Wednesday, October 1, 2008

2009 Guidance for CMOs. . .

When budgets are on the cutting board, the marketing function often has to shoulder more than its fair share of the pain. The cuts of 2008 and 2009 will be no exception. In IDC's most recent budget survey, closed in September 2008, actual 2008 spend increase will be just 3.5%, a reduction from the 4% predicted earlier this year. In addition to the short term budget cuts, the pressures of the current downturn will usher in a period of more sweeping marketing organization change. In my five years as a CMO Advisory analyst at IDC, I have never observed so much management analysis regarding potential marketing-organization change. Here are some things to think about to help you to survive and thrive in 2009:

  • Transformation Starts at the Top. Many tech marketing organizations have far too many silos and lack alignment. For these companies, there is too much independent resource and spending at corporate and, in some cases, in the business units; and not enough spending in the field, closer to the prospects and customers. This also contributes to the dis-connects between the sales and marketing functions – as the sales department often perceives that marketing's actions are far removed from their efforts. IDC suggests further examination of the marketing organization's structure to improve alignment between corporate marketing, business unit marketing and field marketing.
  • Seek to Decentralize. Continuously question yourself during the budget planning process: where is the money owned; and where is it spent? IDC guidance is for the typical large tech vendor of greater than $1b in revenue to have at least 45-50% of its total marketing execution "spent" in the geographical regions. Currently, about 36% of the total marketing budget is directly owned and spent by the regions. Add to this the 6% of the typical corporate marketing budget that is "spent" by the field. The total is about 42% of spend in the regions, and so is short of the 50% benchmark goal.
  • Improve Relevancy. Two areas of essential guidance to help with the relevancy effort including campaign management and sales enablement. The first is an improved Campaign Management function. This role should seek to knit together disparate product-line marketing efforts into broader and larger themes. I have observed several top CMO's making these moves in 2008. The second area is Sales Enablement. Marketing needs to improve its ability to get the right marketing assets to the right sales-people, at the right time and in the right format. This is hard to do: its needs go above and beyond product marketing's attempts to do this.