data-driven insights are only part of the...

DATA-DRIVEN INSIGHTS ARE ONLY PART OF THE JOURNEYTODAY’S BEST CMOS TAKE ACTION

IN ASSOCIATION WITH: AND

CONTENTS

Foreword ................................................................................................................................................ 2

Key findings ........................................................................................................................................... 3

Methodology ......................................................................................................................................... 5

Introduction ...........................................................................................................................................6

Five questions with Peter McGuinness, CMO/CBO, Chobani ......................................... 8

A matter of low expectations? .................................................................................................... 10

Five questions with Marc Mathieu, Global SVP Marketing, Unilever PLC ..................14

Enter the machines ...........................................................................................................................16

Improving performance in data strategies .............................................................................19

How Chobani approaches digital providers ...........................................................................21

Five questions with Robin Matlock, CMO, VMware ...........................................................22

Conclusion ............................................................................................................................................24

2 | DATA-DRIVEN INSIGHTS ARE ONLY PART OF THE JOURNEY

FOREWORD The early days of data-driven marketing were char-

acterized by a wary incrementalism. While most

marketers sensed a major change was coming, they

also wanted to take care to not leap too quickly.

Today those leaps are no longer optional, or even

entirely voluntary.

If you try to hunker down, the seismic upheavals in media consumption and

consumer attention fragmentation will simply throw you in a new direction

whether you like it or not.

The leaders in the CMO community are discovering the power of harnessing the

feedback cycle. They move rapidly from insight to action, action to insight, over

and over again. Like pistons in an engine, this cycling enables the best CMOs to

not only drive their brands forward but steer them in a better direction.

This paper shares some important practices that are changing the future of mar-

keting. It’s not just about what we know, or what we do. It is now about both.

Eric L. Porres

Chief Marketing Officer

Rocket Fuel Inc.

COPYRIGHT © 2014 FORBES INSIGHTS | 3

KEY FINDINGS

On the surface, executives say current marketing results get passing grades. In terms of contributing to sales overall: 90% say their efforts are meeting (62%) or exceeding (28%) expectations. In terms of marketing’s con-tribution to the launching of new products, overall, 85% say their efforts are meeting (49%) or exceeding (36%) expectations.

But digging deeper, this appears a matter of low expectations: • Nearly half of respondents say their company is wasting money in its marketing initiatives—a view particularly evident among insurance and healthcare executives and among CEOs. • Just over half say their organizations do not fully understand who is engaging with their products. • Precisely half say that they do not fully understand who likes or dislikes their products.

Data to the rescue. In the 2013 survey, only 52% agreed that they have a good understanding of big data and its benefits. This year, the figure swells to 77%. Meanwhile, 91% of respondents agree—nearly half strongly agree—that the ability to rapidly collect and analyze data in an increasing number of ways is becoming more important. Moreover, CMOs are significantly more likely to hold this view than are CEOs—an indication that the marketing function at many companies will need to work a bit harder building its business case.

The better the understanding of big data, the stronger the marketing performance. Those who “know” big data tend to significantly outperform those who “do not” across a range of key objectives. That is, those who “know” big data have far keener insight into who is engaging with or who likes/dislikes their products or services. They are also far less likely to feel they are wasting money on marketing initiatives.

Those who understand big data are significantly more effective in targeting customers. Across a range of media, including traditional avenues such as television and print but also across the digital and even out-of-home spectrums, those companies with a good understanding of big data score significantly higher relative to the overall findings.

Those who “know” big data are more likely to pull more data from more sources. Across a range of sources, from the web to mobile, CRM systems, email or even GPS, those who know big data are significantly more active in culling insights. Machine learning plays a critical role. Just under three-quarters of companies, 73%, are actively engaged in the use of machine learning to analyze and derive value from large data sets. Among those saying they have a good understanding of big data, the figure rises to 96%.


Digital advertising is on the rise. In a move complementary to an expanding reliance on data to inform marketing, companies are meanwhile accelerating their investments in digital advertising. To get it done, companies are using a portfolio approach—simultaneously investing more in agencies, technology partners and in-house teams.

In accord with all of the above, businesses are investing in data-focused talent. Nearly three-quarters of com-panies are operating under a significant mandate to improve quantitative and analytical skill sets through train-ing and related initiatives. An additional one out of five companies have plans to implement such a program.

The CEO/CMO partnership. Charting a path for marketing in the digital age requires enormous focus and invest-ment. Getting it going—and keeping things moving—requires a close working relationship with peers from the C-suite. Overall, the survey shows that the overwhelming majority of CEOs report a good relationship with their CMO—and vice versa. But worth noting: such partnerships are significantly stronger at companies that “know” big data.


