The C suite is in turmoil once again. In the 90/00’s it was the CIO - during that period the average tenure of a Fortune 5,000 CIO was down to 18 months. The winds of change created by the disruption in IT technology caused by the internet were in full blast and very few made the transition successfully. The SVP of Sales or CRO (Chief Revenue Officer) also lived through this with the advent of internet based CRM systems, characterized most strongly by Salesforce.

As we approach 2015 it’s the CMO’s turn - the average tenure of a Fortune 5,000 CMO is now down to 18 months - and for very similar reasons that hit CIO’s previously. The impact of the social web on marketing practices that held for decades is now in full swing.

Previously tried, tested and proven methods that worked for decades in building brands, audience storytelling and converting leads are failing. These traditional methods are being replaced by a new ecosystem, affecting the traditional buyer journey and making way for the “zero moment of truth” - where a customer can make buying choices before ever engaging directly with a brand.

The impact of the social web and its multiple variants, including mobile, require that companies of all stripes - B2B/B2C/mix - dramatically change how they engage with their customers.

Looking at traditional marketing activities such as print or TV commercials, the audience is fracturing and turning more and more to digital: In the case of print, towards tablet/phablet/e-readers and blog type interactions with less developed business foundations (potentially not advertising). In the case of TV, the cord cutting phenomenon is being driven by the growing adoption of services like Netflix and products like Tivo dramatically reducing the amount of exposure to TV ad time for consumers. You can read endless analyses of the details associated with these trends - but the trajectory is clear.

And it’s into this landscape that the CMO must make plans to execute marketing activity that will reach the right audiences. This requires a specific set of tools and a qualified team.

This is the beginning of a huge topic - but in this post I will attempt to address a very specific part of the question, namely what should the team structure and the budget allocation for the marketing function in 2016 look like? I say 2016, allowing CMOs a year to put the tools, people and budgets in place to implement such a model, though in some markets and geographies, they may not even have a year to spare on planning...

The answer to this is likely to be different for every company, but there are some general guidelines that can be described to point CMOs in the right direction. The particular structure I describe here is designed for a company with a mix of both B2B and B2C channels/customers. Many of the functions required fall into 5 general areas:

Ops & Analytics Team

This group is responsible for managing all the technology that supports the digital marketing activities of the business. It is also in charge of output metrics and their translation into business outcomes. As a result, this team plays a critical role in budget allocation by identifying how marketing tactics and strategies impact the business.

Marketing Automation Team

This group is in charge of website conversion and optimization of the marketing funnel. As a result, it is responsible for:

  • The website(s)
  • Lead cultivation
  • Inbound/outbound marketing mechanisms, predominantly email based

Content Team

This team is responsible for strategically creating digital content in a variety of forms, including but not limited to blog posts, long and short form videos, and content presentations. This content provides utility for prospective and existing customers, and conveys clear stories about the company, its products, and other related topics relevant to the overall company positioning/messaging.

The concept of ‘content teams’ is not new - however now marketing requires these teams to hold responsibility for creating content across multiple digital channels, including:

  • Blogs
  • Various digital media channels the company chooses as most relevant to its activity (Facebook, Linkedin, Twitter, Pinterest, YouTube, Slideshare)

Community Management Team

This team is responsible for monitoring the dialog that occurs online in social communities about the company, its products and related topic areas. It is this team that also attempts to engage with the community surrounding the company and the segments it plays in. Additionally they manage the dialog and information created by the content team, disseminating it to the most relevant groups/individuals. Some of the specific tactics include:

  • Listening/Monitoring communities and individuals for engagement opportunities
  • Influencer Outreach
  • Building and nurturing relations with analysts and traditional media members
  • Creating and maintaining company-wide ambassador and executive programs, in which company executives utilize the various analytical and monitoring tools to engage in relevant online dialog

Additional Digital Teams

There are a gamut of additional digital and traditional teams necessary for all other activities within the marketing function such as

  • Developing and maintaining brand identity (online and offline)
  • Ensuring strong user experience
  • Internal collateral development (online and offline)
  • Running events (online and offline) from conferences to Webinars
  • Paid media

For a more granular (and accurate) breakdown, you ought to read this great post from Redpoint.

Considering this as the current structure of a strong marketing team, there are a variety of mechanisms to arrive at staffing and expenditure specifics for the business. As a way of dealing with the non-specificity of the scenario I am going to use a very rough rule of thumb in which we map the staffing specifics and funds spent on content and paid media, etc., as a function of the total marketing spend rather than the needs of the business - and again, your mileage may vary.

A variety of authoritative sources suggest to consider marketing budgets for companies as a percentage of overall revenue (Marketing Budget Ratio - MBR). According to Gartner, in 2013, companies spent on average 10.7% of their revenue on marketing.

So, lets take a $100M a year business as a specific example. Marketing will represent a total expense of approximately $10m, that will include marketing technology tools and data, staffing, content, paid media, sponsorship, events, etc.

Here is a rough break down of the marketing spend:

  • Tools and data: 20%
  • Staffing: 40%
  • Content: 10%
  • Placement (i.e. paid media): 20%
  • Other: 10%

With that in mind, let’s drill down into the people that are part of the equation here, in my view the most important part. Get the people in the right roles and things have a way of working themselves out!

The following staffing perspective comes from a person who has spent the bulk of their career in technology oriented companies of one type of another, and where ‘flat, autonomous’ type staffing structures tend to be the norm: 40% of $10M equates to $4M in staffing giving a marketing team (based in San Francisco) of approximately 30 people including:

  • Management (2)
  • Ops & analytics (8)
  • Marketing Automation Team (4)
  • Content Team (6)
  • Community Management Team (6)
  • Additional Digital Teams (4)

I realize there are some huge assumptions at work in this sketch and that all companies differ in specific needs. That’s why they need a CMO who can determine exactly what that company’s version of all this is. He/She is faced with the solving of a very complex equation: needs + technology + market specifics + people = a model that works effectively for the unique business goals.

For those CMOs embarking on this planning exercise I hope this was useful. For the CEOs trying to understand what their CMO is wrestling with, hopefully this provides some clarity!

Your feedback is welcomed - the comments are all yours.