WHAT’S ON THE AGENDA? · largest CMO research to-date. Collaboratively, we interviewed 25 CMOs and leading marketers from varying industries in different phases of their digital

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WHAT’S ON THE

AGENDA?THE KEY AGENDA TOPICS FOR CMOs

IN THIS DIGITAL AGEThe Netherlands 2019

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T he following report, created through the mutual efforts

of IAB The Netherlands and Deloitte, takes an in-depth

look at the challenges and opportunities CMOs in today’s

sophisticated and data-driven world face. This 2019-edition is our

largest CMO research to-date.

Collaboratively, we interviewed 25 CMOs and leading marketers

from varying industries in different phases of their digital

transformation. These interviews took us into the past, our current

state and vision for the future - especially for the next three years

on matters such as media-buying, data & technology, KPI’s,

innovation and creativity. Together, these interviews provided

us with overarching themes which we then clustered into today’s

10 most important agenda items for CMOs, including:

For the third year in a row, we proudly present you with a unique set of insights garnered from Dutch Chief Marketing Officers (CMOs), and their top priorities for this digital age.

WHAT’S ON THE CMO AGENDA? ‘19

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The new marketing reality and the evolving role of the CMO

The quantity vs quality challenge: to focus on collecting more data or extracting better insights?

A year after GDPR and the shift towards ethics

How to include more service innovation (as the next phase of product innovation) in the full customer journey

Proving the effect of marketing spend

The KPI challenge: how to create synergies, a common understanding and one language

Customer centricity as the focus of the customer journey

The shift towards in-housing: obtain first-party data ownership and direct access to media buying tools

The continually changing role of media agencies

The need for creativity in the abundance of data and technologies

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Contained within this report, you will find an overview of each key theme and our main takeaways.

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SETTING THE


THE NEW MARKETING REALITY AND THE EVOLVING ROLE OF THE CMO

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To keep up with today’s fast-paced digital world, new ways of working are required. Of course, this impacts a wide-range of organizational aspects, of which the most pressing and relevant are highlighted below:

Does the word ‘digital’ still exist?

D espite the fact that we all know and acknowledge that

‘digital’ is now the standard, the word is still used to

uniquely distinguish jobs, departments and the media-

buying process. While we envision an integrated marketing world,

the reality is that digital and non-digital still exist as two distinct

entities.

In defining their strategy, most CMOs think ‘digital’ since everything

today is increasingly digitized and automated. However, in the

execution, the distinction between digital and offline is still made

because it concerns different disciplines which require different

and unique skillsets. An important role of the CMO is to, therefore,

stand above all, so to speak, the different disciplines and serve as

a connector between them.

During our interviews, we saw an increasing shift towards

digital advertising, which might be seen as logical considering

consumers’ evolving media consumption behaviors. For example,

amongst millennials, there is a decrease in linear TV intake while

an increase in online watching through streaming platforms.

Nevertheless, the majority of CMOs do not expect TV or radio

to completely fade away, making a cross-media approach the

on-going best way to reach customers.

“ Marketing must be marketing; and not digital or non-digital. This means marketing should focus on questions such as: where is the customer going, how can we best approach them and how we can be visible and relevant as a brand.” Jeremiah Albinus, fonQ


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C MOs refer to this as the higher goal of marketing - i.e.,

reaching the customer in a way that allows your brand to

stay relevant. From this perspective, marketing transfor-

mation is used to better serve customer needs in order to remain

top-of-mind. This then shifts the discussion from whether it’s off- or

online, to inline - a combination of both off- and online marketing

with the unique goal of reaching customers throughout their entire

journey with your brand.

The focus on customer centricity elevates the importance of a

cross-media approach, and demands integration across the

varying marketing channels (i.e., digital, non-digital, paid, owned,

earned, etc.) - which not only opens up new opportunities but also

increases complexity.

In addition to the complexity introduced in a cross-media and

channel approach, it also arises from the increasing amount of

data coming from each channel. This requires the right data to

be selected so that the correct message is delivered - at the right

time, to the right customer, and through the right channel.

“ The media consumption for the younger generations certainly differs [compared to previous ones]; they use media more volatilely and faster. Whether they are really no longer using traditional media is something that I dare to challenge. I don’t think it a matter of certain media channels that they no longer use, but the way they use it that is different. Strangely enough in traditional companies it is still very logical to separate online and offline because they feel like it concerns different subjects. Online, offline, marketing, communication; we have to see it all as one, that is also what it has become for the outside world. Customers do not really know anymore whether they have seen it on TV or online. This is so intertwined for customers that it should and could also be the case for how organizations organize themselves.” Mariëlle Krouwel, de Volksbank


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“ We implemented the agile way of working a few years ago and it has been a continuous learning curve. Agile enables us to be more innovative, but it also relies on the flexibility and willingness to change from all stakeholders.” Marieke Romano - van den Hoek, Greenchoice

“ It is desirable to have an integrated marketing strategy that combines both online and offline. I think it is a thing of the past to talk about online and offline as something distinct and separate. Instead, we should approach marketing strategies from an omnichannel perspective.” Gabriëlle van IJzendoorn, former Eye Wish

Agile organizations

T he business world has accelerated its Darwinian nature under the guise of all things agile,

characterized by responsivity, speed, and rapid impact. Agile innovation and development

methodologies have been around for years in the tech sector, specifically in software

development, with great results. This led many executives to wonder how agile methods could be

used in other functional areas, including marketing. CMOs all over the world are now frequently asked

to drive the innovation agenda for an organization; react in real-time to shifting market trends and

customer preferences; and show a material return on marketing investment, all at the same time. It’s no

wonder many CMOs are readily adopting an agile approach.

Among the 25 Dutch CMOs interviewed, the concept ‘agile’ was a key focus. This new way of working

illustrates the current shift underway from operating in traditionally structured, silo departments towards

a more flexible and multi-disciplinary, team-oriented style.