METHODOLOGY The insights and commentary found in this report are derived from both a survey and qualitative interviews. Partnering with Rocket Fuel, a leading provider of artificial intelligence solutions for digital marketers (Nasdaq:FUEL), and Spencer Stuart, one of the world’s leading executive search firms, Forbes Insights conducted a global survey of 296 senior executives in September and October of 2014. Key demographics include:

Title: CMO (41%), CEO (38%), VP (9%), EVP (8%), other (4%)

Function: marketing (47%), general management (29%), executive leadership (20%), HR and talent (4%)

Industry: manufacturing (16%), insurance and healthcare (14%), retail (12%), banking and finance (12%), technology/software (8%), consumer goods (8%), automobiles and auto supplies (7%), media/communications (5%)

Location: U.S. (48%), Asia/Pacific (21%), U.K. (11%), Europe (11%), Latin America (6%)

Revenue: less than $500 million (11%), $500 million to $1 billion (9%), $1 billion to $1.9 billion (10%), $2 billion to $4.9 billion (19%), $5 billion to $9.9 billion (25%), $10 billion to $19.9 billion (17%), more than $20 billion (8%)

Interviews were conducted with senior executives from eight leading companies. Named interviewees include:

• Terry Clark, Senior Vice President, Marketing and Brand, UnitedHealth Group • Marc Mathieu, Global Senior Vice President Marketing, Unilever • Robin Matlock, CMO, VMware • Peter McGuinness, CMO/CBO, Chobani

Forbes Insights extends its gratitude to our survey respondents and interviewees.


INTRODUCTION Senior marketing executives believe they are doing a

decent job in accomplishing their objectives—a view

confirmed by the research below. But both they—and

their CEOs—also recognize there is substantial room for

improvement. And today, as this report concludes, some of

the most compelling opportunities for improvement reside

in data: its collection, analysis and routing to operational

decision makers.

Consider examples from:

Consumer products | With sales rocketing from zero to $1.4 billion in just seven years, Chobani can no longer be viewed as some upstart—it is now the leading Greek yogurt brand in the U.S. CMO/CBO Peter McGuinness explains that, “as sales leader, our focus is on growing the category.” That means loads of innovation, loads of new products and SKUs—and loads of opportunity for data mining to inform the company’s progress. Indeed, says McGuinness, “we collect and aggregate an enor-mous amount of data.” But the important thing, he insists, is that Chobani turns its data into actions that grow the business. “It’s not what you look at, it’s what you see,” says McGuinness. And at Chobani, “we work hard to find what’s there in the data, we have really smart people doing the analysis—and we ‘action’ the data so that it creates competitive advantage for us in the marketplace.”

On the packaged goods front, consider Unilever, where Global SVP Marketing Marc Mathieu says that today, “everything is digital.” The company, in fact, has enormous stores of data—and it is Mathieu’s belief that “data will change the way we market in ways none of us really yet fully understand.” However, he insists, com-panies need to think about data on “people’s terms.” That is, says Mathieu, “we shouldn’t think of data as a way for us to know more, but as a way to help people in the most positive and impactful way.”

Healthcare/insurance | Those seeking examples of disruption in long-established industries need look no further than healthcare and its close cousin, healthcare insur-ance. But amid so much upheaval, Terry Clark, senior vice president, marketing and brand of UnitedHealth Group, sees tremendous opportunity—much of it data driven.

85%of executives say their efforts are

meeting or exceeding

expectations in terms of marketing’s

contribution to the launching of new products.


“We have enormous amounts of data—and not just mar-keting data but data about outcomes.” One of the key opportunities, says Clark, “is that we can take this data and use it to improve relevance and transparency in ways that can help consumers get the best health outcome at the best cost.” Using data to help consumers find the right information for their needs and make the right choices, and then doing the right things for these con-sumers, says Clark, “is the right way to grow and sustain our business.”

Technology | VMware is a successful technology pro-vider now in the throes of strategic transition. Though building its name in server virtualization, the company is now moving to a broader focus on using software to embrace a new model of IT, one that can best engage customers and prospects, as well as drive inno-vation and growth. This evolution, says CMO Robin Matlock, “has enormous audience implications—from who we engage to the sort of overall relationship we’re pursuing.” It also entails greater reliance on so-called big data. As Matlock explains, “If I were to cite critical success factors, data-driven marketing is paramount. We’re not yet where we need to be, but we’re investing heavily—and seeing results.”

Is “good” good enough? Overwhelmingly, executives say their overall market-ing efforts today are meeting or exceeding expectations. In terms of contributing to sales, 90% say their efforts are meeting (62%) or exceeding (28%) expectations. In terms of marketing’s contribution to the launching of new products, 85% say their efforts are meeting (49%) or exceeding (36%) expectations.

One detail worth highlighting is the difference in perception between CMOs and CEOs. In terms of sales, CEOs are significantly more likely to view performance as exceeding expectations than are CMOs—35% vs. 26%. As for contributing to the launch of new products, CEOs are again significantly more likely to view perfor-mance as exceeding expectations than are CMOs—this time 46% vs. 26% respectively.

Perceptions also vary by industry and location. For example, in terms of contributing to sales, “exceeding” climbs from 28% to 48% in insurance and healthcare —pointing to significant perceived success. By com-parison, it falls to 20% in manufacturing and to 23% for executives from the U.S. overall.

As for the launching of new products, “exceeding” climbs from 36% overall to 50% in insurance and health-care, and to 61% at companies with sales from $500 million to $1 billion, the latter providing some indica-tion that smaller and often fast-growing companies are highly focused on new products. (For a good example, see the “Chobani” sidebar on page 8.) “Exceeding” also falls to 14% at auto and auto parts makers.

