Mintel Comperemedia Looks at Financial Service Mega-Trends

In a Mintel Comperemedia presentation recently, Economic Psychologist, Susan Menke, PhD. presented the trends that are expected to have the greatest impact on consumer financial behavior and the banking industry during 2010. Based on tracking of direct marketing programs during the last half of 2009, the following predictions were made:

• The end of Free Checking: Banks such as Fifth Third and BBVA have already eliminated the account while Free Checking leader TCF announced the end of their Free Checking program at their investor meeting this week.
• Explosion of reward banking: The decline in Free Checking will most likely result in an increase in checking programs with rewards, especially in light of the increased importance of direct deposit, online bill payment and debit card interchange.
• Account builder program introductions: Following the trend started by 'Keep the Change', 'Way2Save' and PNC's 'Virtual Wallet', automatic transfers from checking to savings and the linking of credit lines to checking will be two ways to expand relationships beyond a single service.
• More aggressive debit card marketing: The importance of interchange income to the financial viability of many relationships will lead to many more debit card activation and utilization promotions in 2010.
• Cash will continue to be king of offers: The offering of cash incentives for opening new accounts ramped up in the latter part of 2009 after a short hiatus. Chase continues to offer different bounties ranging from $100 to $200 and more with many other large banks following.
• Increased popularity of prepaid cards: While larger banks have not yet focused on prepaid cards, changes brought on by Reg E may change the way banks serve the underserved and unbanked segments.
• Expansion of mobile banking: There are still several large banks that have only rudimentary mobile banking initiatives while others such as Bank of America, Wells, USAA and Chase have created innovative iPhone Apps. The financial incentive to move more expensive transactions to the mobile channel and the rapidly increasing acceptance of smart phones is expected to fuel rapid growth of this channel.
• Proliferation of financial literacy programs: Customer experience research for years has indicated the importance of being more transparent, building trust and educating customers on how to make informed financial decisions. Mintel believes that 2010 will be a watershed year for banks to use customer advocacy as a competitive differentiator.
• Increased use of social media sites: The popularity and growth of social networking sites has made it impossible for financial institutions to sit on the sidelines. One firm is offering a service where customers can receive alerts through social networking sites rather than email while many banks are using these sites for enhancing or reinforcing their brand. Twitter is also used to broadcast changes in rates and to introduce new products.

Unlike 2009, where most banks significantly scaled back marketing efforts and were on the defensive, proactivity seems to be the norm in 2010. Product innovation, changes in pricing models, utilization of new channels and an increased emphasis on the customer experience will definitely put the spotlight on marketing.

Online and Social Media Emphasis Grows

As the focus on marketing spend is magnified and marketers are asked to do more with less, marketers are continuing to increase their online and social marketing strategies, according to the CMO Council's 2010 State of Marketing report.

The global affinity network, which surveyed 600 of its members from across the world and representing most industry verticals, found that 46% of its members ranked investing in digital demand generation and online relationship building as a top initiative for 2010. The survey also found that 62% will be crunching customer data to improve segmentation and targeting. Most of the respondents plan on doing much of the heavy lifting internally or by specialized outsourced providers.


The survey also saw a significant uptick around online channel integration and multi-channel offerings that deliver the brand promise consistently across online, mobile, in store, and traditional channels.

The challenge for bankers and non-bankers alike will be to find the skill sets to successfully implement these strategies. With only 6% of those surveyed rating their online marketing performance 'excellent' and the majority trying to grow their capabilities, finding people with a successful track record is difficult.

Mobile Banking Summit Illustrates Topic is Hot

You don't need to look any further than the attendee list to realize the importance of mobile banking to our industry. Not only is almost every major institution in attendance at this year's Mobile Banking and Emerging Applications Summit, but the number of participants has increased by more than 50% according to officials from SourceMedia.

The program kicked off Sunday with a workshop by David Eads, Founder & CEO of Mobile Strategy Partners LLC where he discussed the basics of getting a Mobile Banking strategy off the ground. He also shared the first of a wave of industry statistics that made it clear to the SRO attendees that this year and next will be pivotal to the mobile banking industry. He also shared keys to developing a business case for introducing mobile banking. He emphasized that while cost reduction (mainly from offloaded balance inquiry calls) could many time justify the investment in mobile banking by itself. a drop in attrition and an increase in revenue from increased interchange and cross-sales will also improve the ROI.


A parade of speakers including Pam Joseph and other players from U. S. Bank, Bob Hedges from Mercatus, several panel discussions, and Jeff Dennes from USAA provided an amazing array of customer research, case studies and predictions for the future of this channel. During the U.S. Bank presentation, there was discussion of a new Mobile Shopping Concierge application where coupons, offers and even store layouts may be provided and the discussion of upcoming introductions of both a Remote Deposit Capture application as well as a P2P application (probably the most discussed new application of the day from many organizations including Bank of the West).

