ICROSSING POV:

ARE YOU READY FOR THE THREE-DIMENSIONAL CMO?

Written by Roger Wood, Vice President, Digital Media, iCrossing

Once upon a time, you could become a CMO on the strength of one attribute. A marketer in the fashion industry needed to be "creative." Rising through the marketing ranks at an insurance company probably meant you needed to know analytics. But tomorrows CMO must be a three-dimensional marketer possessing a social sciences background, brilliant design savvy, and quantitative methods. Brands need to be ready to look outside traditional marketing/communications disciplines to find these skills.

THE EVOLUTION OF THE THREE-DIMENSIONAL CMO

The three-dimensional marketer has emerged from a lengthy and dramatic evolution of marketing that includes a dramatic rise, fall, and rise again. For most of the Twentieth Century, senior marketing leaders rose through the ranks of their respective companies on the strength of one attribute, and in many cases that one attribute came to dominate the marketing strategy of the company with varying degrees of success. If the senior marketer was a whiz at distribution channel marketing, then the company pursued dominance in channel marketing. If product testing was the background of the senior leader, then focus groups and behavioral data prevailed. PepsiCo and Procter & Gamble typified this kind of approach. This circumstance prevailed until about 1985. Then, for all kinds of reasons, (e.g., the assembling and disassembling of conglomerates) the marketing executive declined in pre-eminence. Administrators began to take over. Uninspiring personalities focused more on risk mitigation than on setting the direction of brand and its promise to the customer. Many of these administrators were merely brand stewards. They relied on well-worn mechanisms for maintaining market share and margin and then simply reported on sales week after week. Some of the worlds greatest marketing machines shrank from greatness, beaten into mediocrity by the demand for incremental quarterly growth. As the likes of Sergio Zyman, Angel Martinez, and Geoffrey Frost slipped into a middle age, the flame of inspiration was extinguished. That same year Steve Jobs left Apple. After a "Dark Ages" period in the history of marketing, around 2000 visionaries such as Steve Jobs, Ralph Lauren, and Howard Shultz resurrected marketing as the primary driver of growth and creator of value. The visionaries successfully advocated creating shareholder value with inspired user experience design, a practical application of social science, and a dedication to measuring all aspects of marketing effectiveness as opposed to financial and process tinkering that brought about timid, incremental quarterly earnings growth. The marketers who thrived during this renaissance period created billions in market capitalization. The new breed of marketer also injected energy and flair into modern-day marketing practices through their application of quantitative methods, social science, and brilliant design.

ICROSSING. ALL RIGHTS RESERVED.

ICROSSING POV: ARE YOU READY FOR THE THREE-DIMENSIONAL CMO?

DECEMBER 2011

QUANTITATIVE METHODS
Jeff Bezos emerged from Wall Street with a revolutionary concept of a marketing empire built on a foundation of applied mathematics. Almost overnight, at Amazon he revolutionized the process of measuring consumer behavior. With Bezos, measuring consumer behavior was old school anticipating consumer behavior was new school. Amazon emblazoned a path that changed the fundamental quantitative methods required to be a leading retailer with algorithms that "learned" your tastes based on what you bought, expressed intent to buy, or gifted to others. It was genius, and everyone from the mighty Walmart to Sears confronted a new reality. Bezos was the first large-scale "Pixel Marketer."

SOCIAL SCIENCE
The new breed of marketer to emerge during the Renaissance period also helped other marketers understand that it was no longer sufficient to study consumers in a focus group the way one might study a group of test tubes in a biology lab. Understanding the science of how people really think, interact with each other and ideas, and why they do what they do, was transformed into a legitimate business skill. These are the essence of the social sciences: psychology; anthropology; sociology; and political science. Method Cleaning Products of San Francisco jolted SC Johnson by injecting political science into cleaning products, of all things. Starbucks used the anthropology of why and when people gather to challenge every tea shop in Asia, kaffeehaus in Northern Europe, caf in the Mediterranean, and diner in America. And Ralph Lauren mastered the psychology of self-transformation and self-identity. His imagined worlds have become the real world that weve voluntary chosen to live in.

BRILLIANT DESIGN
Brilliant design of experiences and product gave birth to insurgent companies that toppled the largest, best-administered companies on earth. With the exception of Sony and a few others, companies largely relegated design to the bottom of their lists of priorities. Many CMOs didnt even have a sense of style themselves, yet nonetheless burdened the product teams and marketers with their dull sensibilities. Now Dyson is the most potent brand in vacuums, expanding rapidly into new areas once bereft of intelligent design. Clif Bar is challenging One a Day Multivitamins through innovative designs for delivering nutrition in new and exciting ways. CamelBak and Dakine have taught JanSport and L.L.Bean to think differently about what people want to carry on their backs. But no longer can a marketer possess just one of those traits to thrive. Now you need all three: quantitative methods, social sciences, and brilliant design savvy. The digital world is a measurable and attributable one that demands ever-more sophisticated ways to measure return on ad spend, as my iCrossing colleague Doug Bryan discussed in a white paper on why CMOs need to care about media mix modeling and attribution conversion. And as we all know now, consumers are using social media and consumer-generated content to empower themselves far more than ever before, which is why no CMO can succeed without a background in social science. But appealing to numbers and our social natures wont differentiate your brand. If Apple has taught us anything, its that brilliant design differentiates. Not fancy design. Not complicated design. But brilliant design which can come in the form of a simple Google home page or an elegantly laid out shopping floor. What was the catalyst for the rise of three dimensional marketing? I can think of a few: + The barriers to entry to every industry are lower. Anyone with an idea can bring it to life. Venture capital is more sophisticated and daring, fueled by cheap money. So, no oligopoly is safe from insurgents. + Consumers have changed dramatically. People are better informed, more discriminating, and more fickle than ever. So new skills are needed to sell them in both business-to-business and business-to-consumer models. + The talent and ambition of people both young and old has changed. If you dont reward talented people with opportunity and challenge, theyll leave your company and bring a fight to your doorstep you wont soon forget. Remember, Steve Jobs once worked for Atari, and went on to build the most revolutionary handheld game platform ever with the iPod Touch.

