Chapter 8
The Arrival of Left-Brained Leaders and the Rise of the Marketing Department

Traditionally, creative people who have found themselves working in business have gravitated toward careers in marketing and advertising. At advertising agencies, there's even a place of honor for this sort of people: the creative department.

In the television show Mad Men that portrays a 1960s-era advertising agency, the protagonist has many characteristics of a right-brained person. Don Draper is a creative type with a penchant for developing ad concepts that bail him and his agency brethren out at the last minute. There's precious little data informing Draper's campaigns. What he delivers to clients is all about the ineffable, immeasurable power of creative ideas.

The very first episode of Mad Men showcases Draper's approach to his work as he struggles to come up with an advertising concept for Lucky Strike cigarettes. He jots ideas on a cocktail napkin in a bar. He throws a research report in the trash. And finally, at the crucial meeting, as he stalls for time asking the owners of Lucky Strike how their cigarettes are made, the idea hits him in a flash of insight: “It's toasted.”

What's interesting about Draper's creativity and his persuasiveness is that the goal is first and foremost about selling the client on the idea. Actually selling cigarettes to consumers is secondary.

But by the seventh season of Mad Men, a computer—not a PC but a boxy IBM System/360 mainframe—is installed in the Sterling Cooper & Partners agency. The mainframe makes some people, Draper included, nervous, perhaps because it will have the power to determine whether their advertising campaigns are actually working.

In fact, one character, Michael Ginsberg, becomes unhinged upon the computer's arrival. “What am I, Cassandra?” he says. “That machine came for us, and one by one…”

The trajectory of the advertising industry that is depicted in the Mad Men series over its first seven seasons has a lot of similarities to the changes that are now gripping the marketing world. Data and the brain are triumphing over raw creativity and gut feelings. Technology is inexorably barging into the marketing department. And despite the discomfort that the Mad Men characters display regarding computers, the end result of data's increasing role in marketing has led to the department's rise in business importance.

As data-driven digital marketing has become the predominant model of marketing, the kinds of people who practice marketing and advertising are certainly different sorts than they used to be even five years ago, let alone in the Mad Men era. There are more mathematically inclined people in marketing now—and a diminishing number of would-be novelists and screenwriters.

“The vast majority of CMOs out there—maybe really the entire marketing department—are what we call right-brained people,” said Glenn Gow, CEO of Crimson Marketing. “They are hired for their creative abilities and their ability to drive outbound marketing campaigns and then do branding. The world has changed very, very quickly, and it requires left-brain talent. It requires people who can make sense of the data that's coming in.”

In the past, a major responsibility of the CMO was managing the relationship between the company and the ad agency and finding the creative genius who could deliver blockbuster TV spots and memorable slogans. “Diamonds are forever.” “Just do it.” “Where's the beef?” And, of course, “It's toasted.”

Joe Hix is representative of the statistically and mathematically oriented people who are increasingly participating in the marketing and advertising world. He grew up in a household with a left-brained bent. He says his mother, Janet Soldan, was a statistician for the National Collegiate Athletic Association (NCAA) and used a data-driven approach to become an ace fantasy football player. Hix said he learned to use Excel spreadsheets before he learned to use a calculator. At the University of Oklahoma he had a triple major in computer science, business administration, and marketing.

After graduating in 2003, he put those disciplines to work at a small, Dallas-based agency called New Media Gateway, which was a pioneer in helping marketers create 360-degree views of their customers across interactions in search, e-mail, and even offline channels. At New Media Gateway, Hix began to see the value of a data-driven, customer-focused approach.

“We recognized that it wasn't about customizing channels; it was about customizing experiences across all channels,” Hix said, adding: “We were ahead of the market. We would be going and pitching this stuff, and people would look at us like, ‘Are you crazy? You are going to do dynamic print that has an integrated personalized URL that's going to have integrated personalized numbers for a given offer, for a given product, for a given segment, and you are going to coordinate that with media and coordinate that with billboards?’”

It was a hard sell, Hix recalls, with many potential clients insisting that what they were proposing was simply not possible. “We were a bunch of young guys,” he said. “We didn't have any gray hairs to say to us, ‘No, they are right.’ So we created true integrated data sets when we would actually demo this that could prove out—at a customer record level—the value of personal integration and cohesive experiences across all channels. So in our business alone we had to use big data, because we had to show our initial clients that we could make this work.”