Where are you on your growth trajectory? This is very much a chapter one/chapter two story. Starting in 2007, we’ve grown from zero to $1.4 billion today. Getting to $1 billion so fast, that’s chapter one. In chapter one, the giants were sleeping. In chapter two, growth is harder to come by. Today we have the yogurt wars, where Dannon and Yoplait have their own Greek yogurt lines and spend $125 million and $200 million a year respectively to promote their products [in the U.S.]. There are 800 new yogurt SKUs on the shelves, meaning the shelf is increasingly congested. So the Greek-style yogurt market is starting to behave more like a mature market.

How are you responding? We’re the leader. So we’re not going to engage in minor moves that just shift share points from one player to another. It’s our role, our right and responsibility as the leader to grow the category; to increase Greek yogurt consumption. In the U.S. the average person consumes 13 pounds of yogurt per year, mostly for breakfast. But in Europe, it’s 40 pounds a year—because Europeans eat yogurt throughout the day.

So we are innovating, adding products like Chobani Flip, a DIY mix-in that’s more like a snack—to take on the candy bar. Then there’s Chobani Indulgent, our first dessert product for evening—to take on ice cream. And Chobani Oats, Greek yogurt mixed with real ripe fruit and gluten-free, whole grain oats, which is literally a superfood, to take on oatmeal. We’re even looking at savory spreads and dips—so we’re trying to get people to eat yogurt in new and different ways. And we’re working with university athletic programs and nutritionists—and even students and teach-ers—in key regions where the brand under-indexes. We’re also going after new geographies, and consumer segments as part of chapter two. While our competitors commoditize, discount and over-promote, we’re focused on growing the market and driving consumption.

How does data play into your efforts?First, we look at the data from social media. A lot of the innovation and new product launches are driven by social—they’re ideas that come from our customers. We rule the day socially in our peer group, with more Facebook, Instagram and Twitter followers than any of our compe-tition. Think about it, Chobani is seven years young—meaning we grew up socially. We fondly call our followers Chobaniacs, and we’re very transparent/extremely active in our social com-munities, having a deep, rich conversation.


PETER MCGUINNESS, CHIEF MARKETING AND BRAND OFFICER, CHOBANI

QU

ES

TIO

NS

5with


Next, we look at all the attitudinal things like brand health, brand consideration, brand love, pricing and quality. We actually have a very robust, sophisticated tracking system.

Finally, we mine a ton of data from groups like Nielsen and dunnhumby on marketing conditions, Greek yogurt market penetration and where we’re winning and losing. We get rich retail data on velocity and pricing, so we know how our SKUs are moving.

How does what you learn change what you do? We’re able to see the trends and make adjustments in real time. Take pricing. That’s probably the biggest, most sensi-tive lever in our P&L. We’re tracking new products and core products. We analyze sell-through and velocities by SKU, and we can tell you what a penny increase or decrease can mean in overall market share and sales. We watch every retailer, every SKU, both on our pricing and our competi-tors’, adjusting in real time to keep us competitive and drive more volume and remain affordable to all.

What are your next steps? Things move quickly. It’s paramount to this brand that we are innovative and first to market. But we’ve added a lot of science behind the art, a lot of [data-driven] rigor and discipline, so we’re better at observing, measuring and prioritizing. This brand will stretch. We have no short-age of ideas. But we’re doing things in a measured and methodical way to guide our progress.

“We look at the data from social media. A lot of the innovation and new product launches are driven by social—they’re ideas that come from our customers.”


A MATTER OF LOW EXPECTATIONS? Although marketing efforts are exceeding CEO and CMO

expectations, a closer look at the survey evidence suggests

this is likely a case of setting the bar too low.

Three particularly alarming results include:

Wasted marketing investment | Nearly half of respondents believe their company is wasting money in its marketing initiatives. That is, 49% say they either agree (30%) or agree strongly (19%) that their companies are wasting money. As for groups dem-onstrating strong agreement, the figure rises to 45% among insurance and healthcare and 39% among companies with sales from $5 billion to $9.9 billion.

Intriguingly, though CEOs are significantly more likely than CMOs to believe marketing initiatives are exceeding objectives, in this instance, CEOs become the leading critics. That is, 33% of CEOs strongly agree that marketing efforts are wast-ing money, compared with only 12% of CMOs.

Limited insight into who is engaging with products | Over half of executives, 54%, agree (25%) or agree strongly (29%) that their organizations do not fully understand who is engaging with their products. Among those agreeing strongly, the figure rises to 56% in banking and finance and 36% in retail. Also, once more, there’s a vast gulf in perception between CEOs (46% agree strongly) and CMOs (only 15% agree strongly).

Limited insight into customer likes and dislikes | Precisely half of respondents, 50%, either agree (28%) or strongly agree (22%) that they do not fully understand who likes or dislikes their products. The numbers voicing strong agreement rise to 50% among insurance and healthcare companies and to 33% among retailers. Sixty-two percent of those from Europe—over three out of five executives—also cite strong agreement. As for disconnects in the C-suite, CEOs are four times as likely (40%) as CMOs (11%) to voice strong agreement.

49%of respondents agree or agree

strongly that their companies are wasting money.


Data to the rescue So CEOs are significantly more likely than CMOs to view overall marketing performance as exceeding expectations. Simultaneously, CEOs are significantly more likely to believe the company lacks customer insight and is wasting money in its marketing spend. So regardless of which executive’s view is more accu-rate in which instances, the overall conclusion is that there is considerable room for improvement in market-ing effectiveness.

