IBM Global CMO Study Finding Presentation

Insights from the
Global Chief Marketing
Officer Study (ASEAN)

ASEAN
Point of View

IBM Institute for Business Value

The 2011 Global CMO Study is part of our C-suite Study series
encompassing interviews with more than 15,000 C-suite executives

’04-’05 ’06-’07 ’08-’09 ’10-’11

CEO

CIO

CFO

CHRO

CSCO

CMO

2 © 2011 IBM Corporation


In this largest sample of face-to-face CMO interviews, we spoke with
more than 1,700 CMOs

The study represents organizations in
64 countries and 19 industries

Sectors Regions
3%
Public
16% 17%
Communications North America
21% 44%
Industrial Growth markets

36%
24% Distribution 35%
Financial Services Europe
4%
ASEAN 4%
Japan

Growth Markets include Latin America, non-EU Eastern Europe, Middle East and Africa and Asia Pacific (excluding Japan); n=1734



Agenda

Introduction – Swimming, treading water or drowning?
Deliver value to empowered customers
– Move from market analysis to understanding individuals
– Take charge of growing volume, velocity and variety of data

Foster lasting connections
– Focus on the relationship, not just the transaction
– Invest in building your corporate character

Capture value, measure results
– Demonstrate accountability through ROI
– Recognize shift towards new skills and capabilities

The CMO Agenda – Get fit for the future
“The perfect solution is to serve each consumer
individually. The problem? There are 7 billion of them.”
Consumer products CMO, Singapore



CMOs feel unprepared for the amount of complexity they face

Expected level of complexity and preparedness to handle
Percent of CMOs responding

79%
Expect high/very high
level of complexity
over 5 years

48% 31%
complexity
Feel prepared for gap
expected complexity

Source: Q4 How much complexity will your organization have to master over the next 3 to 5 years compared to today? n=1709; Q6 How prepared do you feel for the expected
complexity ahead? n=1712


Data explosion, Social Media, Growth of Channel Device Choices
and Shifting Demographics present the biggest challenge for CMOs

Underpreparedness
Percent of CMOs reporting underpreparedness

Global 50% ASEAN

Data explosion 71% 56%
Social media 68% 64%
Channel and device choices 65% 48%
Shifting consumer demographics 63% 52%
Financial constraints 59% 81%
Decreasing brand loyalty 57% 53%
Emerging market opportunities 56% 55%
ROI accountability 56% 46%
Customer collaboration and influence 56% 54%
Privacy considerations 55% 50%
Global outsourcing 54% 57%
Regulatory considerations 50% 30%
Corporate transparency 47% 18%

Source: Q8 How prepared are you to manage the impact of the top 5 market factors that will have the most impact on your marketing organization over the next 3 to 5 years?
n=4 to 46 (n = number of respondents who selected the factor as important)


… particularly those with the biggest impact

Marketing Priority Matrix
Under-
preparedness
70

60

50

Factors
impacting
40
marketing
0 20 40 60 Mean




1 Data explosion
Under- 2 Social media
preparedness 1 3 Growth of channel and device choices
70
2
4 Shifting consumer demographics
3

4
60

50

Factors
impacting
40
marketing
0 20 40 60 Mean




1 Data explosion
Under- 2 Social media
preparedness 1 3 Growth of channel and device choices
70
2
4 Shifting consumer demographics
3
5 Financial constraints
4 6 Decreasing brand loyalty
60
5 7 Growth market opportunities
6
10 7 9
8 ROI accountability
8
11
9 Customer collaboration and influence
50 12 10 Privacy considerations
13
11 Global outsourcing
Factors
impacting 12 Regulatory considerations
40
marketing 13 Corporate transparency
0 20 40 60 Mean



To deal with the broad level of underpreparedness, CMOs signaled
three key domains of improvement

Deliver value to
empowered Capture value,
customers measure results

Foster lasting
connections

“Changes do occur but not right away, in phases..”
Banking SVP head marketing & brand awareness, Indonesia



Agenda







Markets–not individuals–still shape CMOs' strategy

Market research 82% 50%
Corporate strategy 81%
Competitive benchmarking 80%
Customer analytics 74%
Marketing team analysis 69%

7 other sources

Consumer reviews 48%
Third-party rankings 42%
Retail and shopper analysis 41%
Online communications 40%
Professional journals 37%
Key sources to
Blogs 26% understand individuals



CMOs are overwhelmingly underprepared for the data explosion and
recognize need to invest in and integrate technology and analytics

