A complete guide to being a CMO or Head of Marketing

To understand the parameters a Head of Marketing or Chief Marketing Officer (CMO) operates within, we must first understand marketing’s role in the business. 

Marketing is a discipline that involves taking a business to market and then managing the way the business represents itself within a market. This process can be performed without a marketing function, and consequently marketing is not always considered to be a core business function (see our complete guide to how marketing works).

This commonly explains the difference between a Head of Marketing and a CMO. A CMO sits within the C-Suite at the top of the business, whereas a Head of Marketing will perform a similar role but not as part of a core leadership team. Either way, marketing departments have become increasingly embedded as the discipline grows in complexity. More specifically, marketing now requires the development of creative assets and approaches that require specialist skill-sets.

It is the CMO or Head of Marketing’s role to take charge of marketing’s function. In doing so, they must lead the marketing team, be the point person for marketing across the business, and manage all external marketing service providers. It is a complex role that requires a complex blend of skills. A CMO will usually have a depth of experience, exceptional people skills and a strong academic background. That said, the relative balance of each of these elements will vary greatly depending on the nature of the business.

These responsibilities also make their role very different from a Head of Growth, which has grown in popularity within startups. This is because a Head of Growth will have very different conditions in which to operate. Being newly formed, the startup won’t have the well-defined structures common to the CMO role. They will need to rapidly scale a team in preparation for fast growth, while having limited budgets and limited past success from which to make these decisions. For these reasons, a CMO may not always be suited to the Head of Growth (see our Head of Growth guide).

The responsibilities of every Chief Marketing Officer or Head of Marketing

Irrespective of an organisation’s size or industry, a CMO or Head of Marketing will be required to perform the following activities.

• Liaise with departments across the business to gain and subsequently allocate marketing budgets.

• Develop and oversee the marketing strategy and all marketing activities for the business.

• Ensure the maximum effectiveness and return on investment of all marketing activities.

• Design, build, manage and motivate a marketing team.

• Research and select the most appropriate tools and services to equip the marketing team.

• Select and manage the appointment of outside service providers if and when required.

• Evaluate and report on the effectiveness of all marketing activities (both internal and external).

These objectives, as explained earlier, are fundamental to the successful operation of a marketing team within an organisation and the success of all its marketing activities. With this in mind, it is possible to present ten questions that every CMO will have to juggle at all times.

10 questions every Head of Marketing/ Chief Marketing Officer has to consider

1. How do I understand and capitalise on the changes in the market?

Understanding what is happening at an industry level is a fundamental element of a CMO’s role. They must keep on top of any market developments that could potentially affect their marketing strategies. In doing so, they must keep on top of industry news, competitor announcements, new technologies and societal issues. This is a major challenge for all marketing heads, as there is usually no time allocated to it within their busy schedules. Even if they designate team members to conduct market research, they will still need to keep a personal eye on what’s happening.

2. What budgets do I need to be effective? 

Marketers must fight for marketing budget, and in doing so, must make a business case for why particular marketing budgets are required. As we’ve researched previously (analysis of 50 global budgets), this process happens very differently depending on the nature of the business. In some cases, and particularly traditional industries, marketing budgets are sometimes allocated based on a proportion of revenue, whereas in disruptors, marketing can be one of the greatest expenses.

The relative marketing budget typically dictates how that business, and by extension, the industry views marketing. In traditional businesses where marketing budgets are set as a proportion of revenue, more often than not, the marketing function is viewed as playing a supporting role compared to disruptors who frequently deem it to be pivotal. These differences impact the culture of the marketing department, the aspirations of the people within it, and their ability or desire to be innovative. This is no small point. Fast growing businesses usually disrupt industries by capitalising on the false sense of security exhibited by established players.

3. What marketing channels should we use? 

Every marketing head will be faced with a constant challenge to assess all the available marketing channels before deciding on those most suitable. This process varies significantly depending on the nature of the business and the marketer’s expertise.

Every industry will have a set of commonly used channels, as shown in our industry research. But this doesn’t mean that it is correct or that it can’t be changed. Many disruptors and the marketers at their helm gain success because they realise new opportunities, while traditional players rest on their laurels. It is therefore essential that every marketer, however conservative, stay on top of what’s happening in the market.

4. What marketing budgets should we allocate to each? 

Once a marketer has decided on which channels to use, they need to understand how to allocate their budgets for each. They make this decision on the basis of their perceived return on investment and also the channel’s role. Yet, both are extremely difficult to assess because of the relationship between them.

Each channel has a distinct benefit which goes beyond simply generating sales. To explain this in greater detail, we’ve identified eight growth areas, which can be used to conceptualise at least 32 marketing channels. The marketing funnel is often used to simplify a channel’s function e.g. awareness, consideration, conversion and loyalty, but the reality is much more complex.

And this leads us on to establishing return on investment (ROI). An increase in data collection measures, and more accurate behavioural data, has led to more opportunities for CMOs to evaluate ROI. This has created two challenges. The first is an over-reliance on channels that can be measured. The second is an over-reliance on data that provides only a glimpse of what is really happening. No data set is able to explain all the seven elements that lead to a buying decision.