Although many CMOs embrace the agile concept and acknowledge its importance, they also indicate

that they have not yet fully adopted this new way of working. For example, some CMOs were met with

initial resistance, with slowed down their time-to-implement goals. Companies realize that the agile,

new way of working requires restructuring current processes - which takes time. To support adoption,

and enforce the necessary collaboration between departments in agile teams, some companies even

restructured their organizational set-up in the office.


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The role of the CMODue to today’s fast-paced digital world, CMOs are expected to fulfill a different role than their

predecessors. For instance, less time spent on the operational side and more dedicated to a director,

coach and/or sparring partner. The CMO of Transavia, Erik-Jan Gelink, compared his role as CMO to

that of a movie director:

“As a CMO, I am much more the facilitator by letting my team do the work themselves and giving them the mandate. My role focuses more on providing confidence

where I used to be much more at the operational side. There is also very little that passes my desk which I have to approve because I assume that when I create a strategic framework, and clear objectives, I have sufficiently intelligent people to bring that into practice. I now only have the discussion with them related to the KPIs. And I act more as a coach, a sparring partner who sometimes comes up with ideas when they need my expertise.”

Other CMOs emphasize the importance of providing guidance and a clear framework so that their

marketeers and specialists feel both trusted and appropriately equipped to execute the data-strategy.

Marketeers, therefore, receive a great deal more ownership than in the past; they are empowered to

make their own choices.

The marketeers and specialists are monitored (daily) via dashboards. This further illustrates the

evolving role of the CMO, in which they set the strategy and give their team the autonomy

to execute on that, while steering the work-in-progress based on dashboard insights.


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Resource scarcitySimilar to the 2018 report, one of the Dutch CMO’s primary challenges remains attracting and retaining

skilled talent - individuals with the right requisite skillset and inquisitiveness. Some CMOs no longer

focus on hiring ‘digital’ marketeers. They instead view ‘digital’ as critical and inherent capabilities of

any marketeer.

“ I believe that digital should just be part of the basic skills and knowledge of every good marketeer.” Jan Willem Förch, KWF Kankerbestrijding

As seen last year, some CMOs state that a separate and distinct digital marketing department could

possibly hinder the larger digital transformation. There are still, however, companies that deliberately

hire digital marketeers with the goal to infect their existing marketing department.

The importance of hiring data analysts has increased, due to the increase in data and focus on first-

party data. Many CMOs have already hired data analysts or plan to do so in the nearby future.

In addition to hiring data-driven talent, there remains a large focus on creativity. This creates yet another

challenge to collaboration, as CMOs attempt to bring together specialists with varying backgrounds

and skillset to knowledge-share. Agile teams could be the solution, as one of the key principles is

‘multi-discipline.’


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CUSTOMER


CUSTOMER CENTRICITY AS THE FOCUS OF THE CUSTOMER JOURNEY

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“ Due to digitalization, the focus - even more so - is on the customer journey and building brand loyalty, which compensates for the loss of branding that initially occurred with this digital transformation.” Nathalie Lam, Philips


F or brands to remain relevant and continue to put the customer first, CMOs discuss the need for

increased personalization. This requires moving from an inside-out marketing strategy towards

an outside-in one, whereby customer centricity is placed as the focus throughout the entire

customer journey. As opposed to the historical inside-out perspective, outside-in thinking aims to first

focus on the customers’ needs and demands before creating a marketing strategy.

“There must be someone on the board who thinks outside-in. Unfortunately, the pitfall for many companies is that they think inside-out. I am always concerned with

what happens outside, for example how customers’ behavior changes. We have to understand how customers move and what they want from us as a brand. Only then can we get started on creating an effective strategy, not the other way around.” Erik-Jan Gelink, Transavia

In order to reach the right customer, at the right moment, with the right message, CMOs need control

over first-party data. This allows them to extract relevant insights on each-and-every touchpoint

within the customer journey, as well as creatively plan an appealing message. In order to create an

integrated, omnichannel marketing strategy, CMOs must understand the course a customer follows.

Therefore, some companies aim to integrate their offline (shop) data with their online data in order to

provide a more complete overview on customers’ varying touchpoints throughout their full journey.

The data on these touchpoints then helps companies to personalize their offerings based on the phase

in the customer journey in which the customer finds him/herself.

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Although most companies strive for a one-on-one marketing approach, the question still remains as to

whether one-on-one targeting is the best strategy or if limited personalization is more effective.

“ There are different visions: some say targeting wide is most efficient, while others believe in one-on-one. Ultimately, it is somewhere in the middle.” Kim Potters, AkzoNobel

“What I find to be the biggest pitfall of data is that there is so much available due to which data collection and data analysis are all over the place. Before you know

it, we are targeting men with mustaches and blue eyes, just because we can get that out of the data. But nobody knows why and if that was really the intention. This is the beauty and the pitfall of data; there is a lot of data available and the trick is to really extract the essence and determine what you really want to do with it.” Mariëlle Krouwel, de Volksbank

When asking CMOs if they had a single customer view, many said that they better understand different

customer segments and creating a single customer view still remains a challenge.


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THE SHIFT


OBTAIN FIRST-PARTY DATA OWNERSHIP AND DIRECT ACCESS TO MEDIA BUYING TOOLS

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“ With in-housing, we are in charge of the online media-buying while offline is done by our media agency. I really believe that online purchasing and optimization can be done in-house if you have the right people, technology and data.” Edwin Hof, TUI

An evident trend is the shift towards in-housing digital. Thirty percent of CMOs interviewed have already completed this (digital) in-house transition, with another 55% currently in-process.

