CMO And CIO Uniting As Service Partners Find Their Role Says IBM’s Yuchun Lee

Yuchun LeeLast week, IBM released the results of its “State of Marketing 2012″ (on Slideshare) survey. The results dovetail with IBM’s own technology plans as it relates to marketing and media as the press release revealed: “The new survey of the marketing industry finds that chief marketing officers (CMO) and chief information officers (CIO) must join forces in order to connect with today’s consumer across new channels including mobile devices and social networks. Fully 60 percent of marketers point to their lack of alignment with the company’s IT department as the biggest obstacle to reaching today’s consumers.” Read more.

Yuchun Lee, VP and GM of IBM’s Enterprise Marketing Management Group, discussed the fruits of his company’s survey and industry trends with AdExchanger.

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AdExchanger: What is IBM’s CMO/CIO initiative?

YUCHUN LEE:  It is something that’s been in the works for over a year within IBM.  In fact, when I joined IBM there was, internally, a CMO initiative being worked on.  But, a couple of weeks ago was the  first time IBM – through our CEO – launched a program to help educate the market and also form a community around the combination of the Chief Marketing Officer and Chief Information Officer. They are two key executives who will drive some of the needed transformation in the market going forward.

This is based on a lot of quantitative research and experience in the market where we think that the changing world of marketing and how consumers interact with companies, is forcing companies to make a fundamental shift towards much higher-level customer-centricity which leverages technology.  The CIO role is now more important than ever. A CIO can’t stay in the back office anymore. They have to think about their role in the front office.

Likewise, the CMO’s role is expanding from an advertising-centric type of job description to one that needs to be a full owner of the brand of the company, which includes teaming up with the CIO to provide what we call “system engagement” to the client. The CMO must be the executive in charge of managing a consistent customer experience and also deal with the impact on the brand from social media, for example.  It’s a much broader role for the CMO [these days].  The idea in thesis is around the CMO partnering with the CIO to make that possible

Are you saying that the CIO is getting more into a strategic role in marketing?

The CIO has to leverage technology and help the CMO succeed in his or her job.  The two together need to have a unified strategy around how a company will communicate and serve the customer in the future.  In order to do that, you have to do it across channels, and make sure that that the experience is in line with the brand of the company.  There is technology involved to do that.  The CMO can’t do it by themselves, so they have to team up with the CIO’s.

So, in your view, where does their strategic responsibility end for the CMO and where does it pick up with the CIO?

To begin, we [IBM] must share our experience with the market as we have seen CMO’s try to work around CIO’s, and the vast majority of them are not successful in the long run. I can’t even think of one that’s successful, to be honest. The reason is, if you think about what needs to happen in this next stage of engagement with the customer, we’re talking about a full understanding of the customer – and this requires a lot of technologies

CMO’s appear to move around CIOs for very good reasons, because the CIO is still stuck in the back office. They’re doing their SAP implementation for five years and they don’t have bandwidth to help the CMO. The only thing the CMO can do is to rely on other partners externally to get their job done. By moving around the CIO’s, over time what you end up with is a total mess. You get 50 different applications from different silo vendors and nothing makes sense.

Our goal is to retrench back and look at companies that are successful, that require an enlightened CIO who knows that the needs of marketing are very different than the traditional back office needs. Marketers need something much more agile, overall, and much more scalable in a certain set of dimensions. They have to understand the problem set, basically.

Back to your question about a partnership and the point of intersection of the two roles… so the CMO has a lot of other jobs related to branding, advertising and everything else, and also the job of helping the CEO make sure that the brand of the company, the corporate promise of the company is aligned with the experience of customers. With all of that, I think the CIO can be less involved. Where the CIO and CMO meet is this thing we call the system of engagement.

You can think of a system of engagement as a platform where at the very bottom is a set of instrumentation that needs to happen in an organization, where you collect data. On top of that is data which you collected from the instrumentation you manage. Above that is a set of analytics to analyze the data and get inside some predictions and so on. Above the analytics is the decision management tool, and then above that is a set of cross-channel execution communication tools.

