Power in Data: Turning Facts into Discoveries
Blog: Smarter CMO Solutions
Yuchun Lee - Yuchun Lee is Vice President, Enterprise Marketing Management (EMM), in the Industry Solutions division of IBM Software Group. EMM is comprised of Coremetrics and Unica technologies, providing the foundation for solutions to help companies automate, manage, and accelerate core business processes across marketing and demand generation. Prior to that, Mr. Lee was co-founder and CEO of Unica, a marketing and analytics software firm that helps companies personalize their marketing campaigns, manage interactions with customers, analyze website visitor behavior, and more.

Innovator Chat: Building a Successful CMO-CIO Partnership


What is marketing's perception of IT?
According to IBM's recent CMO study, the top four drivers of change in the marketing industry are data explosion, social media, the growth of channels and devices, and the impact of new consumer buying behavior, all areas tightly connected to technology. Due in large part to these four areas, marketers have begun to view IT as being critical to their business success. What's interesting is that despite this agreement, they are not turning this perception into a reality, a trend we discovered in our recent State of Marketing survey. According to the study 60 percent of marketers believe their lack of alignment with the company's IT department is the biggest obstacle to reaching today's consumers. As we look ahead it's clear the CMOs need to do more than perceive the importance of IT, they must embrace it.

And what does IT think of marketers?
IT professionals today point to marketing's lack of technology aptitude, which is driving them to make knee-jerk decisions that are reactive and lack a long-term vision. We identified a great example of this in our State of Marketing survey, where 21 percent said they run their mobile efforts in silos, and 22 percent said they run their social efforts in silos. By selecting solutions that cannot be easily integrated greatly inhibits marketing's ability to deliver the types of cross-channel campaigns that customers demand. Marketers must stop side-stepping IT and instead bring them into this process.

Why is it critical for the CMO to join forces with the CIO?
Today the focus of CMOs has shifted from marketing to segments of the population, using a "spray and pray" approach that is imprecise and wasteful, both to marketing to the individual. To do this effectively requires the right technologies, something that CMOs and their teams sorely lack. As a result, CMOs are finally starting to look in-house to CIOs to get a better handle on their situation and to streamline their technology needs. Through this new alliance, they can create a "system of engagement" that lets them plug into customer data, glean an understanding of each person on an unprecedented number of dimensions, and then do the unthinkable: present them with products and services that they actually want, wherever and whenever.

What's in it for the CIO?
The simple fact is, the CMO and CIO can no longer operate on separate stages. By joining forces, the CIO can lend expertise in enterprise IT integration and expand their horizons further outside the firewall. In doing so CIOs have the opportunity to help drive business results through innovation and efficiency -- becoming an essential pillar of the new "C-suite power team."

What approximate percentage of a company's marketing budget should be spent on marketing-related technology and technology-enabled marketing services?
We see roughly 15 percent of the marketing budget in technology spend. It's safe to say that most businesses will need to increase spending in these areas. Start by asking yourself, "how well you know your customers and their unique preferences?" For example, if you are a retailer, do you know if customers are shopping via their mobile devices? If so, what device(s) are they using and how often and what deals are they most receptive to? These answers will help you determine where to begin and how much you need to invest to get the necessary answers.

The Aspen Ideas Festival this past July had a track on "Radical Disruptions: the Transformative Power of Technology." How will the roles of the CMO and CIO change in the next 10 years?
Today's CMO is taking on more and more responsibility when it comes to their company's IT budget and this trend is going continue. In fact, according to Gartner, by 2017 the CMO will have greater control of the IT budget than the CIO. By working together the two sides have the opportunity to share an agenda that taps into both of their areas of expertise, with marketers looking at their jobs from a more technical perspective and IT from a more marketing point of view. Together this new "odd couple" team will be called upon to introduce innovations within the company that drive business outcomes, create return on investment (ROI) and directly impact the success of the enterprise.

What happens if the CMO ignores - or doesn't leverage big data?
The availability of vast customer behavioral information and the ability to analyze it is at the heart of how CMOs can transform their companies to be more relevant to customers. Customers today are tweeting 98,000 times every 60 seconds and that's just on Twitter. Those types of numbers have marketers perplexed. But the fact is that sites like Facebook and Twitter present more of an opportunity than anything. Marketers who don't harness this data will fail, not just in their ability to deliver customers the personalized, multi-channel experience they demand, but also in their ability to maintain the loyalty of their brand advocates, which in the end will result in lost revenue and a short tenure as CMO.

How significant would a CIO say the learning curve is for the CMO to learn about technologies to help measure marketing ROI?

In general most would say that the curve is steep. However it's important to note that this burden cannot be placed solely on marketing. In this partnership, the CIO becomes the teacher, so in many ways a CMO's ability to get up to speed quickly will depend upon IT's ability to educate and the marketer's ability to listen. This is a team effort in the truest sense of the word and the expertise of everyone must be brought into play.

Another AI Festival track was entitled "Innovation and Invention in an Era of Globalization." What sort of innovations do you envision the CIO and CMO being able to achieve by working together?
As I often tell anyone who will listen, this new CMO and CIO alliance has the potential to spawn a tremendous variety of new innovations that deliver value to the consumer. One example I saw recently was the idea of an augmented reality solution that transports the personalized information that has become so common online (such as product reviews and special promotions) into the store using a smartphone.

Essentially using a smartphone camera, advanced image processing technologies capture product images on the store shelf. The images are passed for further processing to the retailer's product catalog database, which calculates ranking of recognized products based on the shopper's preferences, history, recommendations from friends and more. The solution then superimposes product information, recommendations, special offers and more onto the mobile device in real-time. This is just one of the many innovations that are possible that can not only drive revenues, but really solidify the loyalty of your shoppers.

The challenges at small- and medium-sized businesses are obviously different than large enterprises. What are they, and as they develop a strategic partnership, what should be foremost on the minds of CIOs and CMOs at SMBs?
There is a great deal of talk about the disparity between the challenges of big and small- and medium-sized businesses. I think a lot of this is a misnomer. First off, CMOs and CIOs on both sides are being asked to deliver more personalized communication to their target audiences and the answer for each is technology.

A decade ago, solution costs may have been prohibitive to the SMB. However, cloud-based marketing offerings are becoming more prevalent, which makes cost less and less of an issue. In other words, today it's not unrealistic for a small business to compete with some of their larger competitors. In fact, in some cases, these SMBs are winning the race since their organizations are more nimble and more quickly able to embrace this new marketing/IT era.

For more, watch Yuchun Lee discuss the power of customer analytics at the IBM CMO CIO Leadership Exchange in New York this past June.

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