Chief Marketing Officers (CMOs) and their organisations have been wrestling with a confluence of challenges, from digital disruption to changing consumer behaviours and expectations. Now, they must respond to a mounting cost-of-living crisis and a looming recession.
Marketing is essential for business success in all economic conditions. But the need to target customers responsibly and react to the particular challenges they face now is critical. Doing so calls for a balance of human qualities, such as creativity and empathy, and technological capabilities that will enable organisations to improve and expand upon the experiences and services they provide in a way that shows a real understanding of their customers’ circumstances and needs.
Combined, this ‘art’ and ‘science’ of marketing, can elevate the role and importance of the function and create greater sustained value for organisations.
Yet exclusive PwC research reveals many CMOs currently lack the capabilities they need and the necessary backing of their organisation.
Creating a marketing renaissance requires investment in both skills and technology. But only the right balance of human innovation and technology will deliver the results organisations need.
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As organisations seek to create stronger relationships with customers, the role of technology and data has become increasingly important. But so are human skills and qualities, such as creativity, empathy and strategic thinking.
Data may help organisations measure and analyse their customers, but it requires a human touch to truly understand customers, from showing empathy to inspiring through creativity.
For example, data may help organisations see what’s selling and when best to sell it, but in a challenging economy, when customers are worried about the cost of living, human judgement is required to determine the most responsible way to use that information, balancing out a data-driven pursuit of sales with an approach that shows greater care for the customer. That may include focusing not only on transactions, but on sharing information and advice, or tailoring products to help customers make better-informed decisions about their buying behaviours.
“The past two years have been tough and more challenges lie ahead. At such times, CMOs can be tasked with focusing on near-term sales. But with the right support from the business, and the right investments in people and technology, CMOs can become architects of customer-led transformation and long-term responsible growth.”
Tom Adams,
Experience Consulting Leader, PwC UK
of CMOs say their board still view marketing as a cost centre
of CMOs have prioritised short-term performance marketing in the last 12-18 months
of CMOs aren’t satisfied with the way their organisations perceive marketing1
However, our research reveals many CMOs feel they lack many of the tech and human capabilities they require.
In part, this is due to many CMOs finding themselves in a frustrating ‘catch-22’. They need investment in capabilities and technology. But without that investment, it’s difficult to demonstrate the strategic value they can add. For more than half of the CMOs surveyed, this situation is compounded by a lack of marketing representation at board level.
“The 1960s, 70s and 80s saw a golden age of advertising, and marketing was primarily seen as a creative industry. Since then, science and data analytics have driven marketing towards performance and transactions. But organisations must not oversteer towards technology at the expense of the incredible value people bring. Faced with the art and the science of marketing, CMOs must choose the customer and the balance that’s right for them.”
Tom Adams,
Experience Consulting Leader, PwC UK
We asked CMOs to pinpoint where they are today on a matrix that plots the maturity of human capabilities within their function and their adoption of marketing technologies.
The most populous quadrant of the matrix was the bottom left, characterised by lower influence of human capabilities on areas such as creativity and strategy, and less advanced in terms of technology adoption and sophistication.
However, asked where they aspire to be, most identify the top right corner, where human and technological impact is greatest. Encouragingly, two-thirds expect to be there within three to five years, provided they can chart the right path.
That ambition is sound. Further analysis of organisations already in the top right quadrant reveals they all reported year-on-year improvement in customer experience, greater collaboration across their organisation and higher levels of satisfaction regarding how marketing is perceived. Furthermore, nine out of 10 achieved a better performance against ESG objectives. The survey also indicates those organisations in the top right quadrant are twice as likely to have performed 'much better' in terms of revenue growth, and three times more likely to have seen better brand performance year-on-year.
Organisations cannot oversteer towards technology right away and hope to find a shortcut to marketing success that circumvents the need for people to apply human qualities such as creativity, ingenuity and strategic thinking.
They must ensure they have the ability to assess, understand and apply the benefits of technology, while using insights responsibly, and with clear judgement.
For all the clamour for marketing automation, investing in marketing technology without first investing in the function’s ability to plan, deliver and assess a sophisticated marketing strategy and compelling, creative campaigns will achieve little more than doing bad marketing more quickly, at greater scale and potentially with damaging unintended consequences.
CMOs have a vital role in helping their organisation find the right combination of human and tech capabilities. That combination will be uniquely influenced by their starting point, but there are some universal considerations: starting with the customer.
“The board needs to accept that machines don't just do this alone. We need people in marketing to make the machines do what they do. The foundation has to be humans, and set the bar with technologies. Understand and target customers in a better way, with lots more insight from tech. Otherwise, it’s not efficiencies you’re making, it’s inefficiencies with lots of wasted and untapped data.”
UK CMO
(interviewed for this research)
Given the right remit and resources, marketing has a clear ability to not only sell products and services to existing customers, but also attract new customers and effect wider organisational change by bringing in powerful insights around what customers want from the organisations they engage with.
In turn, such customer-led transformations can even help establish an organisation as a more attractive employer, or a more investable business, when its motivations are seen as being about more than growth at all costs.
But achieving this demands that marketing be the primary custodian of customer data, and the end-to-end customer experience.
However, many CMOs surveyed cite multiple data owners across their organisation, raising the likelihood of conflicting data sets and a fragmented view of the customer that hinders great customer experience and lessens the impact of insights feeding back into the business.
Data and a single view of the customer is critical to success. It allows organisations to target customer segments more responsibly and more effectively and it enables them to find efficiencies which can translate into benefits across performance, customer experience and pricing.