The best line of the day came from Bob Hedges, who began his presentation of a ton of industry research by saying, "Making a business case for mobile banking is like making a business case for oxygen"! One of the more unusual moments came from 10-11 AM PT, when it was obvious many in attendance were using their phones (and a surprising number of iPads) to get immediate updates on today's speech by Steve Jobs. Another helpful use of phones came throughout the day when pictures were taken of the slides in the presentations  by many since SourceMedia does not include the presentations in the conference materials, and then only partially share presentations 2-3 weeks after the event.

I will be digging much deeper into my notes over the next couple days to share insights from this great conference that ends tomorrow. In addition to key research, I will be sharing marketing ideas that were discussed as well as significant trends that we will probably see in 2010 and 2011.

By the way, for those unable to attend, the location of the conference was at the M Resort which was beautiful, but seemed like it was in LA due to the distance from the strip and the temperatures today approached 110 degrees. So yes, the conference was HOT!

Differentiation Is Key Component To The Value of Rewards

Yesterday, it was announced that merchant-funded rewards leader, Cardlytics had signed a global strategic alliance with loyalty leader Groupe Aeroplan allowing for the expansion of transaction-driven marketing (TM) to Canada and abroad.

Unlike traditional rewards programs used by financial institutions that are points based and driven by the volume of transactions processed, the Cardlytics platform provides the ability to present highly targeted retailer offers to customers through a bank's online statement, mobile device or email based on the customer's recent transaction activity. Since the Cardlytics decisioning tool resides within the bank's firewalls, customer insight never leaves the bank and retailers never have access to proprietary customer information. In addition, as opposed to the points reward program being a cost to the bank, the Cardlytics pay-for-performance model not only eliminates risk for the merchant, but also can provide much needed revenues for the partner bank.

The Cardlytics solution has been so well received, that as many as 70% of U.S. households could have such a program tied to their bank's debit and/or credit card relationship by Q1 of 2012, according to Scott Grimes, Cardlytics' CEO. This amazing growth and acceptance begs the question . . . if all the banks have the same program, how can differentiation be achieved and maintained?

In an interview with Lynne Laube, President and COO of Cardlytics earlier this year, I asked her how banks can leverage the Cardlytics platform and retail partnerships beyond simply offering the same offers as the bank down the street. She explained that while most bank clients will have many of the same nationwide retail partners, there will the capability to offer significant regional or even local offers. While some of these merchant partnerships might be initiated by Cardlytics, individual financial institutions can also link retailers to the platform.

For industrious financial organizations, the ability to offer current or prospective corporate, commercial or small business clients with highly targeted audiences who are prone to buy their products could be a strong business development and retention strategy for calling officers. It also would differentiate the bank's reward program from others across the country. By expanding the program's merchant partnerships, the retail and small business customers will also receive more targeted offers, making the program more valuable to the customer.

Another way a bank can differentiate a merchant-based rewards program will be to expand the channel integration of the merchant offers. Beyond simply providing the targeted offer as part of online statementing, the individual bank's ability to seamlessly integrate the offers into email, SMS alerts and even mobile channels will increase customer engagement and loyalty. Leveraging GPS capabilities could enable customers to receive onsite rewards at merchants they frequent or merchants within a defined radius.

According to an eMarketer study released today, while mobile coupons still represent a small portion of digital promotions, popularity and usage is growing at a rapid pace. It is believed that mobile couponing may grow by as much as 80% over the next two years fueled by the growth of smartphone users. Banks' ability to take advantage of this mobile trend will be the foundation for future rewards program growth.

Potentially most powerful from a differentiation perspective, Laube mentioned that insights from ongoing transaction monitoring can provide valuable behavioral insights that can assist in customer and household segmentation and even financial product cross-selling. Banks could leverage merchant rewards as a 'virtual currency' for different segments of customers or could provide merchant offers as an incentive for consolidation of relationships. As banks begin to introduce more advanced PFM and other money management tools, this type of rewards platform can also be integrated into the customer dashboard.

In a world filled with offers from Groupon, Living Social and more than 600 other competitors, the marketplace for untargeted offers may be reaching a saturation point. According to research firm, Lab42, while 44 % of households use deal websites, 55% feel overwhelmed by the number of offers filling up their email box. Given this mixed landscape, the ability to provide highly targeted, timely and valuable offers will be the key to effective differentiation.

What do you think?: How else do you think banks could differentiate themselves using merchant-funded rewards?

