IBM’s Yuchun Lee on the CMO ROI Imperative

IBM’s not been a major player in online advertising. That’s changing. The IT giant wants to use its experience in business intelligence and cloud services to venture into newer realms, such as data-driven digital marketing. Yuchun Lee, general manager of IBM’s enterprise marketing management group, leads its efforts. Lee, whom recently contributed to IBM’s latest global survey of 1,734 CMOs in 64 countries, spoke with Digiday about the challenges CMOs face in explaining a cluttered ad tech market to bottom line focused CEOs.

What is the biggest challenge facing major brand CMOs?
It’s definitely addressing ROI. There’s this strong feeling among CMOs that they will be judged by that measurement in the future. It will be considered the most important determinant of their success. Part of this also comes from market demand. There is a much higher bar now in terms of what kind of measuring capabilities that brands expect out of marketing. Most CMOs seem to feel that they are insufficiently prepared to come back with the hard numbers on ROI. A lot of this has to with the fragmentation that has been created in the marketing industry. Every channel has a separate measurement, and the measurement on ROI has been put in a silo. And it is a problem because you can’t really jump across these channels. If you jump across the channels you can’t really measure cause and effect in marketing on the other channels. That’s where we see some of the newer technologies coming in that can help them track and consolidate the data.
What is your take on how CMOs are feeling about navigating the ad tech landscape and adapting to industry-wide change?
I would say that although it’s somewhat messy out there, and everyone has their own opinions, if you take a poll of most of these CMOs, and many of the industry pundits, they will be in agreement about what the future will look like. They see a shift of power towards the consumer. Marketing is going to be a lot more relevant to consumers, and they are going to have to deal with the continued proliferation of devices. There will be more in-bound engagement strategy, socially based rather than outbound. So at the macro level they are in agreement, but when you go down the list, there is a big gap between what they are willing to do and what they understand that they ought to do. If you go down the list and ask how well they are listening to customers in social media, how willing they are to talk about privacy, how much they want to stitch together interaction channels rather than treating them like silos, you see that there is a big gap between actions and the “aha” moment that they’ve had in these areas. In our study, companies that answered “we are highly prepared” to adapt to change, where also the most financially successful companies.
Do CMOs feel that their organizations are taking their insights and data seriously?
They are now. There is much better awareness than just two years ago by CEOs that the CMO deserves a seat at the table, because the survival of the company depends on being relevant to the customer and you need data to understand what that customer is looking for. Marketing stitches together all of this data and delivers an assessment of the kind of relevancy that the company needs to deliver. Only the CMO can really pull together data from different channels and deliver insights about products and services and connect it to the brand or the promise of that company.
As big data becomes more user-friendly, will we see strategy adoption driven by business intelligence, rather than CMOs falling in love with new toys masquerading as solutions?
Speaking from my own experience, even though many individual CMOs seem to be chasing new ad technologies, most of the rest of their organizations seems to be still struggling to keep up with new consumer technologies and devices like iPads which are a just a few years old. That’s a significant gap, between the organization’s and the CMO’s understanding. But in the future, the answer is yes. There is a huge challenge for CMOs in that they must keep up with new technologies, consumer devices and also make sense of all of their data. Will we see a deeper connection between business intelligence and digital strategy? Absolutely.
What does branding mean now online for CMOs?
Social media — the conversations, the reviews and the interactions that occur– are beginning to constitute the brand itself.This is where brand CMOs will continue to invest their efforts. That’s the major change that we see in this space.

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