First the smaller clients hired New Media Gateway, and then the big ones did. “We went from being a nobody shop to landing AT&T, Verizon, T-Mobile, Sprint—and that is just telco,” Hix said. “We had every major Internet carrier. We had every major financial institution almost overnight.”

After New Media Gateway, Hix honed his data-driven, customer-focused mentality at other agencies such as Omnicom's Enterprise Spectrum, Javelin Direct, and now Moxie Interactive, where he is senior vice president of technology strategy and a key part of his role is still helping marketers develop a 360-degree view of their customers.

“The goal,” he said, “is to create infrastructure and framework up and down every touch point of the enterprise and across the marketing spectrum so that, starting with acquisition all the way through churn, we are constantly adding to your profile. That starts at the very beginning with collecting true structured marketing metadata, essentially like hooks on a fishing line. We are constantly tagging that back to the metadata structure, so we know Joe was in the acquisition campaign to add a line with a smartphone in Texas last year, and he clicked on this link, which was tied to this offer.”

Hix stresses that the capability to use data to know customers and prospects better is real, and he no longer—as he had to do a decade ago—must work so hard to convince marketers of the possibilities. “It is not about feasibility anymore,” he said. “It is about value.”

For instance, by identifying and targeting prospects with the highest potential lifetime value, marketers can use targeted offers with an eye on generating more revenue for their companies. Additionally, marketers can also spend less (or nothing) on trying to lure prospects whose lifetime value is marginal. “Marketers tell me, ‘I want to raise revenue by 10 percent,’” Hix said. “I tell them, ‘What if I could drop your spend by 50 percent? Is that raising the bottom line?’ And they say, ‘Yeah, okay. Cool.’”

This kind of positive financial impact doesn't require a huge investment, Hix says. He has helped marketers build integrated databases with open source software and inexpensive blade servers. “With big data, people think that they have to go invest billions of dollars or millions of dollars to get started. They don't. You can do it on open source almost for free,” Hix said.

Well, as long as you can find the people with the combination of marketing and computer science degrees to help you build it.

Individuals like Hix who have technology backgrounds are increasingly a central part of marketing departments as they grapple with installing and implementing marketing automation software, analytics tools, and other elements of the marketing stack. “How the Presence of a Chief Marketing Technologist Impacts Marketing,” a report by Gartner, a research firm that focuses on the technology sector, found that 81 percent of big companies had a chief marketing technologist or equivalent position in 2014. That figure was up from 70 percent a year earlier. (Both figures are likely higher than among nontech businesses.) Gartner defines a marketing technologist as a person whose responsibilities include “aligning marketing technology with business goals.”

Nick Panayi, director of global brand and digital marketing at Computer Sciences Corporation (CSC), divides his marketing team into three kinds of people. “Content jockeys,” the ones who write blogs, produce videos, and compose white papers, are the closest to the traditional creative types. The other two roles are much more math and technology oriented. The “infra-jockeys” architect, run, and maintain the marketing technology ecosystem, and “demand gen jockeys” optimize demand generation efforts using sophisticated marketing automation systems.

Brian Krause is the vice president of global marketing and communications at Molex Incorporated, a top manufacturer of electronic interconnect solutions. He has worked in the industry for more than three decades and he credits his success in the last eight years to being focused on the data-driven, digitally focused approach of his team, who represent a blend of seasoned and younger professionals. “One of many things we do right at Molex is hire the best people,” Krause said. “Often the best people are not only fiercely intelligent, but ask tough questions and challenge the status quo, not simply for the sake of being heard, but out of a passion to improve how we as a company connect with our customers. From a leadership perspective, that requires recognition of better ideas—and knowing when to let go—to give talented people space to collaborate and bring the best ideas to fruition. The development of our social media program is a good example, leveraging our diverse expertise across the globe to define a social media direction and build out an effective platform for reaching audiences. Molex has been engaging with customers, employees, and partners through social media for more than six years now, which is a tremendous accomplishment for a B2B company.”

