As we move further into the second year of the coronavirus pandemic, the economic repercussions have sparked rumors of a fundamental reset in business roles, including the role marketing plays in driving business. In recent years, high-profile companies have eliminated the CMO role, indirectly fueling more speculation about marketing’s future.
Making generalizations about marketing’s role as a business driver is tricky because it varies across industries and individual companies. At some businesses, marketing is unambiguously the engine that drives revenue, while others classify themselves as “product-driven” organizations. At any given time, marketing leaders might be obligated to:
- Have a precise, data-informed understanding of the market dynamics that drive results, including the business’s position relative to competitors.
- Fully understand the company’s financial position and maintain comprehensive knowledge of relevant marketplace trends.
- Be fully informed about product development, the ideal customer profile (ICP) and how well the current customer base matches with the ICP.
- Have overarching strategies and detailed tactics to drive growth, including recommendations on new product development.
- Be able to produce detailed campaign metrics at every stage so the CMO and other company officers can understand what’s working and what isn’t.
Each of these marketing functions is essential and they don’t necessarily have to be handled by someone with a specific title. But they do have to be managed by someone.
While some high-profile companies that eliminated the CMO role delegated the responsibilities to the division level and/or divided oversight among other company leaders at the corporate level, all of these functions remain vital to business success. Someone still has to be making the decisions, and someone still has to be responsible for marketing performance, regardless of title.
Is Marketing Really in Decline?
It’s also worth noting that some of the most high-profile companies that eliminated their global CMO position subsequently backtracked on that decision, including two of the most well-known brands on earth: McDonald’s and Coca-Cola. It’s possible that they discovered coordinating activities across divisions proved more difficult than anticipated.
So, to the larger point, is marketing really in decline as a function? The most recent Gartner CMO Spend Survey fueled even more speculation, reporting that marketing budgets declined to a record low of just 6.4% of company revenue in 2021, down from 11% in 2020. The report notes that after budgets were cut in 2020, CMOs expected them to bounce back in 2021. They didn’t.
But it’s also true that the pandemic has dragged on longer than people expected, especially factoring in the initial surge of optimism around vaccine distribution, and it’s important to recognize the role events play in marketing budgets, particularly in the B2B space. If in-person events represented 30% to 40% of pre-pandemic B2B marketing spend, budgets won’t bounce back until events do.
Marketing — and Measurement — Remain Essential
Marketing budgets may return to pre-pandemic levels when pandemic challenges are finally in the rear-view mirror, but it’s critical to acknowledge that companies, marketplaces, and people have changed in ways that may be more permanent. Increased levels of digital marketing are almost certainly here to stay, for example, and it’s possible there will be fewer in-person events even after large gatherings are deemed safe because virtual events are less expensive and can be effective.
What we know for certain is that the marketing function will continue to be important to organizations of all sizes. The title of the person who oversees the numerous and complex functions that reside under the “marketing” umbrella may change, but marketing continues to move customers through the funnel from awareness at the top, to closed business at the bottom.
It will also remain someone’s responsibility to drive the most business they can from the dollars allocated for marketing purposes and measure results at every phase to optimize spend. Marketing and measurement remain essential for company success, and that’s why rumors of marketing’s demise should be met with skepticism. Marketing is here to stay.