The average tenure for CMOs fell to 40 months in 2020, the shortest it has been since 2009 (Spencer Stuart). There are many contributing factors to this, but whichever one you choose to focus on, it places additional pressure on CMOs to perform in the very short-term. Understandably then, for many CMOs, the focus becomes concentrated on immediate tactical actions – and then the key question becomes: who is still looking out for the long term? CMOs need to be able to respond today, while keeping a clear (and proportionate) focus on tomorrow.
Ronaldo’s rejection of the sponsor’s drink
This issue was brought into focus last month by the furore surrounding Cristiano Ronaldo’s rejection of the sponsor’s drink in favour of water at a Euro 2020 press conference. The alleged $4b that was wiped from the value of Coca Cola in consequence of his actions was widely reported upon. I loved Mark Ritson’s take on this topic (in Marketing Week on 23rd June), which was an interesting read, confirming that the loss was not related to Ronaldo’s actions, but to the rise and fall of share price dynamics happening every day (and as reported by Forbes, the share price for Coke actually went up $1.3bn shortly after Ronaldo’s actions!) This is a very nuanced topic, and Ritson ends with the following quote:
“What we really learned last week is what a total fucking zoo the marketing world has become. Black battles with white. Upside can also be downside. Cold can run with hot… everybody has a take these days and it tells you more about them than the thing they are talking about.”
What this shows so clearly to me is when everything can turn on a sixpence (customer sentiment can be so fickle, driven by social amplification, and competition both fleeting and omnipresent) you need the agility to respond appropriately, fast, but also the ability to balance the short term effects that these unplanned and seemingly stratospheric changes can have, with the long term view you need to have for your business.
Short-term storm, or long-term damage?
In December 2019, Peloton, the connected-fitness start-up, faced a social-media backlash over a holiday advertisement. "The Gift That Gives Back" featured a young woman receiving a Peloton bike for Christmas and then filming herself exercising on it over the next year. The ad had more than four million views and over 15,000 dislikes on YouTube, and was panned as sexist, tone-deaf and dystopian (Business Insider). In three days, Peloton saw $1.5bn (15%) wiped from their market value.
Three weeks later, this gap had closed, and of course, after the boost from the pandemic, the business is today valued at $36bn!
As was the case with Ronaldo, what seemed to be cataclysmic on the day was a storm in the proverbial long-term teacup.
The renowned investor, Warren Buffett, has a famous quote (often ascribed to Benjamin Graham) regarding the stock market, which seems appropriate to this situation:
“In the short run the stock market acts like a “voting machine” (reflecting all kinds of irrational attitudes and expectations), while functioning in the long run more like a “weighing machine” (reflecting a firm’s true value).”
It’s the long-term strength of a company that matters
Ronaldo’s actions allowed people to effectively vote on what they think of Coke in the short-term; but It’s the long-term weight of the company that really matters, and in the long run, Coca-Cola is a solid and strong brand. To address the ongoing shifting perspectives towards sugar in its drinks, it continues to focus on reducing sugar in its drinks, and diversifying its portfolio into waters, teas, coffees and other beverages. These short-term ‘voting effects’ are dangerous in the disproportionate effects they can have on businesses, but they need to be seen in the context of the long term, which the CMO needs to keep clearly in focus.
This is also peripherally related to a famous Martin Sorrel quote in 2002, after the media recession. Things started to look a little better, and he was asked in an interview if he thought the media recession was over. He said:
“It is a corrugated bath and we are at the top of one of the corrugations!”
A modern-day CMO has to keep a clear focus on the long term and on thinking beyond what’s immediately in front of them. To see the signal through the noise. To be sure to see both the wood and the trees. As marketers, we are called to balance the panic of being in the bottom of a short-term corrugation with the confidence that we have the long-term game plan in hand.
CMOs must be empowered to act with the long-term plan in mind
More than ever, CMOs must be equipped with the agility, adaptiveness, and customer focus to take short term actions (or not) in the context of the longer-term plan and see these as totally connected. We need to balance this focus on the short-term for the CMO, with laying appropriate foundations for long game. No matter the reduction in CMOs’ average tenure, CEOs and the wider organisation must give their CMO the space to prioritise with the long-term vision in mind to truly enable them and the business to flourish.