At some companies, especially in the technology sector, even CMOs have come up through the technical side of the business. Matt Ackley is now the CMO and senior vice president of product at Marin Software, which offers a digital advertising management platform, but he got his introduction to marketing at eBay, where he was a software programmer. “I was not a marketing person to begin with,” Ackley says. “I actually used to code for a living, so I can tell people I was dragged kicking and screaming into the world of marketing. But the reason I went in to marketing is because back in 2005 eBay recognized that, one, it needed to do a better job of online marketing, and, two, it was going to be a data-driven exercise—so they wanted technical people in that organization.”

Ackley says the best marketing organizations must embrace the role that people with technology backgrounds can play. “Marketing departments should have developers who can create dynamic ads, who can maybe run a test and write their own mobile app,” he said. “I do think that the CMO needs to be as much a product manager as somebody with a marketing background.”

The creative part of the CMO job can be developing ad concepts, but now that part of the role also includes creating new technologies that are, in and of themselves, marketing efforts. “Marin is an SEM [search engine marketing] platform,” Ackley said. “It's a general marketing platform, but what is essentially Marin, I built that at eBay. We built the tool that interfaces with Google AdWords. We built the tools that interface with Microsoft's AdCenter.…We built our own affiliate platform [at eBay], and because we built our own platforms, we built our own bidding algorithms. So, for instance, if I wanted to do day-parting on search [bidding only on certain parts of the day], I actually built that into our application at eBay—the ability to bid different amounts for different keywords at different times of the day. We built that before Google built that.”

Building this kind of technology is the new marketing creative. “When I ran marketing at eBay, I was actually more of a product manager than a CMO,” Ackley said. “In a sense, we were designing technology and algorithms to acquire and retain users. I did not spend a lot of time thinking about brand messaging and creative and whatnot. If we had a creative question, we just tested it.”

This data-driven approach worked. It gave eBay control, speed, and insight. “We gained an advantage over everybody else,” Ackley said, “because we learned how to use our data early. We were able to do this quickly, because we had the right organizational structure. I had a development team that reported to me. I had an analytics team that reported to me, so I didn't have to run off to core eBay product management to build a search bidding tool.” And now he runs marketing for Marin, a company bringing the power of what he built at eBay to other companies around the world.

At Domo, a fast-growth business intelligence software company, Heather Zynczak, who is the company's CMO, has a background that has a lot in common with Ackley's. “I started out my career in coding,” she said. “I worked at Andersen Consulting back in the early 1990s, back before there was a lot of packaged software.”

Zynczak got an MBA from Wharton, a metrics-oriented school. After graduation, she worked at Booz Allen Hamilton and Boston Consulting Group, where she focused on marketing with a numbers approach. Stints in product management and marketing at Oracle and SAP only sharpened her mathematics-based approach to her trade.

“I don't think of myself as a typical marketer,” she said, “and I'll tell you why I feel like I'm a good marketer at this stage of the marketing evolution. If you think back to the 1960s and the marketing world back 20, 30, 40 years ago, you just had to be super-creative. You came up with an amazing idea and then you sat back enjoying martini lunches until you won an award for it later in the year. Things are wildly different today. Yes, creative is extremely important, but you can measure whether your creative is good creative within minutes. Everything is extremely data-driven, and marketing can now be accountable for ROI.”

Ironically, Zynczak makes the case that this numbers-driven focus allows room for even more creativity by the marketing team. “There is this conversation going on right now among the marketing community of ‘Are we getting too data-driven? And is it going to hurt our creativity?’

“I would emphatically say, ‘No! It's going to help us.’ I let the younger people on our team come up with new and unconventional ideas. I let them run with them, as long as they are within a certain budget. They'll try new ideas, and because we test them, in a couple of days I'm going to know. This approach has produced some of our best marketing efforts. I think we're creative, because we take those risks. It's like with my data I have a parachute. I'm okay jumping off that cliff, because I've got the data parachute behind me.”

With more access to data, marketers are better able to prove that their spending leads to revenue. Instead of being a cost center, many CMOs have proven—or are on the way to proving—that their department is actually a profit center.