ICROSSING. ALL RIGHTS RESERVED.

ICROSSING POV: ARE YOU READY FOR THE THREE-DIMENSIONAL CMO?

DECEMBER 2011

WHAT ARE SOME EXAMPLES OF THREE DIMENSIONAL MARKETERS?

In the previous section, I identified companies like Amazon, Apple, and Starbucks that embody elements of three-dimensional marketing. These companies are acting as three-dimensional marketers. Consider them to be the inaugural members of the Three-Dimensional Marketing Hall of Fame:

THE THREE-DIMENSIONAL MARKETING HALL OF FAME

Industry Examples Comment
Victorias Secret deployed innovative software for tracking customer relationships. The company transformed the design of a forgotten garment, with great effect. And, Victoria's Secret tapped into sociology. Nearly every guy on Wall Street at one point had a Victoria Secret catalog in his desk drawer. Subaru knows its fans with incredible accuracy. And, Subaru's fans seem to have an almost familial bond. Meanwhile, the cars look like no other, and you can make out its distinctive silhouette from afar. A real 3D marketing favorite. FIJI water has some of the most sophisticated logistics in the business, and its Hollywood appeal broke new ground in mass psychology. Every film director asked for a "FIJI," and assistants promptly handed them one with a silver holder on its base. The industrial design of the bottle eclipsed Perrier in unaided recognition. A star was born. LOral's well-oiled machine enables world-class channel management for a brand without its own retail presence. Its social science tactics have no peer: LOral is synonymous with beauty. Every single L'Oral item is encased with breathtaking design sensibilities. Apple is celebrated, but Bose has always been by its side a calm, reassuring companion to the excitable friend. Bose's direct marketing precision, timeless design, and the veritable cult it has built around the brand is a Hall-of-Fame turn in 3D marketing. Ritz-Carlton really gets it right. Unlike other high-end hotels, its quantitative approach to customer relationship management doesnt distract from the luxury. Its experiences for families and business travelers alike consist of social science focused on creating enduring memories. And, for the most part, you always know a Ritz-Carlton when you see one the architecture is always captivating without being overwhelming. West Elm is like a math major who minored in design. One of the most precise quantitative marketers in home furnishings, West Elm gets high marks for sensible loft-inspired design and a disarming atmosphere.

Apparel and Accessories

CamelBaK, Incase, Ralph Lauren, Victorias Secret

Automotive

Audi, Subaru, Toyota

Food and Beverage

Clif Bar, FIJI Water, Hersheys

Personal Care

Kiehls, LOral, NIVEA

Technology

Apple, Bose, Microsoft Xbox, Nintendo DS, Skullcandy

Travel and Leisure

Marriott Residence Inn, Ritz-Carlton, Royal Caribbean, Vail Resorts

Retail

Janie & Jack, Nordstrom, West Elm

These brands are the bellwethers the ones setting the pace for their industries through their combination of quantitative methods, social science, and brilliant design.

ICROSSING. ALL RIGHTS RESERVED.

ICROSSING POV: ARE YOU READY FOR THE THREE-DIMENSIONAL CMO?

DECEMBER 2011

HOW CAN LARGE COMPANIES COMPETE?

So: how can you find three-dimensional marketers needed to help your brand succeed? Here are four ways: + Hire nontraditional CMOs with a background in design, STEM, or sociology. Support them at the board level. Your marketing leader is the "canary in the coal mine." If the bureaucracy kills them, the company will eventually die too. The future of your company depends on their success. + Keep the existing high performers in the middle layer in place for institutional continuity and knowledge. Remove the laggards who dont want to adopt a new reality. They will turn you company in Zenith or, even worse, Borders. The very existence of your institution will be threatened if you dont act decisively in the removal of laggards. + Hire new kinds of very junior employees. Not only "business" majors. Hire industrial design majors, political science majors, bio-chem majors, and then train them in quantitative methods, conceptualization, and social science. You need their energy and ideas in order to compete with insurgent companies with founders straight out of college. Imagine how competitive Kodak would be in social photography if the founders of Instagram had been enabled to make their dreams come true at a Kodak outpost in the Bay Area, Boston, Boulder, or Los Angeles. + Forget rewarding tenure. Youll miss a Dennis Crowley, Jeff Bezos, or Marc Benioff that way. Dont let untalented corporate politicians control the assignment of talent to core marketing functions. Pure corporate politicians dont thrive at places like Apple, Bloomberg, Amazon, and Under Armour. And, at newer companies such as Tumblr, ORCA, and Flipboard, they dont even exist. Embrace three-dimensional marketing. For a large-cap company, billions in market value are at stake. For a small cap company, it just might be what is needed to take you to the top.

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