Marketers Not Aligned With Consumer Marketing Channel Preferences

Technology is rapidly changing the way consumers interact. We wake up each day to a barrage of messages coming from both traditional and new media. We check our Facebook posts and text messages at the same time we watch television, read the newspaper, listen to the radio or conduct work online. 

Marketers have long recognized the shifts in media consumption that are redefining how customers absorb information and offers. However, recent studies indicate that marketers may not be in total alignment with consumers as to how the new media is consumed and their degree of reliance on various media for making buying decisions.

A new research study by Acxiom entitled, Tug of Love: The Changing Relationship Between Consumers and Brands found that more than four in five people (82%) believed they were in control of the relationship between themselves and their brands (with 'control' being defined as receiving the information they desire, when and through the media they want). This was more than 50% higher than marketers thought, indicating that 'push' broadcast marketing is quickly being replaced with 'pull' marketing where the individual is in charge of message consumption.


Interestingly, the perception of having the ability to filter messages that were either inappropriate or not of personal interest increased with age, possibly due to less messages being sent using electronic channels and due to improved targeting available for older households. Older households also benefit from having longer relationships with their brands, resulting in less bombardment of messages occurring.

Despite feeling in control, however, one in four households still say they receive 'inappropriate' marketing communications, while marketers feel they do a better job of targeting. Even with this ability to screen messages, only 27% of consumers believed their brands understood them or communicated with them appropriately. The good news is that some of the best numbers were recorded for financial services communications, even though less than half believed they were understood and communicated with well.

One of the most surprising findings in this study and in a recently published study from the European Journal of Marketing entitled, Comparing Perceptions of Marketing Communications Channels (Vol. 45, No. 1/2, 2011, pp 6-43), was that although email is well established and widely used by marketers, the traditional channels of television, radio, newspapers and to a significantly greater degree, direct mail retain historically favored attributes of trust and reliability. Conversely, some of the newer media such as SMS and mobile received much lower rankings than marketers believed they would, making these channels less powerful or accepted by consumers of any age category. In fact, direct mail was reported by both customer and prospect groups in both studies as being in the top two marketing channels preferred next to email.

In the Acxiom study, 71% of current customers cited direct mail as an appropriate way of reaching them, with 57% of prospects preferring direct mail. These acceptance ratings were far above what marketers thought who were asked the same question. Only 35% of marketers thought prospects would welcome direct mail. They were much closer with customer perception, noting that they believed 75% would be positive about direct mail. Email acceptance was 77% for customers and only 52% for prospects, still significantly higher than other newer media. In fact, only 12% of consumers felt mobile advertising was appropriate, with the figure for SMS being only 9%. As could be surmised, marketers believed the acceptance rate on these media options would be much higher. Despite the industry focus on and massive growth of interactions through social media, only 4% of consumers wanted to be reached using these channels.

Customer Acceptance of Alternative Marketing Channels (Acxiom, 2011)

Prospect Acceptance of Alternative Marketing Channels (Acxiom, 2011)

The European Journal of Marketing study dug deeper into the perceived attributes of the different media channels as determined by both the sender and recipient. As could be expected, channels that were considered annoying or irritating included SMS, phone, door-to-door and email. Consumers found direct mail to have the qualities of being informative, reliable and trustworthy, while they found most mass marketing to be informative and enjoyable.

Perceptual Mapping of Marketing Channel Attributes - Recipient (European Journal of Marketing, 2011)

'Senders' as defined by the study had a pretty close correlation with recipients regarding most marketing channels except they viewed email in a significantly more favorable light than consumers. Part of this bias may be caused by the lack of measurement between the stages of clicks and consumption of the email opened. The chart below illustrates the perception of the senders of marketing messages on the same dimensions as the above graph.

Perceptual Mapping of Marketing Channel Attributes - Sender (European Journal of Marketing, 2011)

Regression analysis found, not surprisingly, that a marketing offer is more likely to be successful if the recipient regards the information as important. In addition, higher involvement with the product or service is also more likely to result in greater engagement. Finally, it was found that receivers are more likely to be persuaded by the marketing offer in a particular channel if they find communications in that channel to be enjoyable and entertaining, and if the channel that has a reputation for reliable information. Again, this illustrates why some traditional channels such as direct mail and, to a lesser degree, email continue to perform well.

While the Acxiom study was conducted in Europe and the European Journal of Marketing Study was conducted in Australia may impact the specific numbers, but most likely dramatically change the trends found. Both of these studies and a recent white paper published by The Winterberry Group entitled, The Multichannel Revolution: New Media, New Approaches, New Opportunities also emphasized that no single channel strategy will be enough in today's multichannel world. Instead, marketers need to develop a long‐term, audience‐driven multichannel strategy, gaining insight into customer attributes, demand drivers and response cues that are the key to optimal budget allocation.


