions.
In its latest “Future of Marketing Organizations” study, the firm identifies three broad trends shaping financial service marketing in the U.S.: centralization, shifting responsibilities and team expansion. All three demand a different approach to marketing leadership.
In effect, today's banking Chief Marketing Officer is becoming a 'pseudo-COO'.
The study, part of Gartner’s ongoing CMO surveys, explores these broad shifts in marketing leadership. Sally Witzky, senior director and analyst at Gartner, explained to The Financial Brand what CMOs must know about these trends today — and what they need to do to adjust for their impact going forward.
CMOs Are Centralizing Marketing Operations — Fast
Banks and credit union CMOs have been shifting toward a unified marketing function for a while, but the pandemic sped up the process. Gartner’s report found that by now, 60% of marketing organizations have centralized some or all functions into physical headquarters, centers of excellence or single marketing teams. Some banks and credit union CMOs now have centrally-managed in-house creative agencies and content studios. Huntington Bank is one example among larger institutions.
As a result, Witzky says, fully decentralized structures are nearly nonexistent and financial service marketing has become more aligned to business goals, markets, and opportunities to capture economies of scale. “Much of marketing’s activity — strategy through execution, including budgets — had been managed at individual brands, business units, lines of business or local/regional markets,” says Witzky. “The concept was to have marketing be closer to the business and to embed control, budgets and accountability to the business units or local markets.”
The move to centralization is meant to increase the quality and consistency of the work — including brand value, intellectual property and brand reputation — while reducing duplication and optimizing the use of marketing technology. Many CMOs are combining market research, insights, business intelligence and customer/consumer insights under one umbrella as well.
By unifying marketing under a single 'owner' accountable for media, performance metrics and tech management, banks and credit unions hope to cut costs significantly.
Centralization can save time and energy, too. By putting more of the work under their control, CMOs can assert order over an often unruly roster of freelancers, agencies, and external consultants, can de-silo teams, and make themselves the single point of contact. And unified ownership puts standards, best practices, regulatory and risk governance, and training/upskilling programs in one binder, so to speak. That helps CMOs drive culture shifts, like those needed for digital banking transformation, and make faster decisions.
But as the report warns, no marketing structure or operating model is perfect and centralization can make it difficult to implement insights on consumers and local markets. “Cost cutting or other key business decisions made too far away from local markets or customers and without collaboration,” says Witzky, “might put customer relationships at risk, or reduce customer/client retention.”
Centralization can make it difficult to implement insights relating to consumers and local markets.
It doesn’t help that marketing teams don’t always understand the complexity of the business model they support, nor that centralization can muddy roles and responsibilities. Digitalization complicates things.
“Digital commerce marketing requires different talent than retail banking,” Witzky observes. “More traditional marketing and communications teams can’t easily evolve into digital experience teams where digital customer journey orchestration is paramount to the overall experience.” In which case, banks and credit unions may need “a complete remix of [their] entire resource ecosystem,” she says, or risk creating marketing that delivers little customer value.
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CMOs Gain Some Responsibilities and Lose Others
Though CMO-ownership of operations, strategy and marketing-led innovation is on an upswing — often by double digits over the last 12 months — CMOs are relinquishing resource management, creative development, content tagging, and martech management.
In fact, Gartner finds a trend toward sharing martech management with IT, while in-house creative agencies deliver work for sales, product, communications or other departments. Content teams in comms departments often do content tagging, but so might data and analytics or digital commerce teams.
The drawback is that CMOs will soon have to “identify the responsibilities that marketing can afford to cede, and those they must fight to maintain to ensure that marketing plays an active role in future-forward enterprise value creation,” warns Gartner.
CMO ownership of operations, strategy and marketing-led innovation is on an upswing.
That may explain why so many CMOs say they’re keeping hold of resource allocation and capacity planning, “at least to build the project or work management platforms, or operational martech for individual teams’ use,” says Witzky. The survey also finds that in big banks and credit unions, project managers, in-house creatives, marketing data and analytics, or digital commerce teams often manage resources and capacity for their teams.
Resource allocation means responsibility for financials, performance, resources, martech and the adaptive strategic planning process. Most CMOs are investing in a marketing operations competency, says Witzky — often a center of excellence to drive consistency across marketing, to help run the often-complex business of marketing. And because CMOs have to prove the value of marketing to the business, they increasingly find that performance and productivity data proving marketing’s value is crucial.
Fortunately, 72% of the CMOs surveyed reported that they have more influence than their peers regarding business strategy, digital transformation, business growth and innovation. Still, Gartner recommends that CMOs expand their sphere of influence to include the CEO, CFO, CIO or CDO, “so that marketing doesn’t have to work so hard to prove its value to the business.”
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Marketing Teams Are Growing, But Talent Is Hard to Find
The study shows that six in ten CMOs grew their function over the last 12 months — by 6.3 direct reports on average. This despite a 10% attrition rate and a scarcity of crucial abilities, including martech, digital commerce, digital platforms and media skills, creative talent, and industry knowledge.
Yet CMOs say the skills necessary for organizational and cultural change are in even shorter supply. “The most difficult skills to develop within their marketing teams,” says Witzky, “included strategic thinking, collaboration and leadership, technical ability, workflow management, and messaging.”
To keep and attract talent, the CMOs in the survey reported offering their teams flexible location, hours, and days, desk mobility at the office, and the freedom to choose projects and regulate the amount of work they do. It’s an untraditional approach to management in banking, but almost a quarter of surveyed CMOs lost between 21% and 30% of their team in the last 12 months.
The most difficult skills to develop within marketing teams include strategic thinking, collaboration and leadership, technical ability, workflow management and messaging.
As bank marketing centralizes and gains responsibility for strategy, fintech, and finances, retaining and attracting quality employees is an operational necessity. Management has to evolve. Indeed, according to Gartner, “Alarm bells should be going off if you didn’t make any organizational changes within the last year, or if the ones you made didn’t address operational efficiency challenges.”
Ultimately, CMOs must evolve to sustain influence in the marketplace, over their teams, and in their organizations. Granted, everyone in banking has to evolve in an increasingly competitive industry. But CMOs, says Witzky, “must be the torchbearer for change and adaptability.”