A lthough the media landscape is becoming increasingly complex and fragmented, digital

has simplified due to available tooling making it easy to in-house. The self-service of major

parties, such as Facebook and Google, have made it possible for other companies to follow

suit, conducting media buying themselves. Whereas in the past, media-buying was highly complex,

today self-service platforms make it easy to manage. Contrastingly, offline media-buying requires a

different set of tools and knowledge, creating difficulties to bring in-house. Therefore, media agencies

continue to manage companies’ offline marketing.

“ Four years ago we started to actually in-house the data and media. We want all the data in-house.” Frenkel Denie, FrieslandCampina


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“ We consider technology to be a key enabler and are building more internal capabilities and capacity in this space. This is reducing our dependency on agency partners.” Harry Dekker, Unilever

Some CMOs predict that when TV becomes programmatically available they will then be able to in-

house that aspect, as well - which could highly impact the role of the media-agency. This future may

be accelerated due to CMOs’ desire to obtain ownership of first-party data to drive efficiency and

effectiveness of media buys.

“ Ultimately, if you focus on the performance marketing part, and you as a marketer have the tools and technology in-house, it becomes very easy to service yourself.” Maurine Alma, Takeaway.com

As mentioned, CMOs are more focused on the entire customer journey than ever before which

requires data on new and different touchpoints. In-housing creates additional data controls and the

ability to use first-party data for media buying, both faster and more efficiently. Additionally, since the

implementation of the new General Data Protection Regulation (GDPR), data usage and privacy have

become increasingly important topics. Organizations which are not compliant with the new regulation

could potentially face heavy fines, as well as reputational damage. And, the third-party risk of losing

customer data further enhances CMOs’ desire to be in-control of first-party data, thereby accelerating

this in-housing trend.


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MEDIA


HOW THEIR ROLE CONTINUES TO CHANGE

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The increasing trend to in-house digital, and the focus on data ownership, is forcing media agencies to obtain a new role in the changing marketing environment. Media agencies are expected to operate as a con-sultant or partner, and while most are embracing this change, CMOs are critical of the speed and depth of media agencies’ transformation. CMOs expect more from their agencies; they need their agencies to provide distinct and innovative ideas, a source of continuous challenge, and to stay up-to-date on trends.

Specialized agencies

D espite the evolving role of media agencies, today’s

fragmented and complex media landscape often

requires the support from specialized agencies on

specific topics. This makes it difficult to stay current on all best-

practices, which is where specialized agencies prove their value

(e.g., providing insights into the latest developments in their own,

unique niche).

Specialized agencies could therefore maintain an important role

in the fragmented and complex media landscape by providing

their specific knowledge and expertise on key topics.

“ In the meantime, I see that we may need some help in certain areas because one or two specialists can’t keep up with the bandwidth of an agency. Agencies have the time and scale to look continuously at best practices.” Jeremiah Albinus, fonQ

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Media agencies are perceived as increasingly transparent.Whereas in the past, CMOs were doubtful about the level of transparency provided by their media

agencies, this is changing.

Almost 70% of CMOs interviewed perceive their media agency to be transparent, while 20% still

maintain a position of doubt. The remaining 10% acknowledge that media agencies have become

more transparent but that there is still progress to be made. As a result of increased data availability,

being transparent is easier than ever for media agencies. Historically, transparency was reserved for

financial indicators. Today, however, it is related to the quality of digital media (e.g., viewability).

Additionally, trust in one’s media agency, as a partner, is important. In order to effectively collaborate

with a media agency, CMOs find trust to be an essential ingredient, as well as alignment on core values

and goals.

“Transparency and trust are interconnected when you choose partners. Not only should there be a strong connection and transparency on the goals you

are both pursuing, but you also need transparency and trust on a personal level. In my opinion, that is the only way to work together.” Roel van der Heijden, Zilveren Kruis


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CREATIVITY


THE NEED FOR CREATIVITY IN THE ABUNDANCE OF DATA AND TECHNOLOGIES

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During our interviews, we asked CMOs if they believe that creativity is changing due to new technologies and data. Although opinions differed, it is strongly recognized that the increase in data and new technologies do influence creativity.

T hese results are consistent with the New Creativity vodcasts

launched by IAB The Netherlands and Adformatie, which

explores the changing role of creativity in relation to new

technologies and data availability. In this series, the emerging

opportunities, and complexities, of XYZ were also discussed.

An important notion in the CMO interviews is that due to the

increased data availability, it is becoming easier to create

personalized marketing through the right targeting. Nevertheless,

if the creative is not interesting or does not match with the

customer, it will lose its potential impact. It is therefore key that the

right targeting, through data, is combined with a complementary

creative. A large portion of the CMOs interviewed acknowledge

the possible impact of data on creativity but both regard it as a

possible opportunity as well as a challenge, depending on how

you combine the two.


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The CMOs who view the impact of data and technology on creativity as a challenge emphasize that

everything becomes standardized through the increasing amount of available data. Because of this

growing focus on data and targeting, the importance of creativity could be disregarded, thereby

missing the chance to make an impact on the customer. Similar to the challenge within innovation,

CMOs also acknowledge that due to the availability of data, marketeers do not dare come up with the

‘real big ideas’ for which an entrepreneurial mindset is needed, and cannot always be data-driven.

However, the combination of data and creativity could also become the driving factor for

success. Working in an insight-driven way could ensure creativity is developed around a specific

opportunity, and be the key to creating the impactful message for which marketers are aiming.

A challenge or an opportunity?

T he opinions on how creativity changes through new available data and technique highly varies.

On one hand, CMOs regard the increasingly available data and techniques as a challenge for

creativity, and recognize that it changes creativity, but not for the better. On the other hand,

CMOs view the increasingly available data and techniques as an opportunity for creativity, and even

think that creativity hasn’t changed enough. And a few CMOs fall somewhere in the middle, seeing

both the opportunity and the challenge, which is ultimately dependent on the way data is used to

enrich creativity.