“Marketing is sitting on top of this treasure trove of data,” Crimson's Gow said. “They are being pressured to contribute to revenue in some way, and they're trying to make sense of these two pressures: I have all the data, but I don't know what to do with it; and now I am being told I need to contribute to revenue. So we believe that there are opportunities for data scientists and marketing people and the CMO to integrate this data in a way that you can gain insight; you can do the targeting; you can do the measurement.”

With data, marketers also gain clearer insight into customers and prospects, which has given them more input into their company's future direction. Changes in the buyer's journey, where prospects conduct much of their research online, have elevated marketing, because the department has a unique perspective on the company's target audience. As CSC's Panayi pointed out, marketers “all owe a debt of gratitude to the Corporate Executive Board for the research they've done around the buyer's journey turning largely digital. A lot of prospective customer-buying ‘signals’ are now digital and increasingly difficult for sales to identify. In sales organizations, where marketing was often seen as not that relevant, guess what: about 57 percent of the buyer's journey is now known to be digital. Sales knows full well that only marketing can shed light on that 57 percent, so this shift has increased the level of communication and interaction between sales and marketing tenfold.”

With this insight that the buyer is doing the vast majority of product research before ever talking to a sales rep, marketers play a larger role in steering their company's future. A March 2014 IBM report, “Stepping Up to the Challenge: CMO Insights from the Global C-Suite Study,” found that 63 percent of CMOs have “involvement in business strategy development.” Among other C-suite executives (other than the CEO), only CFOs, at 72 percent, were more regular contributors to strategy. Only 42 percent of CIOs were involved in business strategy.

“We are the last to come to the table in this data revolution,” Domo's Zynczak said of the marketing department, “but arguably the most important.”

At some companies, former CMOs have risen to the CEO spot, a job formerly reserved for executives who came out of operations or finance. In an August 23, 2013, CMO.com article, “Why More Marketers Are Taking the CEO Reins,” Thomas Yang, a partner at consultancy PrimeGenesis, named a handful of companies that had recently named former CMOs to the top job:

  • Royal Dutch Shell named Ben van Beurden its CEO. He was previously the company's director of refining and marketing operations.
  • RadioShack named Joseph Magnacca as CEO. He was previously CMO of Walgreen Co.
  • Ruby Tuesday appointed JJ Buettgen president and CEO. He was previously CMO of Darden Restaurants.
  • Audi of America named Scott Keogh, its former CMO, to the CEO role.
  • Mercedes-Benz USA elevated former CMO Steve Cannon to CEO.
  • Gilt Groupe named former Citigroup CMO Michelle Peluso as CEO.

Yang explained the trend: “Companies have no choice but to better understand customers' needs. It's a necessity for success—and survival. The call for more customer-centric strategies starts at the top.” Restated, marketers are the closest to the voice of the customer and have the most significant ability to move shareholder value. It is only a matter of time before they are running the entire organization and instilling customer-centric cultures to drive success.

Joe Zawadzki, CEO of MediaMath, a company that describes itself as a marketing operating system, is a big believer in data's role in marketing. He says the rise of the marketing department is driven by results, metrics, and data.

“There is definitely a new class of marketer,” Zawadzki said. “I think of it as outcomes-driven as opposed to inputs-driven; that is, it's about results. It's a P and L role. That's a seat at the big boy table when you tie your effort to bottom-line results directly.

“The old CMO was really focused on ‘What am I spending on TV, and what am I spending on direct mail and print?’ Now, it's much more about what's working. ‘How do I reallocate based on ROI? And how can I just make more prudent investments that produce better results?’ Because the metrics are increased and becoming the same metrics that the CEO and CFO look at.”

Only by aligning their goals and metrics with the CEO's business objectives can marketing executives rise from the marginal position they have too often held within their companies. Joe Payne, former CEO of Eloqua, explains that marketers need to be more focused on business metrics than, for example, the latest modifications to an ad campaign: “I always encouraged my marketers to come to the weekly meeting with the same data every week,” Payne explained. “The sales guy comes with the forecast. He doesn't come with the forecast and then the next week with some other thing. The CFO doesn't make up his own metric. He doesn't say, ‘I don't like that cash flow statement that we use for GAAP, so I've made up my own cash flow statement.’…I think the CMO finally has the data to say, ‘Here are our numbers this week. Here's where we are against our target.’”