If you look at the entire stack, there’s a lot of technology involved, and the CMO needs help from the CIO for that.

What do agency partners and service layers look like in a world with the CMO/CIO partnerships?

There are three types of partners that a CMO typically deals with.

One is the agencies – and there’s no technology that can substitute for creativity and innovation. A lot of times an organization needs strong agency help for the creative aspect of their business and also for brand alignment and strategy, so that part will be there for sure.

There’s another [service] partnership around MSP, marketing service providers. These are partners that augment the internal IT organization for data management, for campaign management, various other types of technologies.   Think Axiom, Harhanks, Epsilon, Experian, Merkel, etc.

The third group is – I wouldn’t say system integrators – more like strategic marketing partners, who can come in and help an organization with not just technology but with a process change around it, and even an organizational change. These are more change management, business reengineering types of services.

And then, sometimes the marketer may decide, “You know what, I’m never going to solve this, I’m going to outsource the entire thing. They may have a business process outsourcing partner as well.”

So, of those three service layers, which one is the big growth opportunity in your opinion?

All of the service area will grow.  The agency area will probably shift to more digitally-oriented content.  The good thing about digitally-oriented content is that the pace is much faster.  Even though each ad and video on the web is lower cost than a television ad, you’re going to do 100 times more of it.  As personalization takes hold in marketing – we think the future of business is hyper-relevancy –  the only way you can deliver relevant content is if you can personalize on a massive scale.  As you personalize the content and communication, you’re going to need a higher level of creative services.  And, you’re going to need technology to make that happen.

You’re also going to need the organizational culture change processes to support a level of agility that most companies can’t deal with today.  Again, the journey requires that all these pieces work together, not just software or hardware from IBM, but also services from IBM and our partners and everybody else.  It’s a journey.

Another hot topic for the CMO and CIO today is Social CRM.  Recent acquisitions have shown a new light on the trend.  How does the confluence of social and CRM make sense?

First, holistically, you should see CRM as the technology that’s aimed at what is called “owned media.”  These are channels of communication to the customer through which you have a direct line of sight -whether it’s through an email, an ad on a website, or through a direct mail or billing system, you know who the customers  are when you engage with them.  Those are traditional CRM sets.

Then, you have advertising, either online or offline.  Of course, that’s what is known as “paid media.”  The last bit is the “earned media” piece – the social area. As more eyeballs shift to the social area, as more brands are being discussed and recommended in that area, the company’s ability to be able to coordinate and generate earned media is part-and-parcel of the overall marketing strategy.

A lot of these acquisitions are aiming at two areas.  One is in sentiment analysis. In other words, you need to understand what your brand sounds like in these discussions from a macro scale, whether they’re positive or negative, and how you compare to your competitor.

The second area has to do with using the social channel as a form of owned media, where – if you sign yourself up to be a friend of mine on Facebook, I have a direct connection through my Facebook page to communicate with you as a client.  That’s the nature of social engagement right now –  sentiment analysis and the direct line of owned media communication.   We think there is more to it. Our strategy encompasses all those pieces and additional components as well.

So, how does IBM cover social CRM, and in particular, the earned media channel?

We do several things.  We have technology that does sentiment analysis already through our customer insights product from our business analytics group.  We go a step further than just analyzing – our Enterprise Marketing Management solution allows you to already run social campaigns through Twitter, Facebook, and the major social networks.  And, we’ll go beyond that.

Because we own all these pieces, we are able to link social discussions and individual influencer and the referral traffic from those influencers into your site and not just think about which link they come from, but link it all the way down to their actual post-click behavior.  Meaning, if somebody comes in, traffic is one thing; but do they actually make purchases and what do they look at? What’s their surfing behavior like?  We make that entire linkage for our clients.  That’s something you can’t do unless you own all the pieces.

By John Ebbert

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