To this last point, several CMOs stressed the importance of creating an organizational culture

that supports creativity as well as innovative ideas. They emphasize a need for organizational

transformation, in support of a learning cycle so that it is possible to make mistakes and embrace them

as a learning opportunity. This creates a sense of trust and an entrepreneurial environment in which

marketeers feel free to experiment and explore their creativity.


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“Creativity changes and not for the better. Please let data and creativity reinforce each other. What we now see is that due to the availability of data, people tend to focus on the short-term conversions and thereby miss a very

large target group that might not fit within their cookies and pixels at the moment but will become relevant in the long term. The individuals you overlook will not get your message for years because you are constantly working within that certain phase in the customer journey and forget all of the other phases. You should look at the entire customer journey in order to trigger people from the start; you have to be visible to people without them noticing. If you only focus on the people that are currently interested in your company, you are too late.” Annette Reijersen van Buuren, CPNB

“I rarely see things that impress me when it comes to creative media use at the moment. I really think that creativity has disappeared from digital media because of the focus on programmatics. So yes, there is a lot of data, but data is

not the solution for everything. Everything has become a kind of “eenheidsworst” in terms of ad formats. I understand that every operator is fully focused on data and programmatics and audiences and so on, but that is also why everything has become the same.” Andrea Huijssoon, Heineken


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“I think data can give you insights easier and faster, so that you can move your creativity in a better direction. But I also have the idea that more and more companies no longer dare to come up with really big ideas. Sometimes

you have to believe in your own leap of faith. This takes real courage and entrepreneurship which cannot always be driven by data, so I believe in a balance. Data can be enriching but also suffocating. I try to create so much safety that people dare to be entrepreneurial.” Harry de Haas, former KPN

“The challenge is keeping the balance - between data-driven marketing with a focus on finding the right person at the right moment and place, and presenting engaging and spot on creativity. The success of the creation is a condition

for the success that you could theoretically have with data.” Louise Meijer, VodafoneZiggo


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“Creativity is changing too little. The traditional creative agencies are used to acting from their own creative heart and that often goes very well but it is not based on data. This opens up opportunities but it means that you have

to have a good strategist, as an in between, who is able to translate the bin of data to the creative people. I think more data-usage is possible within creativity but on the other hand I am afraid that we might be inclined to destroy all creativity on the basis of data. I would like to really manage the balance with those two halves of the brain in which creativity and data reinforce one another.” Mariëlle Krouwel, de Volksbank

“I think data should help creativity, but not the other way around, because the data is and remains very binary, you still need something around it, creativity. They need each other. Data has also changed creativity, if only because you

can work in a very insight-driven way ensuring that creativity is developed around a specific topic or opportunity. So, they have indeed strengthened each other but you have to be careful that creativity is not thrown overboard by thinking that it will emerge from the data itself.” David Verschoor, Hartstichting


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Will creativity become more important in the future?Almost all CMOs interviewed agree that creativity will, in the future, be at least as important - and

possibly even more so - due to the increasing significance of distinctive creative. With data, it becomes

possible to target the right person but if your creative does not match the customer, it will lose the

potential impact that the combination of the right data and creativity could have. Nevertheless, some

CMOs also state that relevance and targeting are key, versus creativity. From this perspective, it is

more about the data and the right targeting in order to reach the right customer at the right time within

their customer journey. Although targeting for this group is seen as most important, the CMOs also

acknowledge that creativity matters.

“Creativity is becoming increasingly important. The current consumer is increasingly bored and the possibilities are endless. You really have to be distinctive with your

content and that becomes increasingly difficult. On the one hand, I think you should be creative in your content and keep innovating. On the other hand, you can test and see from the data what works best.” Gabriëlle van IJzendoorn, former Eye Wish


“I see in our campaigns that creativity is becoming less important, although this might be controversial to what other studies are saying. I think relevancy and targeting are becoming

more important; serving people the right ad at the right time on the right device. Your message should also be fun and creative but I think relevance and targeting yield more.” Edwin Hof, TUI

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DATA OR


TO FOCUS ON COLLECTING MORE DATA OR EXTRACTING BETTER INSIGHTS?

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“ The challenge with data is getting it all together, in a way that it is possible in terms of GDPR and in which it is simple and actionable. I aim for having as little data as possible but actionable.” Federica Foroni Lo Faro, BrightPensioen

“ We know what the journey is of our customers, we know which channels our customer goes through, which helps us allocate our budget.” Vanessa van Leusden, Paula’s Choice

O ver the last few years, with the increasingly available data, data collection and availability

have become key focus areas for CMOs. There is currently a noticeable split between

brands - those which are still focusing on data availability versus the ones shifting their focus

towards data management, who are now experiencing the challenge to convert data into actionable

insights.

A company’s data strategy strongly depends on the maturity phase in which that company finds

itself. In the early stages, most companies interviewed focused primarily on obtaining as much data

as possible; whereas in later stages, they discover the challenges bulk data brings, especially when

trying to put it into action.

Of greatest note, is the implied challenge of analyzing the data and combining the various data silos

so that relevant, actionable insights - on every touchpoint within the customer journey - are available.

It is easy to completely lose yourself in the increasing amount of data, making it hard to see the forest

through the trees. Contrary to what many may expect, the majority of brands do not yet have an

external data partner, even though they could use support in linking data silos thereby creating a

single ‘truth’ - which was shared as a goal during last years’ CMO interviews. One explanation for this

is that although possible data partners are multiplying, CMOs realize the importance of control and

ownership over their data, which influences them to keep it in-house.


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I ncreasing use is being made of data management platforms (DMP). In some cases, DMP’s are fully

operational; whereas, in other cases, they are still in-development. CMOs suggest that they will

continue to move towards increased integration between their DMP and CRM system. The current

silos between these systems is a stated challenge, but also recognized as a potential opening for new

opportunities once they are integrated.