Global
Underpreparedness
Percent of CMOs selecting as “Top 5 Factors” Need for change to deal with data explosion
Percent of CMOs indicating high/significant need
Data explosion 71%
Social media 68% Invest in
73%
technology
Channel & device choices 65%
Integrate
Shifting demographics 63% 69%
insights
Financial constraints 59%
Understand
65%
Decreasing brand loyalty 57% analytics

Emerging markets 56% Rethink
64%
skill mix
ROI accountability 56%
Collaborate
Customer collaboration 56% 52%
with peers
Privacy considerations 55%
Validate
49%
Global outsourcing 54% ROI

Regulatory considerations 50% Address
28%
privacy
Corporate transparency 47%
Source: Q8 How prepared are you to manage the impact of the top 5 market factors that will have the most impact on your marketing organization over the next 3 to 5 years?
n=149 to 1141; Q20 To what extent will the opportunity to collect unprecedented amounts of data require you to change? n=1629 to 1673


Majority of CMOs are eager to deploy tools and technologies
to grapple with growing volume, velocity and variety of data

Plans to increase the use of technology
Percent of CMOs selecting technologies

Global ASEAN

Social media 82% 83%
Customer analytics 81% 93%
CRM 81% 89%
Mobile applications 80% 85%
Content management 73% 82%
Tablet applications 72% 70%
Single view of customer 70% 80%
Collaboration tools 68% 80%
Predictive analytics 66% 82%
Reputation management 63% 72%
Search engine optimization 62% 70%
Campaign management 61% 74%
Score cards/dashboards 56% 79%
E-mail marketing 46% 49%
Source: Q22 Do you plan to decrease or increase the use of the following technologies over the next 3 to 5 years? n=1616 to 1671



What’s inhibiting them? Building the business case, IT-marketing
alignment/integration issues and marketing technology skills

ASEAN
Barriers to using technology in marketing
Top 5 selected by CMOs
Lack of marketing and IT alignment 66%
Cost 63%

Lack of ROI certainty 61%

Lack of IT integration with organization 61%

Lack of skills of (potential) users 50%

Lack of technological ownership in marketing 40%
Business case
Tool implementation issues 36%
IT related
Lack of IT Skills 30%
Marketing related
Reliability 23% IT and marketing related
Ease of use 20% Usability

Source: Q23 What are the top 5 barriers to using technology? n=70



Recommendations and tough questions – Deliver value to
empowered customers

Begin with the big business question.
How are you gearing your marketing
Focus on the opportunity to create value
people, programs and processes to
for customers as individuals.
understand individuals not just markets?

Open the aperture.
Reprioritize your investments to mine
digital channels, such as blogs, tweets,
social networks, peer reviews and Which tools and processes are you
consumer-generated content, to access investing in to better understand and
customers’ honest, unmediated views, respond to what individual customers
values and expectations. Use advanced are saying and doing?
analytics to recognize preferences, trends
and patterns across every touch point.

Safeguard data.
Work with IT to assess potential data and How do you safeguard your customers'
infrastructure exposures, employ tools to data and privacy in a multi-channel,
secure customer data and update privacy multi-device world?
policies to address customers’ concerns.



Agenda







Enhancing customer loyalty is the top digital priority
ASEAN

Enhance customer loyalty/advocacy 67% 83%

Deploy tablet/mobile apps 57% 70%

Use social media to engage customers 56% 49%

Use customer management software 56% 80%

Monitor the brand via social media 51% 80%

Measure ROI of digital technologies 47% 82%

Analyze online/offline transactions 45% 72%

Develop social media policies 37% 70%

Monetize social media 29% 74%

Increase supply chain visibility 24% 79%

© 2011 IBM Corporation


CMOs still focused on transactions, not relationships

ASEAN
Segmentation/targeting 61% 70%

Awareness/education 46% 58%

Interest/desire 45% 59%

Action/buy 54% 59%

Use/enjoy 41% 52%

Bond/advocate 40% 41%

Transaction focused Relationship focused



CMOs still focused on transactions, not relationships

Segmentation/targeting 61%

Awareness/education 46%

Interest/desire 45%

Action/buy 54% Missed
opportunity
Use/enjoy 41%

Bond/advocate 40%

Transaction focused Relationship focused



Customers have clear expectations based on the corporate
character, yet employees are not fully on board

ASEAN
Is your corporate character understood in the marketplace?

25% 43%
say no or limited say understood and
understanding of (strong) contributor to
corporate character brand success
4% 21% 32% 23% 20%

Not understood Strong contributor to the brand’s success

Is much more work needed to get employees on board?

