Home >Industry >Infotech >Make way CIOs, CMOs: Here comes the CMTO

Mumbai: Till even five years back, senior executives who headed their respective marketing and technology divisions, especially in large organisations, would seldom converse with each other about their budgets or strategies. They would independently chalk out business plans that, sometimes, would even work at cross-purposes.

That scenario has drastically changed.

Spending on digital technologies comprising social, mobility, cloud and analytics (SMAC), machine to machine (M2M) and the Internet of Things (IoT) has clearly prompted companies to encourage more dialogue and collaboration between marketing and technology functions.

It has even resulted in the creation of a new role—that of a CMTO or chief marketing technology officer—in some companies.

Many companies now have a chief information officer (CIO) or chief technology officer (CTO) handling business strategy as chief strategy officer as well. In other cases, the chief marketing officer (CMO) oversees technology functions like analytics, social and mobility, and also shares the role of chief digital officer (CDO).

These designations are no fads. As marketing becomes more aligned to business objectives with digital thinking becoming embedded into the overall corporate strategy, it would give rise to new positions in the C-level suites such as chief creative officer (CCO), chief customer experience officer (CCEO) too, according to a report released by Nasscom, the information technology (IT) industry lobby, on 3 September.

The fact is that marketers have started to use technology at each step of the marketing value chain—from product planning and media buying to customer engagement to sales and after-sales.

Industry veterans and analysts believe that CMOs today have to understand the new buyer who is sophisticated and self-educated, regardless of whether his company is consumer-facing (business-to-consumer) or selling to businesses (business-to-business).

The reason is simple. The new buyer does his research online and connects with peers much before he talks to vendors.

The informed, connected customer is showing increased propensity to transact on the Internet. Globally, online buying is estimated to have reached $1.5 trillion and is expected to touch $2.4 trillion by 2018, growing at a compounded rate of 12% annually. Currently, North America accounts for the largest share of e-commerce in the world with 33% of total e-commerce sales.

However, given the high scope of digital penetration in the Asia-Pacific region along with the constantly growing appetite of China for e-commerce, the Asia-Pacific region is expected to surpass North America by the end of 2015, according to Nasscom.

The CMO, on his or her part, needs to understand how much the buyer knows, where he or she has come from and where he or she will go next.

Here are things that the CMO needs to keep in mind.

Mobility: India has more than 248 million mobile Internet users and the figure would have touched 322 million by the end of June 2015, implying that 92% of Indian Internet users access the web through mobile devices, according to Nasscom.

Currently, brands and agencies are seeing mobile merely as a device, an extension of websites or brick and mortar, and miss the mobility aspect of the device, the report said, adding that going forward, mobile content would be based on four key aspects: consumer’s context changes with location; consumer’s attention span is short; consumer is looking for instant gratification (while on the move); and consumers are looking for bite-sized interaction.

There is also the investment in mobile marketing that is forecast to rise exponentially with the adoption of wearables, and the opportunity is expected to reach close to $30 billion by 2025, according to Nasscom.

The challenge, though, is that a majority of the mobile services available in India are based on 2G technology. The adoption of 3G/4G technology is expected to accelerate in coming years with improved spectrum pricing and management. By 2020, 3G and 4G technology is expected to be equally dominant in India, post which 4G will be in the lead, the report said.

Digital Analytics: This would become the bedrock for marketing, taking the place of traditional market research. Analytics is not new to the marketers, but the complexity and scope of analytics has increased significantly in the era of digital marketing.

As digital platforms allow marketers to capture customer data at various touch points, marketers are able to run sophisticated analytics on this data to achieve high levels of audience, content, channel and product optimization.

Consider the case of packaged consumer goods company Marico Ltd, which is using business analytics, digital and automation to help transform its core operations, improve consumer insights and innovation processes to take informed decisions.

Interestingly, the person leading this process is not the head of IT. It is Mukesh Kriplani, Marico’s chief of business process transformation who also oversees IT.

Gamification: Technology firm Gartner Inc predicts that by 2015, a gamified service for consumer goods marketing and customer retention will become as important as Facebook, eBay, or Amazon and more than 70% of global 2,000 organizations will have at least one gamified application.

Gamification is the concept of digitally engaging with consumers by using gaming elements such as points, badges and leaderboards. Gartner defines it as a practical technique that allows businesses to leverage insight of user behaviour and motivation.

Online communities: These are a cost-effective way for marketers to reach out to highly targeted audience for feedback, promotions and product sales, among other things.

The Nasscom report cites the example of Nike+ which has built an online community of more than 28 million, wherein members can track their workout activities, set goals, challenge friends, participate in Nike-sponsored events, interact with other runners, get training and listen to music.

Similarly, with over 40,000 Twitter followers and 270,000 Facebook Likes, online apparel and home decor retailer along with Yammer built a massive and highly-engaged customer community.

User-generated content: This is forecast to eclipse branded content soon. From online reviews, to social media posts and blogs, all will have the power to make or break a brand, Nasscom believes. It’s here that “social listening" can help brands know what people think of them.

Companies providing solutions for social listening include Attensity, Brandwatch, Converseon, Crimson Hexagon, NetBase, (Radian6), Sprinklr, Synthesio, Sysomos, Tracx, and Visible Technologies.

Understanding the adoption curve

Digital maturity, of course, is dependent typically on the size of the organization and its vertical. For example, a majority of B2C organizations such as retail, BFSI (banking, financial services and insurance), travel and consumer business are typically high on the digital maturity curve as they seek innovative and new mediums to engage with the end user.

This lends credence to the forecast that by the end of 2017, CMOs are expected to buy more technology than CIOs, both threatening and complementing the role of the latter. The report was released by Nasscom and research firm Offshore Insights Research and Solutions Pvt. Ltd on 27 March 2014.

According to a 29 October 2014 report by Gartner, 18% of the marketing budget was spent to support the customer experience in 2014. The highest marketing technology investment in 2014 was on customer experience, followed by marketing operations and analytics.

In 79% of the companies, marketing has a budget for capital expenditures, primarily for infrastructure and software, according to Gartner. The report added that marketers are managing the profit and loss (P&L) account and generating revenue from digital advertising, digital commerce and sale of data.

About 68% of organizations have a separate digital marketing budget—it averages a quarter of the total marketing budget.

Rise of the CMTO

Going forward, both the marketing function and CMO’s role will keep evolving. CMOs will be expected to fill both technical as well as general management roles, requiring business acumen as well as operations knowledge to fully leverage digital channels effectively.

The CMO’s role will graduate to CMTO, a marketer with considerable knowledge of technology. The CMTO, according to Nasscom, will not only conceptualize but also build solutions and lay down the technical and commercial specifications while working alongside the IT team on vendor selection.

It’s no surprise then that a digital advertising agency like Sapient Nitro launched a CMTO University, which offers an year-long executive MBA-style internal education programme, two years back.

The programme covers a multitude of marketing technology topics, according to Sheldon Monteiro, CTO of SapientNitro. “Today, CIOs and CMOs are in the same buying conversation. Hence, we felt the need to train our senior technologists in the fundamental of marketing," he said.

The CIO’s role, meanwhile, is expected to shift more towards building IT infrastructure, and IT teams will act more like gatekeepers.

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