“ The biggest challenge in data is to make it truly transparent and openly available throughout the organization. By providing insights I also mean giving meaning to data - so how do you make the data meaningful and how are you really going to use it?” Kim Potters, AkzoNobel

Another challenge is the openness and transparency of the data throughout the company.

Brands increasingly rely on first-party data, and in most cases want to openly share relevant data

inside their organization in order to get the most out of the collected data.

In conclusion, it is important to note that data availability and data management remain

highly important topics on CMOs’ agendas. As mentioned, there are still some challenges to

overcome but also newly arising and exciting opportunities.


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A YEAR


A SHIFT TOWARDS ETHICS

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Last year’s implementation of the new General Data Protection Regulation (GDPR) made it an important topic on the CMOs’ agenda.

Now, a year after the implementation, the dust seems to have settled, and over the last 12 months

CMOs have been working to become GDPR-proof. Whereas last year, there were mixed perceptions

as to whether GDPR was a challenge or an opportunity, most CMOs are now in-acceptance of it and

finding ways to use and share data within the boundaries of the law. This created movement in the

dialogue from ‘what is allowed’ to ‘what is ethical.’

“ It is important that you deal with the boundaries that are set and that you get the most out of them.” Jan Willem Förch, KWF Kankerbestrijding

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As customers become increasingly aware of their data privacy and resistant of companies who

are in violation of it, the discussion around the ethics of data usage elevates in level of importance.

The risk of unethical data usage not only leads to heavy fines but also potential reputational damage

resulting into customer dissatisfaction. This enforces CMOs’ desire to be in-control of first-party data,

and consequently it also accelerates the in-housing process to ensure data is being used in an ethical

manner. Some CMOs suggest refraining from third-party data usage alltogether. Although, this could

make it more difficult for companies to target the right customer, making fulfillment of ethical standards

a higher priority.


“What I find interesting, is that the introduction of GDPR has put primary the focus on what is allowed and what is not

allowed with respect to data and privacy. We now see a shift in these discussions towards the ethics of the use of data. I find that ethical side of collecting and using data very healthy and relevant. I strongly believe that there’s a lot of value in not looking away and taking our responsibility as an industry.” Harry Dekker, Unilever

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THE FULL CUSTOMER


A SHIFT FROM PRODUCT INNOVATION TO SERVICE INNOVATION

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“ Innovation is not only about technical advancement. To me, real innovation is that which improves lives, makes the world a bit better and has true relevance for users. Of course these can be big life changing changes, but small continuous steps deliver innovation too.” Louise Meijer, VodafoneZiggo

During our interviews, CMOs were asked to define what innovation means to them and which innovations should receive the most attention.

Regardless of the type of innovation, many CMOs emphasize the importance of increasing the added-

value for the customer as a fundamental part of innovation.

“Innovation is anticipating the needs of the customer and then coming up with a solution, in a product or service, without your costumers having to ask for that solution.” Jeremiah Albinus, fonQ

When searching for what value they can add, companies increasingly found that the answer does not

lie in the product itself but in the services around it. Historically, innovation was predominantly seen as

product innovation; however, the focus is currently shifting towards service innovation with an increased

focus on the entire customer experience.

The experiment and learning cycleAlthough data can be very helpful for personalization purposes, CMOs are also aware of the downside.

For example, with the increase in data, there is less focus on intuition. The prevailing results-oriented,

decision making process makes innovation-based decisions reliant on facts, leaving intuition and gut

feelings behind.


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The experiment and learning cycle, which some CMOs are currently aiming for, becomes a challenge

with the main focus on direct results. This is because the risk of non-proven innovations often causes

resistance, regardless of their potential. This requires a different mindset and governance from CMOs

in the future, which some CMOs have already, progressively adapted:

“I love the term ‘Irrational innovations’. Why: humans act irrational while we as marketeers still use rational approaches. Using behavioral economics and science

will be a tremendous driving force for new innovations. The starting point is to unlock and understand how we humans really behave instead of how we say we behave. Most market researches and way we as marketers operate are based on claimed data. This maybe explains why more than 90% of all innovations fail today.” Frenkel Denie, FrieslandCampina

“ Very often you see when the innovation is not [yet] proven that it becomes a subjective discussion. When we are experimenting and learning, we are focused on the performance side, so you [advance] but those steps are very small. When [the innovation] gets a little bigger, internal stakeholders become more resistant towards it, because the innovation is not-yet-proven. If you want to be successful in creating larger innovations, you should cut it down into smaller, more measurable experiments. Take one step at a time, without losing the end goal.” Randy van Essen, former T-Mobile


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Innovation budget

One of the possible ways to enhance this experiment and learn

cycle is to dedicate a fixed part of the marketing budget towards

innovation.

Some CMOs have already applied this by using the

70/20/10 rule in which 10% of the marketing budget is

dedicated to innovation, which is - according to them - large

enough to make an impact and small enough not to pose a risk

to your business. However, this is not a consistent practice, and

there is large variation between the brands in alternate strategies

utilized (i.e. innovation budget as a fixed part of marketing spend,

non-existent, etc.).

Those CMOs who oversee a non-fixed budget indicate difficulty in

obtaining the funds needed for innovation, as this is often the first

thing affected by budget cuts. Whereas, CMOs who are part of a

company in which innovation is so deeply rooted in their culture

feel a designated innovation budget is unwarranted because the

funds will always be made available.