Payne doesn't doubt that the marketing department has always been a contributor. The difference now is that marketers have the data, tools, and metrics to prove it.

“It was very hard for marketers to articulate how they were contributing,” Payne said. “It's like Supreme Court Justice Potter Stewart, who said he couldn't define pornography, but ‘I know it when I see it.’ And that's the thing about good marketing. Most people are like, ‘I can't tell you what good marketing is, but when I see it, I know it.’ That's just how it was with marketing. But now we can judge marketing based on results, and the hardest part that I've found in my career in the last 10 years, or even the last five years, is to get the CMO to come to every meeting with the same report week after week.”

But marketing executives at a variety of companies are putting Payne's advice into action. These marketing executives are focusing on data when they present at company meetings. The response by other C-suite executives to this approach has been quite positive.

Domo's Zynczak prides herself on being data driven and, like an increasing number of businesspeople, believes marketers must be held accountable for their spending and for producing bottom-line results. Still, too many marketers are not being held to this standard, she says. “How many marketers are held accountable for ROI?” she asked. “How many marketers are expected to know their contribution? And how many marketers are held accountable in the co-op plan for the number of leads they generate, or the engagement rate of customers, or customer satisfaction? How many marketers have started to show their own value?”

Zynczak counts herself and her team as being among the marketers who are demonstrating their value. “We're actually being held accountable on what we provide the company,” she said. “What's our revenue contribution? Give me a hard number—not ‘we won a marketing award.’”

When she is in a meeting with her fellow C-suite executives at Domo, marketing is on equal footing with finance, product, information technology, and other departments. “Marketing is such a big part of the company, and I am a valued member of that team,” Zynczak said. “It's no longer that the finance guys, with the CEO and our president, sit down and work out the model and then just come tell marketing what my budget is and what I need to hit. Now, I take part in those discussions, because I provide value from a data perspective.”

At Edmund Optics, Marisa Edmund, the company's vice president of marketing and communications, said that having access to data has given her department an elevated role in the business. “Ninety-nine percent of what we do in marketing now is based on data and analytics and has been made easier by being online,” Edmund said. “For example, we recently did a presentation to our upper management leadership team. That presentation was regarding SEO [search engine optimization] and SEM [search engine marketing] and how it works. It had statistics and looked at conversions and how we track some of these online metrics. Every point we made was backed up by a number or a ROI technical statistic. Our CFO after the meeting said, ‘I loved your presentation. I loved that everything had numbers, and I loved that I can trace it back and understand what you're doing based on that and see how it assists in growing the company.’”

This data-driven approach beloved by CFOs is not reserved for marketers like Edmund Optics. There is nothing special about the company that makes it predisposed to a statistically based approach to marketing. At virtually every business, marketing is in a position to excel because of metrics, because of data.

Lisa Arthur, CMO of Teradata Marketing Applications and the author of Big Data Marketing (John Wiley & Sons, 2013), said she fears many marketers may be blowing this opportunity to play a bigger role in their company's destiny. She continued by saying that this opportunity is guaranteed for the marketing department and the CMOs and their teams have to seize it.

“There's a worry that marketing has a history of going off and doing their own thing in the silos that we talk about in the book,” Arthur said. “Marketing potentially will miss this opportunity that big data provides. What's next is we need to show we get it, and then demonstrate how to use data for differentiation and ultimately to drive value for the customer, which will drive value for the business.”

Joe Payne says some CMOs and other marketing leaders will have to struggle against their own innate creative tendencies. They will need to rise above a sometimes deeply held bias against the numbers and statistics that link marketing with the overall goals of the business. Many marketers resist this directive, Payne says, because they say, “If I wanted to be boring, I would have been a CFO.”

A numbers-driven approach is now not only possible but necessary to be successful. “When the executive team gets used to looking at that data,” Payne says, “then they get good at identifying what the issues are and what their bottlenecks are. And then they might say, ‘You're having problems getting people at the top of the funnel. What are you doing about that?’ And the CMO will say, ‘Let me tell you what's working and what's not working.’”

And then a dialogue begins to solve the problem in a data-driven way. And when those dialogues start happening consistently, the company is on its way to being data driven.

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