“Attempts to roll out effective marketing automation and improved personalisation will fail if organisations work from an incomplete view of their customers. This requires a combination of human skills and understanding, around the role, value and governance of data, and technology to manipulate that data for effective use.”
Rhian Woods,
Partner, Strategy& UK
have a strategy in place for data ownership, governance and usage, but data is owned across multiple functions.
agree data-driven marketing automation is well established but 55% agree they are collecting more data than they can usefully interpret
but 55% agree they are collecting more data that they can usefully interpret1
CMOs are expressing a marginally higher intent to invest in tools and technology (83%) than talent (75%). As outlined, these investments must work in tandem, ensuring organisations maintain the skills and judgement needed to get the most from technology.
The interconnectedness of these factors can be seen around the topic of automation. Currently, CMOs cite a lack of advanced automation skills within their team. But resolving that situation in order to get the most from the technology, may hold the key to increased creativity.
This also addresses another issue surrounding automation, and the need for technology and people strategies to be compatible. While automation should free people from unnecessary and time-consuming manual processes, it should not instantly equate to a reduction in headcount. Instead, it should liberate current and future marketers to contribute more to the areas where they add the greatest value.
But finding that future talent cannot be taken for granted. Our research revealed 62% of CMOs believe there is a shortage of next-generation marketing talent, across operations, data and technology. That means working with HR and employer brand teams to explore every advantage achievable in recruiting and retaining talent, as well as looking at third party relationships, such as agencies and consultancies to bolster capabilities.
“CMOs risk getting painted into a corner when it comes to talent if they do not have exciting, innovative digital projects to show people. They need to act on technology and tech skills, to recruit and retain the people they need. That may mean thinking creatively and even looking to external technology capabilities and partnerships to become a more attractive employer.”
Tom Adams,
Experience Consulting Leader, PwC UK
of respondents say they have advanced levels of marketing automation skills within their team.
of CMOs believe automation in marketing frees up time for increased creativity1
There are few areas in business, or society, where the role of human influence will be more necessary than in ensuring organisations deliver both economic and social benefits.
Data will continue to help organisations see what they could do and where they could achieve growth. But it is more critical than ever that human understanding, empathy and judgement are applied to what organisations do with that information.
Increasingly, human interpretation of customer and market data must shape improvements in everything, from the responsible targeting of customers to the sustainability of ranges and supply chains, via collaborations with social enterprises or the provision of ethically-sourced products or more customer-friendly financing, pricing and payment models.
The CMO’s role as custodian of the customer relationship will be a catalyst for the kinds of changes all responsible businesses should be looking to introduce. Increasingly, these will also be the kinds of changes organisations are measured on and judged against by influential stakeholder groups such as media, investors, government, talent and customers.
“Consumers are facing significant economic uncertainty. And while businesses are feeling the pressure too, they must not cut corners on commitments to customers, society and the environment. A strategic approach that prioritises the right investments is critical. Targeting customers responsibly, showing empathy, and thinking creatively about pricing and servicing, transforming business models and addressing internal communications will be vital.”
Sam Tomlinson,
Media and Entertainment Leader, PwC UK
Our research suggests over three quarters of organisations (78%) put a significant focus on measuring the commercial impact of marketing, while fewer put a similar focus on measuring customer impact (60%) and social and environmental impact (50%). Added to this, only 62% go beyond the current requirements in terms of data privacy and ethics.
Business performance will increasingly be inextricably linked to customer experience and an organisation’s delivery on ESG objectives. Marketing’s role at the intersection of these priorities means it is important the lack of board level representation is addressed and the CMO enjoys a more meaningful dialogue with colleagues such as the CFO and CEO.
“Who sees marketing as a cost centre? The CFO mainly. Marketing is predominantly viewed as the first place to go, to cut budget when there are headwinds. But the importance of investing when there is a headwind is sometimes lost. Marketing… drives revenue… in a profitable way.”
UK CMO
(interviewed for this research)
The C-Suite should be working together to not only set marketing objectives but to ensure those objectives go beyond marketing performance, to reflect the influence the CMO can have on wider business performance.
“CMOs risk getting painted into a corner when it comes to talent if they do not have exciting, innovative digital projects to show people. They need to act on technology and tech skills, to recruit and retain the people they need. That may mean thinking creatively and even looking to external technology capabilities and partnerships to become a more attractive employer.”
Caitroina McCusker,
Customer Led Transformation Leader, PwC UK
Only 35% of senior leadership contribute to setting return on marketing investment (ROMI)
Of CMOs find it ‘difficult’ to convince C-suite of ROMI.
Every CMO in the top right of the matrix has a formalised and consistent approach to measuring ROMI, and they are twice as likely to have had C-suite involvement in designing the framework for measurement1
To transform the marketing function into a strategic driver of growth, CMOs should seize this moment in time, when so much is being disrupted, to demonstrate their value. Creating the necessary harmony between people and technology will successfully balance creativity, ingenuity and strategic thinking with efficiency, productivity and insight.
Those that do will target the right customers more safely, accurately and ethically for less, improve insight, deliver differentiated customer experiences, and broaden their horizons.
But where do you begin?
Use our interactive tool to pinpoint where you sit on the matrix of human-led, tech-powered marketing maturity. Then hear from our experts about the specific considerations and steps you can take to balance the art and science of marketing to create your own marketing renaissance.
[1] Source: PwC CMO Survey, based on CMO interviews, and a survey of a panel of 77 UK CMOs, July 2022.
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