5. What size should the marketing team be? 

Once a CMO has decided how to allocate marketing resources and selected the appropriate marketing channels, the consequential next step is to consider how to allocate the work across a marketing team. To do this, the CMO will have to consider how many people they will need and the expertise they will need to have.

This is much easier said than done. This is because a CMO usually inherits an existing team that may not be appropriate for the current requirements. The CMO must therefore evolve their specialisms, careers, and their lives. In many instances, it can be extremely difficult to ask people to adapt to new working practices. At the same time, finding and hiring new people with the desired expertise can be extremely difficult and time-consuming.

6. How do we ensure that the marketing team is always up-to-speed? 

Marketing has only been around for the last one hundred years or so, yet it has changed more in the last ten than it did in the previous ninety. The digital world has made it increasingly complex, with more data being produced and more marketing tools being developed.

Experience is only one element of being a great CMO. Marketers must also continually learn about new technologies that they haven’t yet used. This is a major task for every CMO to overcome, as there aren’t usually KPIs set against it. There may be KPIs for team development and training, but these are often difficult to quantify. It is also near impossible to measure the amount of business lost because of a suboptimal team.

7. How do we ensure that we are using the most appropriate tools and services?

CMOs have their work cut out. There are endless priorities that have KPIs set against them, which consume every moment of every day. Yet, at the same time, there are important questions that sneak up if they don’t pay particular attention to them. Understanding marketing technology is just one example. The Marketing Tech industry has grown rapidly in recent years, and this has caught many CMOs cold.

Selecting the right tools and services is no easy task. A CMO must weigh up a complex set of judgements before deciding whether to use a particular software. For illustrative purposes, they may have to consider whether the tool is the best in its category, whether it provides value for money and whether it fits with their team’s expertise. Often, they will usually ask their team members to regularly audit the landscape on their own terms, a process that is highly inefficient. There are much easier ways, as we show when we consider four metrics using our algorithmic database.

8. How do we ensure that we have the right balance of in-house and outsourced support?

Once marketing budgets are allocated and channels selected, a CMO will have to decide on the balance between completing the activities in-house or by outsourcing them. It is rare for an in-house marketing team to complete all the activities. This is because it would be highly inefficient to do so. Many activities are campaign-led, which would lead to many individuals being underused for much of the time. A specialist creative or digital designer may only be required once a year for a particular campaign.

This dilemma is shared by every CMO, irrespective of the industry in which they operate or the size of their team. We’ve shown this to be the case repeatedly in our industry research, where we compare the activities of major players and major disruptors. Consequently, CMOs must think carefully about the activities they want absolute control over and those that require fresh ideas and specialist skills.

9. How do we hire outside agencies, consultants and service providers that deliver great work and fit in with our culture?

As we’ve seen, a CMO will often look outside the business for fresh ideas or specialist skills. In doing so, there are seven metrics that they can use to consider suitability. These ensure the agencies fit with their culture, and perhaps more importantly, works seamlessly together. This later challenge may sound trivial, but in reality, it is anything but.

The majority of agencies want to be involved in a business’ marketing strategy to some degree. After all, this is usually the most exciting part of working with an agency. Yet, if they do, this will invariably have a knock-on effect on the strategies pursued by all the other agencies hired by the business. This readily leads to conflict, with agencies fighting to get their ideas heard. As a result, the CMO may find themselves managing agency relationships more than developing marketing activities.

10. How do I measure and evaluate our marketing activities with precision? 

One of the greatest challenges for any CMO is evaluating the return on investment of their marketing activities. This is because marketing by design can’t be measured: marketing’s role is to influence the buyer on an emotional level, and not just to sell. This has led to much confusion in recent years. The digital world has facilitated the development of many tools that measure action and subsequently sales, yet not influence. This is an important consideration because it can lead to marketers overvaluing channels where action can be measured.

Furthermore, by measuring metrics based on placement costs, it is very easy for a CMO to discount the total costs associated with a campaign. In reality, the CMO must also consider the administration, design, production, and evaluation costs of each channel. This makes evaluating the true return on investment of each channel exceptionally difficult. This has led to extreme variances in the budgets that businesses allocate to marketing (see research on global marketing budgets).

How to turn the role of a CMO or Head of Marketing into three key objectives

As we’ve shown, the CMO or Head of Marketing has an incredibly important role to play to the business. This is highlighted in the sheer breadth of the role and the responsibilities within it. To make the process easier to understand, these responsibilities can be categorised into three areas based on marketing’s role within the business.

• Market analysis: A CMO must stay on top of changes in the market. This is because marketing’s role is to manage the business’ influence within the market. Any market trends will by extension affect a business’ influence.

• How to capitalise: A CMO will have to develop a marketing plan to fit the current market trends. In doing so, they will need to consider the budgets required and the most suitable channels.

• What to use: A CMO will need to decide how to complete the activities. This requires building a marketing team equipped with the most suitable tools and services. In addition, they will need to decide on the activities that require outside expertise and select the most suitable agencies.

Any CMO that continually keeps on top of these three areas, and finds the blend between them, will be able to successfully navigate constant market change. Our role at Posito is to help them implement the most effective growth strategy. If you would like to know more, then you might be interested in reading about a CMOs greatest challenge.

Any questions?