What’s the fastest route to stronger performance in marketing? UnitedHealth Group’s Terry Clark suggests

that better command of data may be the key. For start-ers, owing to the nature of the healthcare and insurance businesses, the company has access to tremendous amounts of data. Not only can the company mine what it knows about its own customers, but it also has access to tremendous stores of industry and clinical data.

But it’s not what data you have so much as what you do with it that matters. As Clark explains, “We use data to make sure we’re giving our members relevant infor-mation. Giving them what they need to make better decisions and to better navigate healthcare based on what we know about them.”

Figure 1 CEOs need convincing…

CEO CMO

“I believe my company…” Agree or Agree strongly Agree or Agree strongly

Wastes money on marketing initiatives 69% 34%

Has limited insight into who is engaging… 74% 41%

Does not understand consumer likes/dislikes 69% 37%

Not only can the company mine what it knows about its own customers, but it also has access to tremendous stores of industry and clinical data.


For example, the company uses observable activ-ity and related data to “better target customers with the right product selection and the right offering,” says Clark. “We use a lot of analytics to message correctly.” Ongoing data analysis also helps the company manage its myHealthcare Cost Estimator, a tool “that creates trans-parency, giving customers insight into achieving the best health outcome at the [optimum] cost,” says Clark. The company is also very active in social media. For exam-ple, UnitedHealthcare’s Medicare Made Clear social media presence has approximately 100,000 followers across different platforms. All told, says Clark, “technol-ogy is and has been critical to our success.”

Our survey provides additional support for this view. For example, 91% of respondents either agree or strongly agree that the ability to rapidly collect and analyze data in an increasing number of ways is becoming more important. This is broadly consistent with last year’s sur-vey, where the overall figure was 87%. However, the numbers voicing strong agreement have increased sig-nificantly—from 38% last year to 48% this year.

While any degree of agreement is significant, strong agreement is a more reliable predictor of where the most action is taking place. The U.S. is likely to be a hotbed of activity, as 56% of these respondents indi-cate strong agreement. Large companies are also likely to be active, as 62% with sales from $10 billion to $19.9 billion and 52% with sales over $20 billion strongly agree that data is becoming more important. Banking and finance sectors also bear mention, with 61% exhib-iting strong agreement.

Note also that CMOs are significantly more likely to view data collection and analysis as increasing in importance (89% agree—but 54% express strong agree-ment) than are CEOs (93% agree—but only 39% agree strongly). This may mean that the marketing func-tion at many companies will need to work a bit harder building its business case.

One reason more companies more strongly agree that the importance of data is rising could be the degree of growing awareness. In the 2013 survey, only 52% agreed that they have a good understanding of big data and its benefits, whereas this year, the figure swells to 77%. As VMware CMO Matlock explains, “The more we work with big data, the more we see its value.”

Even as the overall percentage of companies with good insight into the benefits of big data rises, curiously, so do the numbers saying they lack this understanding. Specifically, in 2013, only 11% of executives said they

Figure 2 The rise of data

The ability to rapidly collect and analyze data in an increasing number of ways is becoming more important—and in many cases MUCH more important.

Strongly agree Strongly or agree agree (mean: 91%) (mean: 48%)

Industry

Banking/finance 89% 61%

Healthcare/insurance 98% 25%

Region

U.S. 86% 56%

Asia/Pac 97% 46%

Europe 100% 15%

Size

$10-$19.9 billion 88% 62%

$20 billion plus 88% 52%

Title

CMO 89% 54%

CEO 93% 39%

Figure 3 Familiarity on the rise

“We have a good understanding of big data and its benefits.”

52%

77%

2013 2014


Figure 5 Data-driven accuracy

Those who understand big data are significantly more effective in targeting consumers.

Digital Paid Earned Out- TV Print Radio Display Mobile Social Social Search of-Home

“Know” big data 61% 49% 32% 78% 66% 41% 61% 59% 37%

Mean 42% 35% 22% 44% 34% 32% 44% 46% 25%

Don’t “know” 8% 31% 0% 15% 8% 23% 54%* 46% 8%

Percentages = those indicating they are highly effective in targeting consumers in each given medium

*Likely a case where, because they don’t really understand big data overall, in this one area where they are seeing a great deal of data, they overstate their effectiveness.

did not understand big data. But this year, the figure rises to 18%. Although this runs counter to a period of overall increasing awareness, the most likely expla-nation is that for some, the more they know about big data, the more they begin to realize how much they don’t know. So many of these relative laggards are on a path to greater understanding—and are only now real-izing just how far behind they’ve fallen.

One thing is certain: the survey evidence shows that the better the understanding of big data, the more capably a company performs. For example, consider some of the marketing challenges posited earlier in the report. In areas such as recognizing customers and cus-tomer preferences and efficient marketing spend, those companies that “know” big data tend to significantly outperform those who “do not” (Fig. 4).

Another way big data is helping companies achieve stronger results is by helping them to better pin-point target audiences. Specifically, the survey asks

participants how effective they are in targeting consum-ers across a range of media, including traditional avenues such as television and print but also across the digital and even out-of-home spectrums. Here, those companies with a good understanding of big data score significantly higher relative to the overall findings (Fig. 5).

