From CIO to CMO, A Data Story

 

“If you came into marketing because you didn’t like numbers, then you don’t have much of a future.”
-Beth Comstock, CMO at GE

Much has been written about the shift in spending from the CIO to the CMO, Gartner has been out front on this by forecasting that by 2017 the office of CMO will spend more on IT than the CIO function. Whether this proves to be true or not masks a more stark reality for professionals in marketing organizations, which is that their jobs are fundamentally changing.

The era of Mad Men in marketing isn’t over but the creative and communication aspects of the marketing function are diminishing in importance. Marketing can no longer exist as a siloed function, isolated from product, engineering and operations, and more significantly there is a substantial skills gap that marketing professionals will need to fill to respond to a complete shift to digital.  Traditional skills are not going away but the emerging reality is that data-centric strategies for engaging radically different customer behaviors and more complex buyer journeys will not be realized without retooling people.

The other reality that marketing teams cannot escape is that they alone cannot anticipate and develop all of the content that will be required to successfully execute on company objectives. More reliant than ever before on earned and sponsored content, marketing teams will need to better instrument and provide social incentives for the creation and re-use of earned media and that goes well beyond what is the norm today for social media engagements. However, the shift to digital also requires organizations to think beyond text.

Video has rapidly emerged as the new whitepaper, and this should not be surprising given that YouTube is the second most used search engine on the web. If you are tempted to raise your hand and say "hey Jeff you just said Mad Men is over!" let me stop you know and point out that video relies on 2 core strengths in addition to the creation skillset, which is the ability to drive distribution and more significantly instrument video for data collection that enables refinement of creation and distribution. Video is data… and then there is Pinterest which has it’s own unique dynamics but is proving itself to be a powerful contributor to digital marketing success.

Whether text, video or images, the common requirement is instrumentation of the content to measure the interaction and the impact. No piece of content exists in isolation, and just like you measure demand generation activities in the context of a funnel where each stage of development passes through, discards or recycles leads, marketers have to measure content through a parallel funnel that captures people according to interests and things they find curious.

The content funnel is more like publishing than sales development because it is all about building a sustainable audience that trusts you as a source of authority. Measuring the impact of content through social channels, time on site, and referral sources is a valuable technique for sourcing new ideas, concepts, and influencers in your market.

I came across a fascinating post that explores the concept of brand newsrooms as a marketing function. This is something my friend Tom Foremski has been writing about for a long time, the notion that brands are just another form of media entity and this post certainly reinforces that.

In the age of social media, overnight viral sensations and the constant flow of information and multimedia experiences, it’s not surprising that brands find the newsroom idea enticing. In order to keep up with the times and current media-consumption behaviors, brands are starting to shift towards higher-metabolism marketing that responds quickly to culture, much like how journalists in newsrooms act quickly in response to important events.

The Changing Role of Marketing Changes Everything

The fact that IT spending is shifting from CIOs to CMOs is interesting but not a full and complete story, and for vendors who will look at this trend and shift their strategies to selling to a different title miss the point and will ultimately fail. Marketing as a function has to become more integrated with other functions because, like customer service, it is on the front end of business processes that will ultimately prove to be game changers for how companies engage their customers, prospects and ultimately establish competitive position in their markets.

Professionals in the marketing function will need to become more data scientist, looking for every conceivable opportunity to instrument content and then use that knowledge to drive audience and participation. Marketing budgets, as a consequence, will become less campaign and project based, more process and systems based as a result. so while we all may be selling to a different title it may not matter all that much.

Early Adopters’ Secrets For Success With New Tech

The CIO’s role within global 2000 companies has changed in recent years from leading big systems projects, like ERP deployments, to business transformation. The objective for a lot of big companies is to use technology innovations to drive business innovations, not just achieve cost and productivity efficiencies.

“Ten years ago, CIOs spent a lot of time getting transactional systems—the giant stuff—in place. But that’s not so much the job anymore,” says Robert Urwiler, CIO of Vail Resorts. “CIOs have more freedom to explore innovative ways to provide business transformation and more freedom to look around at emerging technologies. I feel like I have an obligation to do that.” If Rogers were to revisit the idea of early adoption in IT in 2008, that classical distribution curve might not look so bell-shaped anymore.

[From Early Adopters' Secrets For Success With New Tech]

This article in CIO Magazine, link courtesy of Vinnie Michandani, caught my attention because it features the CIO of Virgin America, the airline that I have been flying a lot lately. Virgin’s in seat entertainment system, they call it “Red”, is an example of technology edge pushing in action and it’s great if for no other reason than it gives you a lot of control in what is an otherwise captive environment.

First and foremost, the entire system is built on Linux, which in itself is pretty cool but is also representative of a larger commitment to open source technologies by CIO Maguire. The focus on Linux is also representative of how technology is being used to drive business innovation at Virgin.

The entertainment system also has a food ordering system, which can be used to order everything from free drinks to box meals at $9 each. My personal experience suggests that the ability to select from a menu of food options instead of one or maybe two box options results in me spending more money per flight on food, probably on average $12 for a long flight.

The streaming video options are extensive and priced below the psychological threshold where you feel like you are getting ripped off. Throw in a movie and you are up another $6 or $8. There is a tab for online shopping that has yet to be activated, and I can imagine that being a popular service that results in additional affiliate revenue.

Essentially what Virgin America is doing is using technology to not only deliver a better in flight experience but also drive additional revenue per seat that is independent of arbitrary fees being tacked on by the airline. There are 140 seats, assuming a relatively constant load factor of 80% you end up with 112 butts in seats and if they can generate on average $8 per seat the revenue uplift is $900, roughly equivalent to 2 SFO-NYC round trip tickets.

There are 100 flights a day, assuming the short flights are less likely to produce additional seat revenue, let’s average that down to $300 per flight. Making some rough guesses about the flight schedule, let’s say that it’s 60/40 short to long haul which results in a combined additional revenue of $54k per day across their entire schedule. That’s an additional $20 million of revenue (no idea what the margins would be) per year that was enabled by a better piece of technology stuffed in the back of an airplane seat. Not bad.