64% 16%
say no or very
say significant or limited work
much work needed needed

28% 36% 20% 13% 3%
Significant work needed No work needed
Source: Q10 Is your corporate character understood in the marketplace? n=70; Q11 How much work is needed to have employees embrace and live the corporate character?
n=70


Practicing corporate transparency helps organizations improve
customer engagement and use customer data in an insightful way

ASEAN
Top 5 initiatives driven by transparency
Percent of CMOs selecting initiatives

50%
Enhance engagement with
customers and citizens 81%

Expand data collection, analysis
and insights capabilities 81%

Manage brand reputation within
and beyond the company
78%

Define and Activate Corporate
Character
72%

Orchestrate a single view
of the brand
65%

Source: Q9 To what extent does transparency create a need for you to: n=66 to 68



Recommendations and tough questions – Foster lasting connections

Jumpstart relationships.
Capitalize on new digital channels to
How do your marketing tactics and
stimulate conversations with existing and
investments work in sync to create and
potential customers, and create new
grow a pervasive and innovative total
types of relationships to reveal untapped
customer relationship?
opportunities. Use tangible incentives to
attract followers.

Connect continuously. What steps are you taking to connect
Engage with your customers and citizens customer insights with product and
at every stage in the customer lifecycle, service development, and stimulate
and build online and offline communities your customers to become brand or
to strengthen your brand. company advocates?

Champion your organization’s
corporate character. How are you collaborating with your
Help the enterprise define and activate the C-level peers to activate your
traits that make it unique. Work with the “corporate character” across all touch
entire C-suite to meld the internal and points and experiences?
external faces of the enterprise.



Agenda







By 2015, ROI will be the leading measure of success

ASEAN
Marketing ROI 63% 59%

Customer experience 58% 56%

Conversion rate/new customers 48% 54%

Overall sales 45% 51%

Marketing-influenced sales 42% 51%

Revenue per customer 42% 40%

Social media metrics 38% 37%



CMOs should exert significant influence across four Ps, not just
promotion, for organizational success

ASEAN
Percent of CMOs citing significant influence
Integrated advertising and promotion 85%

Promotion Aligned internal and external communications 87%
Innovative social and other emerging media 70%

Deeply researching customer needs 70%
Products Product service portfolio 64%
Comprehensive research and development cycle 64%

Customer experience involving multiple touch points 65%

Place Channel selection and management 52%
End-to-end supply chain process 52%

Full competitive pricing assessment 65%

Price Understanding of total ownership costs/benefits 62%
Integrated, cross-company pricing process 52%

Source: Q14 How much influence do you and your organization have over the “Four Ps” and their related sub-factors? n=63 to 67



To gain influence, CMOs need to introduce new skills into
marketing's mix; many plan to tap external expertise
CMOs’ use of external partnerships
Global ASEAN

Sales /lead management 7% 100% 300%

Customer and data analytics 12% 92% 90%

Direct/relationship marketing 13% 77% 146%

IT skills 23% 61% 35%

Call and service center 22% 59% 218%

Tracking/measurement 13% 54% 156%

Event management 28% 50% 53%

Online communities 22% 50% 64%

Percent of CMOs using partners extensively today
Percent increase of partnerships in 3-5 years
Source: Q16 What do you do within marketing and what resources will you tap into, to manage marketing today and going forward? (in 3 to 5 years)
n (Today) = 1440 to 1668 n (in 3-5 years) = 1481 to 1636


Recommendations and tough questions – Capture value,
measure results

Capitalize on new tools to measure How are you measuring and
what matters. analyzing the results of your
Use advanced analytics and initiatives and communicating them
compelling metrics to improve to advance your marketing function’s
decision making and to demonstrate credibility and accountability?
your accountability.

Enhance business acumen. What are you doing to enrich the
Adjust your talent mix to increase skills mix in the marketing function
technical and financial skills, and grow and build technical, financial and
your digital expertise by finding new digital acumen?
partners to supplement your in-house
resources.

Lead by example. In what ways are you personally
Expand your horizons by enhancing your investing to broaden your capabilities?
personal financial, technical and digital
savviness.