In accord with such benefits, nearly all companies are operating under a significant mandate to improve quantitative and analytical skill sets through training and related initiatives. This is the case at 72% of com-panies today, rising to 88% in insurance and healthcare and to 83% in retail. The figure also climbs to 93% at companies with sales from $5 billion to $9.9 billion and to 94% for companies from Europe.

Just under one out of five companies, 19%, have plans to implement such a program, rising to 29% for automo-bile and auto parts makers and to more than two out of five at smaller companies (sales less than $2 billion).

Figure 4 Big data improves insight

Understanding—“knowing” big data—helps companies:

Those who “Know” Those who “Do not know”

56% 25%

54% 25%

50% 40%

Know who is engaging with their products

Know who likes/dislikes their products

Avoid wasting money on marketing initiatives


What are the key challenges you’re facing? Five years ago, our CEO announced a sustainable living agenda. We were challenged to rein-vent our business models to double our revenues but at the same time, reduce the environ-mental impact and expand the positive social impact.

What does this mean for marketing? It’s driving us to reinvent the marketing model of a company like Unilever to make it more sustainable and have a more positive impact on the world. The challenge is even greater when you add the context of connectivity and trust that comes from technology and digital.

This has led us to create a new marketing platform that we call Crafting Brands for Life, which is reinventing the way we think about marketing. We put people first, then we build purposeful brands, and then we unlock the magic of our communication and innovation.

Another way of putting it, marketing was once described as creating a myth and selling it. Now what we’re doing is finding a truth and sharing it. It’s what we believe in—building a business that focuses on improving people’s lives.

If you put people first, you’re not just trying to sell something to them, you’re trying to help them change their behaviors to adopt sustainable lifestyles. Get them to buy a tea that sus-tainably grows. Or consume a chocolate that is certified by the Rainforest Alliance.

A really clear example is in marketing soap. In developing countries, we don’t think just about marketing soap, we think about teaching people the role of hand washing in sanitation and lifting child mortality rates. Then, just last month in Belgium we worked with an entire town to show them products that could help the people in the community lower their cholesterol levels—and we succeeded. So that’s how to do it today.

What is the role of digital in all of this? Everything today is digital; we have a huge amount of data; and data will change the way we market in ways none of us really yet fully understand. That’s especially if we think about data on people’s terms. That is, we shouldn’t think of data as a way for us to know more, but as a way to help people in the most positive and impactful way.

MARC MATHIEU, GLOBAL SVP MARKETING, UNILEVER PLCQ

UE

ST

ION

S

5with


A good example is hair care, where Unilever is the num-ber one brand. Hair is one of the most searched topics by women. So a few years back, we built a platform, All Things Hair. We worked with Google on an algorithm to detect hair trends ahead of those trends actually becom-ing visible. We would then be able to populate the site in a way that makes our brand more relevant to the trends and to people’s needs. And this is a very interesting way to create new brand relevance and create individualized solutions to meet peoples’ needs.

What is the Unilever Foundry? That’s a journey we started a few years ago as a way to identify new approaches to engage with customers on a sustainable basis. Brands can pick out projects, put out briefs describing our needs, and then others can propose solutions. We’ve now formalized and centralized this with the launch Unilever.com/foundry earlier this year. If some-

one’s proposal is selected, then they get money to pilot their technology solution with one of our brands. It’s a great way to tap into the startup community and at the same time reach for our goal to make marketing more sustainable. We hope, in this way, to be working with one of the Facebooks of tomorrow.

Clearly, there is progress on the road to sustainable marketing, but how does this fit with the company’s overall ambitions? Brands like Dove and Lifebuoy today are showing some of our best growth rates, so it is very clear that brands with purpose are integral to our ambition. But the way we think of things, we are not selling more soap, but rather are washing more hands and saving more lives.

“If you put people first, you’re not just trying to sell something to them, you’re trying to help them change their behaviors to adopt sustainable lifestyles.”


One primary area of focus for UnitedHealth Group is improving the customer expe-rience and, ultimately, outcomes. “When one of our members calls, our focus is certainly on answering the immediate questions, but we also use computer algo-rithms to predict the next action that would be most beneficial to that member,” says Clark. “It could be encouraging them to get an important health screening, it could be information they should know about their benefits, it could be prompting a service representative to ask them about their preferred communication channel.” Ultimately, says Clark, “using data—and continuously learning—to provide mem-bers what they need at a given moment is what drives a better customer experience and more positive health outcomes.”

The survey finds that 73% of companies are actively engaged in using machine learning to analyze and derive value from large data sets—a nominal 37% being very active in this regard. As for those companies saying they have a good understanding of big data, the overall figure rises to 96%—65% saying they are very active. Note also that the very active figure rises significantly for those exceeding marketing goals relating to sales (48%) and launching new products (48%).

Closely related, both the 2013 and 2014 studies reveal that a growing number of organizations are finding machine learning to be increasingly important if not criti-cal to an array of marketing initiatives. But again, those companies with a greater understanding of big data are significantly more likely to have big plans for machine learning (Fig. 7).