“ The goal is to create a test and learn cycle where you also dare to make mistakes. It is also a matter of governance in which managers express hard expectations as to what will be in the future. I believe that as a manager we must embrace uncertainty as well. You just have to say: we do not know what the future will look like but we will go there and learn together, so what I ask from you is trust. This is incredibly difficult but I think it is what you should do as a modern CMO.” Jeremiah Albinus, fonQ


The most important innovations: Voice and Artificial Intelligence

W hen asking which innovative technologies are currently of most importance, artificial

intelligence (AI) and Voice were most often mentioned. AI is used for a broad range

of innovations, in different industries. For some brands, for instance, AI is used for tasks

which previously fell under the scope of a marketeer’s responsibilities, thereby reshaping their roles.

For example, the implementation of a chatbot within customer care; or, the use of machine learning to

optimize performance marketing. Furthermore, AI is also used to help brands within the e-commerce

industry overcome their upselling challenge. Most often, sales are done through online channels,

where price is the biggest determinant for customers. This makes upselling a challenge, and is different

from the past where offline sales and face-to-face contact helped respond to the broader customer

needs. AI, in combination with personalization, creates a way to compensate for this gap in personal

service. Wehkamp, for instance, is developing a method to define the style of their customers in order

to provide a more personalized product ranking, which is linked to the idea of providing online advice

and service.

The importance of Voice differed based on the type of company. Within the retail industry, for

example, Voice has become more important due to the increasing sales of commodity goods and

influence of Google and Amazon when buying these products through Voice assistants. A relatively

new phenomenon is Sonic Branding, a new innovation in which brands create their own brand sound.

For instance, Mastercard experienced a shift in the way customers engage with their brand. This

transformation causes less physical credit card usage thereby decreasing the number of physical

touchpoints with the brand. Mastercard overcame this obstacle by transitioning to a completely Sonic

Brand.

“ We do not have a separate innovation budget because in our business innovation is something that everyone must do. Whether it is called optimization or innovation, whether it is small or large, everyone has to do it. We actually said that we will no longer organize it separately, but all teams have a sense of need to change, to improve and to innovate.” David Verschoor, Hartstichting


“ Voice is really important for us. We are a Sonic Brand because we see that Voice Shopping is increasing and of course during voice shopping our logo is not visible. But when payments are made in this environment, we do want to reassure the shopper that they are dealing with Mastercard and that their payment is safe. Therefore, we have added sound as a new dimension to our logo.” Marene Arnold, Mastercard

Besides AI and Voice, Virtual Reality was also occassionally mentioned as an important innovation

- especially for companies such as fonQ and AkzoNobel where VR enables the customer to have a

real-life experience prior to their purchase. This is in-line with the increased focus on the full customer

journey, in which innovation is not limited to a product or service but encompassing of the entire journey.

“Innovation is coming up with new solutions to solve your customer’s problems or creating added value. Whereas in the past, everyone thought of new products when

thinking about innovation, I believe in new solutions. Certainly, in this market you want to give your customer new solutions and that does not always have to be a pot of paint. The paint is only a part of the customer journey.” Kim Potters, AkzoNobel

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Innovation for charitiesWhen discussing innovation, CMOs touched upon a broad range of innovation types such as products,

platforms, advertising and services, showing that innovation is an umbrella concept. For charities, one of their unique and primary challenges is the search for alternatives to ‘giving.’ In the charity world, no real alternative exists. The historically dominant and traditional channels still

lead the way, which include acceptgiro (direct debit authorization) or giving via telephone. With the

increasing use of digital channels, this poses a challenge. In addition, it’s important to note the highly

varied online giving behavior compared to that of offline, in which online giving only consists of a

fraction time compared to that of offline. This challenge requires charities to utilize creative thinking in

order to seize new giving opportunities. For example, making use of new digital innovations such as

crowdfunding, Tikkie and QR-codes.


“The need for innovation, which is very digitally driven, is huge for the charity world. With us it is really the search for major innovations so that you can

actually better meet the needs of the Netherlands. The complex thing is the behavior that one has towards charities which is very traditional. The gap that innovation must bridge is therefore really big. That makes it very complex, but also very exciting and fun.” David Verschoor, Hartstichting

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MARKETING


PROVING THE EFFECT OF MARKETING SPEND IS KEY

9


When talking about marketing funds, an interesting split is visible between online performance and general media budgets. The latter of which is currently under increasing scrutiny caused by, among others factors, CFOs’ perception of marketing as a cost.

Furthermore, the cost of traditional media is rising, for which it is becoming increasingly difficult to show

direct results. Because proving the effects of marketing spend is now imperative in order to obtain

and retain budget, the pressure is rising. On the other hand, performance marketing budgets are

increasing and, for some companies, ad infinitum, as long as ROI is being demonstrated. This shows

the increasing emphasis on demonstrating results in order to obtain budget.

“The digital transformation has changed the insight of the ROI enormously. Due to digitalization, you can [more greatly] measure the impact of your campaign and more easily justify whether your campaign has been successful.” Nathalie Lam, Philips

Consequently, the majority of the brands invest most of their digital marketing budget in

performance marketing, with the exception of the telecom industry which has a stronger, longer-

term focus whereby they dedicate most of their digital marketing budget towards branding.

CMOs are therefore forced to work in a more results-oriented fashion, making data essential.

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Some of the CMOs emphasized the possible downside of this shift as there is still a difference between

creations for the short- and long-term. The effect of branding campaigns are, for example, more

difficult to measure with results only apparent after a longer period of time. This inspires discussions

about whether it’s best to pursue a short- or long-term vision. Currently, CMOs see that the way of measuring for performance marketing is also used for branding, causing brands to draw inaccurate conclusions. Measuring the wrong things could become a pitfall of the digital

transformation, especially with a primary focus on the short-term.


