Demystifying marketing for non-marketers
What other functional leaders should understand about this role
If you are a functional leader who has risen to the senior echelon of your particular group, you know your own team’s KPIs and laddering, what commonly kicks one over from a junior to a senior role, and similar sundries of everyday professional life. But you may not have a very clear picture of how your peers in other functional areas are measured, incentivized, promoted, or held accountable.
Of the various core business functions, marketing may be the most misunderstood today, with the added double-whammy that it, in spite of that general lack of understanding, also invites everyone’s opinions. Based on our experience, marketing is perhaps the only executive function where it feels as if one’s peers think that they could do a better job. The same is rarely thought or said about the head of legal or the CFO, which are largely insulated from this type of second-guessing. But in marketing, few understand the position well enough to give it the respect that it deserves.
In the pre-internet days, marketing was understood to be a strategic role, managing execution across a relatively small number of available promotional channels. Today, the marketing function has moved past the strategic 4Ps lens to embody customer acquisition, retention, in-market activation, profitability and efficacy of various channels in specific markets, and, in forward-thinking marketing organizations, the end-to-end customer experience. But just as the purview of marketers was expanding, the perception of it being very tactical and execution-oriented also took over: Marketers rising through the ranks who were savvy with emerging, mainly digital marketing channels often prioritized execution over strategy and embraced the showcasing of short-term metrics. Hence the belief that marketing is nothing more than a cost center — because it always requires a rather generous budget — yet no one internally is entirely sure what this business unit actually does.
Part of this confusion stems from the fact that many marketers lack the business depth to articulate their own cases. A marketer who was a great individual contributor stepping into their first managerial role will find a different challenge that is less about quarterly optimization of single-channel metrics and more about incentivizing a team, being able to communicate effectively across the organization — mainly to peers in sales and product — and thinking ahead not just to next quarter but the next three to six. Same goes for the CMO whose last role was running customer acquisition; they were once narrowly focused on growth and ROAS and now suddenly need to speak to peers using different constructs and tie their team's performance to the company's overall strategic goals. It’s not an easy transition, which is one reason why CMO tenures continue to keep getting shorter than their peers in the C-suite. There still seems to be an expectation that the CMO must show their work by changing the logo or the agency, as opposed to being able to affect a key metric.
There’s an inherent mismatch here. You can’t really affect a key metric in three months at even a mid-size company, let alone a large one, but in three months you certainly can give off the appearance of change by switching your agency or tackling some showier type of deliverable. But this only contributes to the misunderstanding of what marketers should be expected to do at specific stages of a company, at differently sized companies, or with varying media budgets.
A comedy of misconceptions
A common myth is that marketing is not critical to a business's success. This one is popular in tech companies, especially amongst those that target developers in a B2B(2C) scenario or provide some type of mid-market glue or middleware that connects other tech companies.
What they're failing to understand is that marketing isn't just about placing paid ads somewhere. Marketing is inherently about telling the story of your company to the audience that should care about you. Things like developer relations and who will be speaking at industry conferences should all fall under the mantle of marketing, but in many organizations, there's very little consensus on what marketers at different levels of the function and at differently sized companies should be able to execute.
Many functional leaders will be involved in the hiring of the next CMO, but what should they ask candidates to ensure that they will be a good partner? There are very few companies that thoroughly think through this before starting the interview process, resulting in some misfires and mismatches.
If you are head of product, for instance, you would probably want to know about the candidate’s approach to working with a product team and their process for forming a go-to-market strategy. Would that be something that's uniquely under the CMO’s purview, or would they collaborate with other teams? Is the role focused on new customer acquisition or more on retention? These are some of the approaches that would be useful to know and understand when working on roadmap-related challenges.
Different objectives for different company stages
To illustrate how the marketing function would diverge at startup, scale-up, and mature companies, we often rely on the following simple framework for outlining different marketing goals and responsibilities tied to the company stage.
In our marketing function framework, the main goal of marketing in a startup with less than $15 million in annual revenue is to gain market traction. This may include building the brand and creating the customer acquisition processes and pipeline in concert with the sales team to ensure that they have all the marketing materials they need to close deals. The planning cycle and outlook typically falls within the three- to six-month range.
In the scale-up stage for companies with annual revenue of $15 million to $100 million, marketing processes are being created, standardized, and scaled. The marketing function will evolve to communicate the company’s story and how its product lines hitting the market are differentiated compared to competitors. The outlook here increases to six months to a year.
In mature companies with annual revenue exceeding $100 million, the marketing function has significantly expanded to act as a type of glue that connects myriad business functions. It must provide a consistent brand voice and presence in the market while managing the needs of multiple stakeholders, ranging from other business units to customers and partners. Marketers in these mature companies must control their budgets effectively, with a longer-term outlook of nine months or more.
Marketing is not a monolith, and it’s definitely not something one can “pick up” or learn over a weekend. There are many nuances to the role and expertise required to succeed. The best thing companies could do to help their CMOs succeed would be to be realistic about what type of marketing team is needed based on the stage of the company, avoid scrimping on headcount budget, and then get out of the way.
One question
How well do you understand the goals, structure, and incentives of other functional teams in your organization, outside of your core focus area? Has that increased, decreased, or remained the same over the past 12 months?
Dig deeper
Institutional disrespect of marketing
Thanks for reading,
Ana, Maja, and the Sparrow team
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Who we are: Sparrow Advisers
We’re a results oriented management consultancy bringing deep operational expertise to solve strategic and tactical objectives of companies in and around the ad tech and mar tech space.
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Founded in 2015 by Ana and Maja Milicevic, principals & industry veterans who combined their product, strategy, sales, marketing, and company scaling chops and built the type of consultancy they wish existed when they were in operational roles at industry-leading adtech, martech, and software companies. Now a global team, Sparrow Advisers help solve the most pressing commercial challenges and connect all the necessary dots across people, process, and technology to simplify paths to revenue from strategic vision down to execution. We believe that expertise with fast-changing, emerging technologies at the crossroads of media, technology, creativity, innovation, and commerce are a differentiator and that every company should have access to wise Sherpas who’ve solved complex cross-sectional problems before. Contact us here.