ENTER THE MACHINESAnother focus for improvement centers on the adoption

of machine learning. Machine learning is one of the key

enablers for turning vast stores of data into actionable

intelligence. As UnitedHealth Group’s Clark explains,

“Across our enterprise, a broad array of functional areas

are expanding their use of data and machine learning to

solve problems.” 73%of companies are actively engaged in using machine

learning to analyze and

derive value from large data sets.


“Ultimately, using data—and continuously learning—to provide members what they need at a given moment is what drives a better customer experience and more positive health outcomes.” — Terry Clark,

UnitedHealth Group

Figure 6 The more savvy and successful, the more use of machine learning

“My company leverages machine learning solutions to analyze and derive value from large data sets”

Strongly agree Agree Total

“Know” big data 65% 31% 96%

Exceeding objectives: sales 48% 37% 85%

Exceeding objectives: product launch 48% 38% 86%

Insurance/healthcare 70% 28% 98%

Retail 50% 19% 69%

Mean 37% 36% 73%

Figure 7 The rise of machine learning

Over the next two years, machine learning will be…

22%29%

42%

44%46%

48%

21%17%

7%

Critical to all initiatives

Increasingly important to most initiatives

Increasingly important to a few initiatives

Mean 2013

Mean 2014

“Know” big data


Digital advertising accelerates In a move complementary to an expanding reliance on data to inform marketing, companies are meanwhile accelerating their investments in digital advertising. When it comes to digital ads, companies today rely on a “portfolio” of agencies, technology partners and in-house teams to meet marketing objectives. In fact, in each instance, nearly half say they rely heavily on each group, broken down as: 53% agencies; 49% technology partners; 48% in-house teams (Fig. 8).

Over the next five years, companies plan to increase reliance/spending/investment in all three categories. Specifically:

Agencies | Fig. 9 shows that 63% of respondents plan to increase spending with agencies—30% significantly. Industries where significant agency spending increases will be most common include automotive (52%) and banking/finance (44%). Companies with sales from $10 billion to $19.9 billion are also significantly more likely to pursue significant spending increases.

Figure 8 How digital ads get done

Agencies Technology partners In-house

Rely heavily 53% 49% 48%

Rely somewhat 35% 44% 42%

Not at all 13% 6% 10%

According to CMO McGuinness, Chobani is a huge “consumer” of digital, data-intensive services. For example, the company works with groups such as Spire, Nielsen and dunnhumby, “and we enjoy great relationships with external provid-ers,” says McGuinness.

But the company does not “over-rely.” That is, Chobani takes the raw, externally-provided data but performs a significant amount of the analysis in-house—and for two key reasons. First, “we believe we know our brands better than anyone else,” says McGuinness. “We know our brand dynamics, our perceptions of the markets are different, so we do a lot of decision tree and shopper intercepts and work out all the implications and needed actions ourselves.”

But the second driver is simply that from its early days, the company had strong in-house resources and expertise. McGuinness himself was the CEO of the ad agency that won the company’s early business—and digital was a key focus. As he further explains, “When a company is growing so fast, everyone has to roll up their sleeves and get things done, so there’s a lot of experience in-house.” Going forward, McGuinness sees no changes. “It’s pretty laborious. And maybe as we grow, expand into drinks, dips and internationally, maybe we’ll outsource more. But for right now, we’re a high-growth company where we just can’t keep our-selves from being hands on. It’s a labor of love.”

HOW CHOBANI APPROACHES

DIGITAL PROVIDERS

Note also that for companies who are already heav-ily reliant on agencies, spending is significantly more likely to accelerate relative to the mean. Seventy-seven percent plan spending increases (33%) or significant increases (44%), indicating that the relationships are working and investments are paying off.

Technology partners | Investment is also on the rise with technology partners, where 72% plan to increase (38%) or significantly increase (39%) spending. The fig-ures for those planning significant increases rise to 75% for insurance and healthcare and 62% for auto and auto parts. Far above average numbers of companies from Europe are also planning significant spending increases (79%), as are companies with sales from $5 billion to $9.9 billion (65%) and those with sales over $20 billion (56%). Again, those already the most reliant on external

providers are significantly more likely to be planning a significant increase in spending.

In-house development | Seventy percent of compa-nies are also increasing their investments in in-house resources for digital advertising—41% saying signif-icantly. Those already heavily reliant on in-house resources are even more likely than average to be among those planning to increase such spending: 82% plan increases; 52% plan significant increases. Other groups more likely than average to be planning to spend more on in-house teams include insurance and healthcare (78%), companies from Europe (65%) and those with sales over $20 billion (60%). Worth noting, CEOs are significantly more likely than CMOs to indicate such a spending increase (60% vs. 24%, respectively).


