CMOs are concerned about a potential recession and this fear is shifting their marketing practices from long term brand building to more demand-driven marketing tactics, according to a new study of CMOs from Chief Outsiders.
Eighty-four percent of the 80 CMOs surveyed for the report said that the economic and business climate over the next year will negatively impact business goals, with inflation, talent issues and supply chain challenges dampening performance expectations.
“While the slowing economy is broad, not all sectors will be in negative growth at the same time, and overall, it’s relatively mild,” said Pete Hayes, CMO of Chief Outsiders. “CMOs also know so much is still TBD in actions that may yet to be taken by the Fed. Our experience with companies that are seeking new ways to grow, is that they are not waiting for things to settle. For most of the next two years we are still in a growth economy, just one that is slowing, where some sectors go negative. The challenge is to find out how to out maneuver competitors in that environment. Clients are sensitive to the economic challenges and are investing more cautiously.”
To help combat these challenges, most of the CMOs surveyed said they are focusing on market research, strategy development, and digital marketing to help drive growth. Most CMOs surveyed said they are focused on a growth agenda in 2023.
The report also found that the CMO role is shifting with 74% of CMOs reporting changes to their roles. They are now expected to play a larger role in growth and sales than on long term planning. Most CMOs attribute this shift to changing customer behavior and increased competition. Some 75% said that CEOs now view CMOs as drivers of growth, a perspective that is expected to stick around. Additionally, 73% of CMOs think they are viewed more positively by CEOs than in years past.
“It certainly varies by industry, and their sophistication in their approaches to marketing, but overall, CMOs – again, largely because of digital opportunities, the complexity of associated analytics, and the variety of elements that now roll up into the marketing function – can’t know it all. They must know enough to broadly build their organizations, or tap the right outside resources, and be effective as quarterbacks and business leaders,” said Hayes. “The requirement for even more accountability to the rest of the executive team, and their boards, clearly communicating strategy, progress, and redirection as their initiatives evolve, is greater than ever. Overall, we are seeing CMOs playing a much stronger role in company strategy.”
AI and machine learning will be key tools in 2023, as brands seek to improve targeting and modeling customer behavior, according to the report. CMOs will also be focused on creating best-in-class customer experiences this year, as a way to distinguish themselves from the competition. “Various instances of AI have been maturing for decades but now, we are seeing output from AI engines that’ve gone beyond data,” said Hayes. “Big Data is now Big Insights or even conclusions. One big danger is trusting it. The bigger danger is not exploring it. Like search engines have provided pointers to information sources, AI engines actually offer an opinion. The first point of true business impact (already being seen) is in customer support. But more broadly, people from CEOs to product managers are getting crisply written summaries of their inquiries. We expect an explosion of experimentation. Beyond verbal AI, analytical AI continues to increment in important areas for marketing such as campaign impact and attribution.”
Video will also be a priority this year and CMOs will prioritize development of video content for social channels this year, per the study.