Agenda




“Marketing is a balanced combination of art and
science. A good approach blends human creativity
and logical thinking based on the data insights
technology offers.”
Consumer products marketing director, Vietnam



In addition to strategic actions, there are three initiatives CMOs can
start today to become better prepared for the digital era

Create small action teams
1 Establish a short-term task force for each imperative to develop recommendations for improvements
Invite eager marketing futurists from your organization to participate
Break challenges in chunks to address the big picture, details and dependencies
Identify opportunities for small wins and boost support for more radical initiatives

Schedule time with your C-suite peers
2 Be proactive with collaboration
CIO: Discuss improvements for marketing technologies and tools
CFO: Explore financial implications and accountability
CHRO: Consider how to empower employees to better represent your corporate character

Engage like a customer
3 Live your customers’ experience with your brand. What does it feel like to be a segment of “one”?
Drop in on stores and sites
Visit your call center, sit in with representatives, or remotely access randomly recorded calls
Join the customer conversation via social media



Moving from Stretched to Strengthened

Deliver value to Foster lasting Capture value,
empowered customers connections measure results
Focus on creating value for Capitalize on new digital Use advanced analytics and
customers as individuals channels to stimulate customer compelling metrics to improve
conversations and new decision making and to
Reprioritize investments to relationships; use tangible demonstrate accountability
mine digital channels to access incentives to attract followers
customers’ views and use Adjust your talent mix to
advanced analytics to Engage with customers increase technical and financial
recognize preferences and throughout the customer skills, and grow digital expertise
trends across every touch point lifecycle; build online/offline by finding new partners to
communities to strengthen supplement in-house resources
Work with IT to assess your brand
potential data and infrastructure Expand your horizons by
exposures, employ tools to Help the enterprise define and enhancing your personal
secure customer data and activate traits that make it financial, technical and
update privacy policies to unique and engage the C-suite digital savviness
address customers’ concerns to meld the internal and external
faces of the enterprise



Through these in-depth discussions, we are better able to
understand the evolving role and function of the CMO in the C-suite

Global
Scope Approach Analysis

Sample consists of private sector Face-to-face one hour Statistical analysis of 35
CMOs (97%) and public sector interviews with 1,734 CMOs questions and the related 236
leaders (3%) discrete factors
Facilitated using structured
Representative sample across questionnaire In-depth analysis based on
64 nations and 19 industries self-reported performance
Wide coverage: from highly characteristics for differences
Private sector organizations profiled organizations (48 of between “outperformers” and
with revenue more than US$500 the 100 top Interbrand “underperformers”
million in mature markets and organizations) to lower profile
more than US$250 million in local organizations Comprehensive review and
growth markets; public sector analysis of more than 10,000
organizations with more than interview quotes
1,000 employees

Marketing in the Digital Era
Note: Outperformers and underperformers were identified by answers to questions about their organization’s competitive position. Those who selected “significantly outperform industry
peers” were identified as outperformers; those who selected “somewhat or significantly underperform industry peers” were grouped as underperformers.


CMOs: swimming, treading water or drowning?

In this digital era... CMOs have to...

Globalization has brought the world to Do more than ever, inside and outside
everyone’s backyard the organization
Everyone is a broadcaster, publisher and Be more accountable for return on
a critic: there is nowhere to hide investment (ROI)
Transparency is the new price of entry Use tools and technologies that their
children understand better than they do

And... And...
more data, more sources, CMOs have just three to four years
less clarity to make their mark

“Fairly significant change across all areas is needed.”
Consumer products SVP marketing operations, Asia, Africa, Central & Eastern Europe, Singapore



ASEAN CMO Study key findings

ASEAN CMOs underline the importance of getting closer to customer and being focused on
improving customer experience to be successful in the future

Understanding the market and competition ranks as one of their other key priorities

ASEAN CMOs are focused on using social media as a key engagement channel, leveraging
data analytics and on improving tools and methods to calculate the ROI of Marketing
activities

Promotion heavily outnumbers all other influencing factors

The majority of the CMOs expressed their unpreparedness on account of financial
constraints, and the lack of alignment of marketing and IT in their organisation



CMOs also can expand their personal influence by shifting to new
capabilities that focus on technology, social media and ROI
Capabilities for personal success over next 3-5 years
Percent of CMOs selecting capabilities

Global ASEAN

Leadership abilities 65% 56%

Voice of the customer insights 63% 61%

Creative thinking 60% 47%

Cross-CxO collaboration 49% 31%

Competitive trends insights 45% 47%

Analytics aptitude 45% 41%

Management capabilities 31% 37%

Understanding products/services value chain 30% 26%

Demand creation capabilities 30% 39%
Technology savviness 28% 39%
Social media expertise 25% 29%
Finance skills 16% 23%
Source: Q17 What capabilities do you need to be personally successful over the next 3 to 5 years? n=1733


IBM Global CMO Study Finding Presentation

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