“ If I would only focus on performance marketing, I would have an incredible year, but I do not want only one incredible year, I want to have an incredible 3 or 10 years.” Jeremiah Albinus, fonQ

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THE KPI


HOW TO CREATE SYNERGIES, A COMMON UNDERSTANDING AND UNIFIED LANGUAGE

10

43

CPACPO

COST OF

SALE

CLICKS

CONVERSION

COST SAVINGS

NUMBER OF DOWNLOADS

CHURN

DWELL TIME

CUSTOMER SATISFACTION

CPMINVOLVEMENT

VIEWABILITY

REVENUE

CLV

RESPONSERATIO

BRAND AWARENESS

VIEWABLE VIDEO VIEWS

CONTRIBUTION MARGIN

TIME TO MARKET

AOV

COMPLETION RATE

CSR

REACH

NPS


In addition to ‘how to measure’ it is also important to consider ‘what to measure.’ During the interviews, many varying KPI’s were mentioned.

W ith multiple KPI’s, creating synergy becomes difficult. Plus, measuring many different KPI’s

can create confusion in how to combine and interpret each metric in order to create a

common understanding and unified language. As a result, some CMOs prefer using

fewer KPI’s and focusing on optimization of the essential few.

When setting KPI’s, the definition is essential to ensure that we

are all talking about and measuring the same thing. In a few

interviews, it was also mentioned that certain KPI’s cannot be

interpreted in isolation.

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Is the NPS still alive?The Net Promotor Score (NPS) is a score used to measure client satisfaction and loyalty. It is a frequently

used tool within marketing but the question is whether it is still relevant. The answer lies somewhere

in the middle, as some CMOs still use the NPS as a key metric while others are shifting towards other

metrics, such as the Customer Effort Score (CES). The CES focuses on the effort customers put into, for

example, obtaining a certain service or resolving an issue.

“Obvious KPI’s are on sales and brand, of course. We also use NPS which is still an easy tool for measuring client satisfaction. It doesn’t give a full picture,

however. I think we need additional ways of measuring and comparing 360 client experience, such as the CES, for example.” Louise Meijer, VodafoneZiggo

“We know that customer experience is our main driver for retention. We have a dedicated team responsible for CX in the overall customer journey (including

all touchpoints such as flight and destination experience). By monitoring NPS and underlying quality scores, the team identifies the biggest pain points and initiates improvement projects. This continuous improvement drives long term customer loyalty.” Edwin Hof, TUI


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Increasingly important or new KPI’sDuring our interviews, a list of increasingly important or newly emergent KPI’s formed:

• Churn and CLV: Historically in the telecom industry, ‘Churn’ has been an important (business) KPI.

We now see this KPI becoming increasingly important in other industries as well. Churn is defined

as the frequency in which customers end their subscription. In other words, the percentage of ‘lost

clients.’ This measurement is connected to customer loyalty. A similar on-the-rise metric for these

types of industries is Customer Lifetime Value (CLV) which includes, among other things, the value of

the client and the Churn. This KPI is currently expressed in revenue but some CMOs want to change

CLV to a profit-based metric (e.g., profit x Churn).

• Another emerging KPI, especially in the retail industry, is Contribution Margin.

• Dwell time is the time that customers spend looking at an advertisement, which was mainly

mentioned due to its research-proven, direct-relationship with sales. According to the Time is Money

study of Pathintelligence, a 1% increase in the dwell time caused a 1.3% sales increase.

• Integration: Some CMOs mentioned the added value of integrating digital marketing data

with store traffic data as a new KPI. This is in-line with looking at marketing from an omnichannel

perspective. “Both physical retailers and omnichannel players are begging for more physical traffic

into their store network which could boost performance when integrating digital marketing data with

store traffic data.” - Rene Repko

• The last KPI mentioned is Contribution Corporate Social Responsibility (CSR), which is based

on the progress of important, CSR-related factors.

“In addition to revenue, we also manage on contribution margin which is sales - purchasing - variable costs - marketing budget and then you have something left

on which you should steer your marketing efforts on a granular level. This is certainly a newer KPI for retail.” Jeremiah Albinus, fonQ


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This is our third research report; and last year, the market showed that the topics we’re discussing here within are really hot which were reinforced by several published studies. In our latest study, we will give you new insights but also confirm some trends which are going on. It’s not news that we have entered a new area of technology-driven disruption; and that the focus is on how to serve customers better, faster and cheaper. Our aim is to provide you with insights into the Marketing industry where digital is the accelerator for business growth, and to both frame the current challenges and provide a guideline for solutions.

Moment of truth

A fter three years of research, we are confident that the word ‘digital’ will begin to fade

because it’s the standard rather than the exception. Although agile has been a topic for

years it has become the way of working as the industry’s focus is now on transformation and

how to remain flexible with multi-disciplinary teams. It’s clear that more and more CMOs believe purely

digital departments can hinder the digital transformations as a whole. The more digitally-minded

organizations, or pure players, are definitely at the forefront of this. We also noticed that the role of

CMO is changing into that of a director’s role. They are becoming increasingly responsible for guiding

their marketeers and specialists through the fields of data-strategy, monetization and optimization by

giving them more ownership. CMOs span of control is growing as more data analysts and production

members are joining the team. And connecting those teams has become an important skill. Marketing

is faster and more complex than ever before and standing out from the crowd can be a new USP for the

CMO. The restructuring of your organization is an interesting topic on the agenda of IAB Netherland.

Focus on customer centricity throughout the entire customer journeyOur latest (2019) Ad-spend figures confirm that, following the shift in media consumption, digital

advertising is still growing. The quick shifting of media spend seen in the last few years has a huge

impact on our industry, which this year we can illustrate the consequences of through a number of

trends.


Nathalie Peters - President of the Board IAB The Netherlands

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Due to digitalization, brands are returning their focus to build loyalty. The recent years’ strong focus

on optimizing digital performance resulted in a loss of branding. We noticed a shift from inside-out

marketing to outside-in marketing: what are the customers’ needs and demands? This is why gaining

control of first-party data is high on the CMOs agenda. Namely how to extract relevant insights on

every touchpoint within the customer journey.