Big data improves performance. But by no means have the majority of companies fully optimized their collection, analysis and responses to what the data reveals. For example, the survey shows that as currently managed, data issues often plague marketing initiatives. Asked to pinpoint the single biggest data-related obstacle to tracking marketing performance, respondents indicate:

• A lack of integrated systems for managing data (17%)

• Too much data—but not enough timely insight (15%)

• Insufficient comparative data—as analysis is performed on a tactical or campaign level only (15%)

• No way to track ROI (13%)

• Difficulty in connecting marketing spend with activity (6%)

• Difficulty tracking marketing spend (3%)

IMPROVING PERFORMANCE IN DATA STRATEGIES

Figure 9 Summary Table

Agencies Technology partners In-house

Increase significantly 30%1 39%2 41%3

Increase somewhat 33% 38% 29%

No change 27% 20% 23%

Decrease 10% 4% 7%

152% automotive; 48% $10 billion to $19.9 billion; 52% more than $20 billion; 44% banking/finance 275% insurance and healthcare; 62% auto and auto parts; 79% Europe; 65% $5 billion to $9.9 billion; 56% more than $20 billion 378% insurance and healthcare; 65% Europe; 59% CEO (24% CMO); 60% more than $20 billion

According to CMO McGuinness, Chobani is a huge “consumer” of digital, data-intensive services. For example, the company works with groups such as Spire, Nielsen and dunnhumby, “and we enjoy great relationships with external provid-ers,” says McGuinness.

But the company does not “over-rely.” That is, Chobani takes the raw, externally-provided data but performs a significant amount of the analysis in-house—and for two key reasons. First, “we believe we know our brands better than anyone else,” says McGuinness. “We know our brand dynamics, our perceptions of the markets are different, so we do a lot of decision tree and shopper intercepts and work out all the implications and needed actions ourselves.”

But the second driver is simply that from its early days, the company had strong in-house resources and expertise. McGuinness himself was the CEO of the ad agency that won the company’s early business—and digital was a key focus. As he further explains, “When a company is growing so fast, everyone has to roll up their sleeves and get things done, so there’s a lot of experience in-house.” Going forward, McGuinness sees no changes. “It’s pretty laborious. And maybe as we grow, expand into drinks, dips and internationally, maybe we’ll outsource more. But for right now, we’re a high-growth company where we just can’t keep our-selves from being hands on. It’s a labor of love.”


Figure 12 In-house development

Reliance: Mean Heavy Somewhat Not at all CMO CEO Over $20b

Significant increase 41% 52% 37% 7% 24% 59% 60%

Increase 29% 30% 31% 17% 40% 22% 20%

Total 70% 82% 68% 24% 64% 81% 80%

No change 23% 13% 26% 57% 24% 16% 12%

Decrease 4% 3% 6% 3% 8% 1% 0%

Significant decrease 3% 2% 0% 17% 3% 2% 8%

Figure 11 Technology partners

Reliance: Mean Heavy Somewhat Not at all Ins/Health Europe

Significant increase 39% 54% 25% 11% 75% 79%

Increase 38% 32% 49% 11% 23% 18%

Total increase: 72% 86% 74% 22% 98% 97%

No change 20% 12% 23% 53% 3% 3%

Decrease 2% 1% 3% 11% 0% 0%

Significant decrease 2% 1% 0% 16% 0% 0%

Figure 10 Agencies

Reliance: Industry:

Mean Heavy Somewhat Not at all Automotive Banking/fin

Significant increase 30% 44% 17% 5% 52% 44%

Increase 33% 33% 38% 24% 38% 25%

Total increase: 63% 77% 55% 29% 90% 69%

No change 27% 21% 29% 46% 10% 22%

Decrease 7% 3% 14% 5% 0% 8%

Significant decrease 3% 0% 2% 19% 0% 0%


The CEO/CMO partnership Charting a path for marketing in the digital age requires enormous focus and investment. Getting it going—and keeping things moving—requires a close working relationship with peers from the C-suite. In that regard, the CEO/CMO partnership appears to be in excellent health—although it’s the CEOs who per-ceive a significantly stronger bond.

Specifically, the survey shows that 99% of CEOs describe their relationship with their CMO as either excellent (67%) or good (32%). The excellent rating climbs to 78% for U.S. companies—and 96% for those from Europe—while declining to 46% for Asia/Pacific.

Worth noting, the excellent rating climbs to 81% among CEOs who agree strongly that their companies “know” big data. It climbs even higher, to 84%, among CEOs whose companies are seen to be wasting money

on marketing initiatives. It also remains at a relatively high 78% among those who agree strongly that their companies do not know who likes or dislikes their prod-ucts. Both findings seem to indicate a high degree of empathy and/or understanding on the part of the CEO.

On the flipside, though 92% of CMOs perceive a good-to-excellent relationship with the CEO, the excel-lent figure falls significantly to only 54%. However, it again rises to 76% among companies that “know” big data.

But even if they feel less of a bond with their CEO, 79% of CMOs say they believe they have the finan-cial support to run their organizations effectively. Nonetheless, 84% of CMOs say they feel pressure to cut back on branding initiatives: 15% feel such pressure “always”; 26% “most of the time; 43% “sometimes.” A noteworthy exception is Asia/Pacific, where the figures are reversed: 24% say rarely (14%) or never (10%), 67% say “sometimes,” and only 10% say most of the time. The takeaway: Asia/Pacific CMOs appear to have the financial backing to build their brands.

Figure 13 Where are CMOs today pulling data?

