CMOs face a rough ride in 2023 as new challenges abound

CMOs in 2023
Image by Jackson Stock Photography | Bigstockphoto

ITEM: If the world’s CMOs (chief marketing officers, not chief metaverse officers) thought 2022 was a rough ride, just wait until next year. According to new research from Gartner, CMOs in 2023 can expect even more pressure to drive growth in the midst of disruption as customer behavior continues to shift, cross-functional collaboration gets harder and traditional sources of brand value are eroded.

“As CMOs enter 2023, the current environment demands a relentless focus on customer value, purposeful evolution of the marketing function, and continual optimization of brand value,” said Ewan McIntyre, chief of research in Gartner’s Marketing practice. “In order to meet the enterprise mandate of driving growth amid continued disruption, CMOs must act decisively to prioritize their investments and their strategy for the year ahead.”

Gartner breaks down 2023 for CMOs into three main trends.

1. Shifting customer behaviors amplify uncertainty

Amid inflation and economic uncertainty, customer demand and buying behaviors will fluctuate unpredictably. Inflation is driving cost-cutting behaviors, with 30% of consumers buying more store brands, while almost a fifth are reducing in-person shopping visits in favor of digital purchases, according to a Gartner survey of more than 1,500 consumers in September 2022. This will challenge established brands to maintain brand preference, premiums and loyalty.

Meanwhile, most consumers and B2B buyers will become increasingly wary of sharing their personal data, which many CMOs are banking on to track demand and enable multichannel engagement. Even if customers are willing to share data, evolving regulatory and technical safeguards of consumer data privacy, including browser cookie deprecation and new privacy features in iOS and Android, are also making proven digital marketing tactics obsolete.

McIntyre recommends that CMOs provide mutual value to customers on digital channels throughout the full cross-channel journey. “Enhance the effectiveness of digital marketing by seeking opportunities for personalized engagements that genuinely help customers throughout their end-to-end customer journeys.”

2. Cross-functional collaboration yields worse outcomes for CMOs

Strategic marketing priorities such as innovation, customer experience (CX), and digital commerce have transcended functional boundaries and are now enterprise-wide priorities. However this means actual cross-functional execution is complex.

In many cases, it also means that shared priorities are drawing funding away from marketing departments that have yet to see their budgets return to pre-pandemic levels. That will put extra strain on marketing teams that were already under immense pressure, and could result in lower performance against critical marketing goals.

A March 2022 Gartner survey of 405 senior marketing leaders found that those who describe their approach as “independent” outperform self-described “collaborators” on annual revenue targets by almost a quarter. Put another way, while marketers believe they should take a collaborative approach in theory, those who do in practice are less likely to exceed their customer acquisition goals.

“CMOs must adapt team structures and skills to advance new cross-functional operating models. Streamline operations, establish common key performance indicators (KPIs), and orchestrate messaging throughout the customer experience for greater effectiveness of marketing, sales, and other customer-facing teams,” McIntyre says.

3. Disruptive market dynamics erode traditional sources of brand value

Traditional sources of brand value – i.e. brand reach, positive brand sentiment, and perceived differentiation – are under pressure amid new forces ranging from disruptive market entrants and heightened audience expectations to the ease of learning about unfamiliar brands.

In fact, says Gartner, audiences face disruption at each stage along the traditional linear path to brand value:

  • Awareness: Disruptive market entrants require established brands to reposition themselves to remain competitive, challenging all brands to build and maintain awareness through emerging channels and innovative strategies.
  • Consideration: Over half the 1,999 employees, consumers and B2B buyers that Gartner surveyed in June and July 2022 said it’s less important to choose a well-known brand today than it was three years ago.
  • Brand Loyalty: The same survey revealed75% of audiences have searched online for information about a previously unfamiliar brand while shopping, and only 15% of audiences report being committed to a given familiar brand, eroding the value of having a strong brand at the point of decision.

Essentially, this means that CMOs are going to have to redefine (and demonstrate really fast) the value of brand investments in a volatile environment, says McIntyre. “The strongest driver of brand commitment is a single meaningful brand experience, even with unfamiliar brands.”

The full report is here.

Related article: Marketing is changing universally and telecoms must keep up

Be the first to comment

What do you think?

This site uses Akismet to reduce spam. Learn how your comment data is processed.