The decrease in linear tv consumption and an increase in online watching through streaming platforms

amongst millennials demands for a different approach. For this group, it’s important for marketers to

grab millennials’ few seconds of attention in the media, and to use those few seconds wisely. This is

becoming a higher priority goal for marketing: reach your customer in a way that your brand stays

relevant.

A focus on customer centricity means that the cross-media approach is (back) on every CMOs’ (media)

agenda. An integration of the varying marketing channels is needed. This opens up new opportunities

but also increases complexity due to the increasing amounts of data. Data can be a blessing but also

a curse. And we are going to see that this is a recurring phenomenon. It’s all about finding and using

the right data. Nowadays, marketing strategy should only be approached from an omnichannel

perspective.

Desire to obtain ownership on data pushes the in-housing trendIn the last two years we noticed that the digital part of the media landscape has become easier

to handle and monetize due to available tooling. In order to cut costs; get more control and more

transparency, many advertisers are hiring specialists to run this part of the business. This, combined

with the increasing need for first-party data (as a result of the implementation of the GDPR), accelerated

the in-housing trend. To date, around 30% of the CMOs have in-housed digital. In-housing creates

additional control over, and access to, first-party data - especially within media-buying. Additionally,

the third-party risk of losing customer data enhances this desire to be in control.

This trend is forcing a change in landscape. Media agencies today are more often expected to

operate as a consultant or partner; specialized agencies are needed for the latest development

in their respective niches; creative production units are placed in-house; and there is a noticeable

increase in organizations’ use of data management platforms (DMP’s).


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Too much data has an inhibitory effect on the entrepreneurship of CMOsIt is strongly recognized that the increase in data and new technologies influences creativity. Due to the

increasing amount of available data, personalized marketing has become easier. But there is also the

danger that too much data kills creativity and standardization will eventually diminish subordinates’

ability to even think and act creatively. CMOs’ opinions on this topic are divided. This same danger

also applies for the application of innovation. Innovation requires an open way of thinking. When

marketeers follow data too closely, they do not dare to come up with new big ideas. In this way, data

kills intuitive behaviors.

However, the combination of data and creativity should be the key to success. After all, it supports

working in an insight-driven way to support the use of creativity around specific opportunities thereby

creating impactful messages for which marketeers aim. Using creativity to distinguish brands is an

important pillar for the future. Organizations with a more innovative and creative culture, and with a

more growth-hacking mindset, will continue to be successful.

There is currently a noticeable split between brands- i.e., those still focusing on data availability

and brands shifting their focus towards data management. The latter of which are experiencing

the challenge to convert data into actionable insights. Breaking down data silos within their own

organization is currently the biggest challenge, with the primary question being: How to get the most

out of all the collected data? Guidance in this area is needed.

We should be aware of how we measure The digital transformation has changed ROI enormously. We see an increased emphasis on proving

the results of marketing spend in order to obtain budget. Consequently, the majority of brands invest

most of their digital marketing budget in performance marketing. The possible downside of this shift

is losing the long-term effectiveness of branding. This inspires discussions about whether it’s best to

pursue a short- or long-term vision. It’s important that we remain aware of the measurement pitfall of

the digital transformation.

The ROAS workgroup, created by bvA and IAB Netherlands, recently presented a KPI framework which

sufficiently addresses short- and long-term goals, and aligns with the marketing industry’s focus. The

resulting KPI-framework supports marketers in determining which KPI’s should be set in which phase of

the customer journey. A nice answer to the current needs of our market.


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Annette Reijersen van Buuren - Manager Merk, Marketing & Communicatie CPNB

Andrea Huijssoon - Media Manager NL Heineken

David Verschoor - CMO Hartstichting

Edwin Hof - Digital Director TUI

Erik-Jan Gelink - CEO Transavia

Federica Foroni Lo Faro - BrightPensioen

Frenkel Denie - Global Director Digital Commerce FrieslandCampina

Gabriëlle van IJzendoorn - (former) Marketing Manager Eye Wish

Harry de Haas - (former) CCO KPN

Harry Dekker - Media Director Unilever Jan Willem Förch - Director of Marketing & Fundraising KWF Kankerbestrijding

Jelka Molenaar - Marketing Manager (ai) Bever

Jeremiah Albinus - CMO fonQ

Joost van Hilten - CMO Wehkamp

Kim Potters - Global Director Consumer Marketing AkzoNobel

Louise Meijer - Director Brand & Communications VodafoneZiggo

Marene Arnold - Director Marketing & Communications Mastercard

Marieke Romano - van den Hoek - Commercial Director GreenChoice

Mariëlle Krouwel - Head of Brand Portfolio, Media & Communications de Volksbank

Maurine Alma - CMO Takeaway.com

Nathalie Lam - Head of Global Sponsorship Philips

Randy van Essen - (former) Directeur Brand en Communications T-Mobile

Rene Repko - CMO

Roel van der Heijden - Manager Director Marketing Zilveren Kruis

Vanessa van Leusden - Director Marketing & Digital Paula’s Choice



ColofonClient: IAB The Netherlands

Research: Deloitte

Design: epidemie

For more information: Nathalie Peters | President of the Board IAB The Netherlands | +31 6 2238 1271 | [email protected]

Wendy Pouw | Managing Director IAB The Netherlands | +31 85 401 08 02 | [email protected]

Suzanne Ketelaar | Marketing Communication Manager IAB The Netherlands | +31 85 401 08 02 | [email protected]

https://www.iab.nl/

https://www2.deloitte.com/nl/nl.html

http://epidemie.com/

Documents

WHAT’S ON THE AGENDA? · largest CMO research to-date. Collaboratively, we interviewed 25 CMOs and leading marketers from varying industries in different phases of their digital