Those who “know” big data are more likely to pull more data from more sources

82% 90%

73%56%

88%77%

74% 88%

65% 90%

79% 78%

90%75%

27% 44%

Web search

Point of sale

Digital advertising

CRM

Mobile behavior

Email

Online behavior

GPS

Mean

“Know” big data


What are the key strategic challenges for your company—and for you as a CMO? My journey as a CMO is not so different from the course for VMware on the whole. We built our virtualization business solidly to support the work of IT practitioners—in particular the ones who manage server farms. Now we are transitioning from being a virtualization company to a provider of a broad range of cloud infrastructure and mobile offerings. We haven’t forgotten about the IT practitioner who manages servers, now we’re looking at networking, storage, the cloud and mobility—these things go way beyond that IT practitioner, and are important topics across the C-suite. For me, there are audience implications. Who do we engage with? What kind of relationship should we pursue? Also, it’s about communication, and about changing the perception of who we are and what our business is about.

So what are you working on? I love the analogy between marketing and IT. We both have just so many resources. But how much do we devote to just keeping the lights on, versus where can I invest in innovation? That’s always the tradeoff.

A big one right now is trying to create really tight integration across our marketing activities, including breaking down the silos in our go-to-market strategy. We have so many campaigns and funnels. Awareness campaigns, public relations for thought leadership, demand genera-tion. We also have a large number of events and webinars. We build our marketing activi-ties to address concerns our customers face, such as, “how can we help our customers in an increasingly hybrid—in-house and outsourced—IT environment?” What I’m trying to do is get everyone working together to improve focus, collaboration and effectiveness.

Another focus, we have tens of thousands of partners in our ecosystem. What we see is that 20% of those drive a majority of our sales. To address this, we have developed a program designed for the other 80%, who may not be as marketing-savvy, called Value Velocity. Here, our partners can leverage our marketing know-how through a template-based collection of marketing campaign assets—offers, promotions, scripts—where, with a little bit of personal-ization, almost all a partner has to do is aim and push “start.” We have many who know us but typically do only one transaction a year. Where applied, we’re tripling that.

What are you doing with big data? As our business becomes a more complex portfolio of products, services and solutions, we need a much richer segmentation of our data. We have to understand multiple buyer personas across different segments, all with different needs. It’s critical that we get more sophisticated in how we use data.

ROBIN MATLOCK, CMO, VMWARE

QU

ES

TIO

NS

5with


As our company evolves, the whole engagement with our customers is beginning to change. This means marketing is using data in new ways. In our early days, there was more often a long, complex sales cycle, and at the end you landed a big deal.

In today’s cloud and mobility-focused world, it’s a ser-vices model with a series of smaller transactions where you pick up just a little real estate at a time. It’s a very dif-ferent engagement model, and to be successful you have to be data driven. We have a combination of rich analytics and really sophisticated databases that keep us confident in selling our powerful lineup of solutions.

What about digital marketing? We look at digital holistically. It’s not in silos. It’s not a web presence and then a social presence and a couple of other channels: it’s a holistic engagement with our customers, partners and prospects.

We also look at the buyer journey: how well does our digi-tal engagement align to each customer’s lifecycle? It’s not one size fits all, so all of our digital interactions and touch

points are tailored to their point in their journey. Which also means, you have to be more aware of who is engaging you. The more you know about your prospects and customers, the more you can do to keep the experience relevant.

Finally, it’s content. It’s critical with digital marketing to be very specific about providing the right content at the right points. What might work on a website is different from what works in a social channel. We also work to find ways to get our communities motivated to participate and cre-ate content, so it’s not just VMware pushing it out, there’s more user-generated content.

Any final words? Overall, it is important to understand that big data is a means to an end, not the end itself. We never just sit behind the data; we engage with our customers so they view us as a trusted partner. We’re driving a dialogue and an engage-ment. The focus is on what’s best for our customers.

“In today’s cloud and mobility-focused world, it’s a services model with a series of smaller transactions where you pick up just a little real estate at a time.”


CONCLUSIONCurrent efforts may be yielding satisfactory results. But as

the survey indicates—and as companies such as Chobani,

Unilever, VMware and UnitedHealthcare Group demon-

strate—enterprises are capable of so much more.

The lever is data. Certainly, companies should be thinking

about ways to obtain more data. But as those who “know”

big data demonstrate, the value is not in its collection, but

rather, in mining data to reveal key insights that in turn can

drive specific actions to create value.

Pioneers, those already in the know, may have a significant

head start. But they are also blazing a trail for others to

follow. It is in this regard that we offer the above report.

ABOUT FORBES INSIGHTSForbes Insights is the strategic research and thought leadership practice of Forbes Media, publisher of Forbes magazine and Forbes.com, whose combined media properties reach nearly 50 million business decision makers worldwide on a monthly basis. Taking advantage of a proprietary database of senior-level executives in the Forbes community, Forbes Insights conducts research on a host of topics of interest to C-level executives, senior marketing professionals, small business owners and those who aspire to positions of leadership, as well as providing deep insights into issues and trends surrounding wealth creation and wealth management.

Bruce Rogers CHIEF INSIGHTS OFFICER

Brenna Sniderman SENIOR DIRECTOR

Hugo S. Moreno EDITORIAL DIRECTOR

Brian McLeod COMMERCIAL DIRECTOR

Matthew Muszala MANAGER

Lawrence Bowden MANAGER, EMEA

William Millar REPORT AUTHOR

Kari Pagnano DESIGNER

60 Fifth Avenue, New York, NY 10011 | 212.366.8890 | www.forbes.com/forbesinsights

data-driven insights are only part of the...

Documents