Decade of the CMO

Historically, marketers have played a limited role in driving IT spend. I believe that this is changing, and that selling technology to marketers is a huge opportunity. I believe that this is the decade of the CMO (Chief Marketing Officer).

To set this in context, its helpful to take a look at how the priorities for Fortune 500 companies have evolved over the last 3 decades, and the impact that has had on IT spend.

  1. The 80s was the decade of leveraged buyouts, out-sourcing and managing global businesses. In that environment, CFOs ruled the roost and they drove the adoption of planning and resource management systems, resulting in successes like SAP, Oracle, and JD Edwards.
  2. The 90’s marked the dawn of the information age, and a focus on growth. As a result we saw sales take the pre-eminent role within organizations. Markets like Sales force Management, Customer Relationship Management and Support Management all took off, creating companies like Seibel, Scopus, Vantive, and late in the decade Saleforce.com
  3. The 2000s, has been a decade of consolidation, improving core IT infrastructure and managing IT costs. This focus on CIOs has created companies like VM Ware, Citrix, Symantec and EMC.

Going forward, I believe that this (the 2010- decade) is the decade of CMOs. For one, marketing budgets are 3 X CIO budgets and growing faster. Second, social media, has moved marketing from the side stage to center stage. And, with the advent of digital marketing, technology is now at the heart of all marketing.

Already, this wave has created several large players including Google and Adobe.  IBM, which has acquired (Ck IBm acquistions)  CoreMetrics, XYZ and Tealeaf (which was an Foundation Capital portfolio company), is also building out a footprint in the nascent Marketing technologies space.

There is a school of thought that by the end of the decade, CMOs will invest more in IT than CIOs. So what does this mean for technology start-ups. I think that there are 4 key trends that CMOs are investing behind, and that start-ups should seek to understand.

  1. Empowered Consumers which is all about the impact of social media
  2. All Advertising is becoming Digital
  3. Martinis to Metrics, which is all about the focus on marketing accountability and ROI
  4. The Transformation of the Retail Environment especially due to the impact of smart phones and tablets

In subsequent posts, I will take a crack at fleshing out each of these trends. In parallel, I would love to get feedback on the above.

About Ashu

General Partner with Foundation Capital. Areas of interest range from digital media, mobile and internet infrastructure to all things related to India. Currently on the board of TreeHouse, Aspire, Conviva, Agni and TubeMogul.
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3 Responses to Decade of the CMO

  1. Amy Masreliez says:

    Love your summary. I am interested in your thinking about macro changes to customer and partner segmentation models across consumer, small business and enterprise in relation to community vs audience based marketing, multiplicities of identity management, personalization with Big Data and cause based marketing with crow funding, crowd sourcing and Microfinance models for developed and developing economies.

  2. John McNulty says:

    Thanks for sending Ashu. I agree with you on the thesis – the interesting thing is the cycles of technology that have been occurring every 15 to 20 years for the last 40 – 50 years in computing continue to swing from centralized to decentralized back to centralized. Always with a in the past this happened with a much smaller “counter wave” driven by new technology in opposition. The “centralization” of cloud computing and it’s enormous impact is being countered this time (decade of 2010) by a much bigger than normal counter way of distributed client computing power driven by the wireless mobility of smarter smartphones and tablets. Consider what we’re seeing for the first time is a “cooperative evolution” of new centralized and distributed technology rather than disruptive. A much more powerful change and it makes the opportunity for the CMO considerable bigger and provides unheard of tools and rapid testing cycles to CMOs that they have never had in the past.

    Hope that makes sense…

    Have a great weekend!

    john

  3. Lumimas says:

    The 10 habits of hihlgy effective CMOs You’ve probably heard of the perennial self-help bestseller, “The Seven Habits of Highly Effective People.” But what’s it take to be a top Chief Marketing Officer? Jim Stengel, the hihlgy effective former global marketing officer at Procter & Gamble, offers 10 tips, for free.

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