Finding that right balance of media (and having the courage to respond quickly to its changing dynamics) will
prove essential to growth in tomorrow’s competitive marketplace.

I would like to hear from you. How is your bank's media mix changing as you plan for 2012 to reflect changing media consumption patterns, shrinking budgets and greater emphasis on ROI?

Bank Marketers Face Challenging Times With Great Opportunity

After two years of responding to government intervention into the revenue structure of financial organizations, bank marketers are now faced with heightened levels of competition, a more demanding customer base, an unfavorable rate environment and, in many cases, a shrinking budget. But potentially most challenging to financial institution CMOs I meet in my travels is the ability to respond to the shift in the ways we interact with customers and prospects.

The flood of data, channels, devices and changing consumption patterns have marketing departments in financial organizations of all sizes trying to determine if they are prepared. They are reviewing the skills sets that will be required to take advantage of the opportunities these challenges present, and realizing that gearing up may require a heightened level of personal engagement from all members of their team.

These challenges are reinforced by a set of studies that I recently reviewed that surveyed marketers from all industries. IBM's 2011 Global Chief Marketing Officer Study entitled, From Stretched to Strengthened found that the majority of CMOs feel unprepared when it comes to the explosion of data available (71%), the impact of social media (68%) the growth of channels and devices (64.5%) and the movement from mass markets to micro markets (64.5%).

More importantly, several of the areas where CMOs stated they were least prepared were also those they believed would be the most important for their businesses. As shown below, each of the top four areas of preparedness gap are also in the quadrant where the impact on the marketing function was thought to be the highest.

Preparedness vs. Impact on Marketing Comparison - IBM CMO Study, 2011

But while there were many references to the growing analytical side of online measurement and monitoring in the IBM study, only 26% of CMOs surveyed track blogs, 42% track third-party reviews and 48% track consumer reviews. The need for a much better understanding of ROI was referred to many times in the study, going as far as saying that the CMO of today is in position similar to that of the CFOs 10 years ago.

Turning data into action was also the primary organizational issue in Unica's Annual Survey of Marketers, with the need to harness the power of the mobile device and to leverage the potential of truly integrated marketing also ranking high. As with the IBM study, the Unica research indicated that there is a significant gap between desire and achievement, with much more progress needed in the use of insight for better customer communication and measuring the impact of efforts across channels.

Three Most Important Issues for Marketers - 2011 Unica Survey of Marketers

What was interesting about the Unica study was that, while social media definitely registered as the champion of emerging channels in terms of use (53%), the enthusiasm for the channel was less than in recent years, possibly signaling the desire to see more tangible results from efforts. This also seems to be true in the bank marketing industry, where many are questioning the financial impact of investments made in social media and wanting to connect 'fans' and 'follows' into leads and sales.

Just like most other industries, bank marketers are being tested daily during a period of unparalleled change and will be required to respond to these new market realities:

• The consumer is definitely in control of the business relationship, with the ability to shop with a click and change bank partners without ever confronting us face-to-face.
• While margins are thin and the tolerance for fees is low, delivering customer value is the table stake in the game both from a perspective of products offered as well as access afforded.
• There is a greater need for seamless integration of marketing channels with an eye towards both effectiveness and efficiency.
• Accountability for marketing investments has never been more important at a time when bank revenues are at a premium, with new tools for measurement and skills for assessment being leveraged.
• Each of the above realities will require a more robust and continuous level of testing as tools, approaches and consumer attitudes continue to change.

Over the last few days at the National Center for Database Marketing Conference, where hundreds of practitioners met to discuss current trends and share success stories from a variety of industries, one thing was clear . . . there is no silver bullet. In fact, most marketers are working hard to hone their skill sets in a very fluid environment.

The good news is that there are amazing solutions being developed daily to help marketers do their jobs more effectively. The bad news is that the change is continuing at a more rapid pace every day. To be effective, bank marketers will need to have both great learning agility and adaptability to 'what's next'.

What do you see as the biggest challenge facing your marketing department in the coming year? Is your team prepared for the changes ahead? What are you doing to prepare for the new marketplace?

I would love to hear your comments below.

The Art of Bank Innovation According to Guy Kawasaki

One of this year's keynote speakers at BAI's Retail Delivery Conference was Apple evangelist and innovation guru, Guy Kawasaki who is also the founder and CEO of Garage Technology Ventures. During his very engaging and at times irreverent presentation, Guy broke down the art of innovation into 10 easy -- and not so easy -- steps. He explained to the room full of bankers and industry service providers that while these steps should be followed, even he has not been able to always follow his own advice in his career.

1. Make Meaning - Great innovation occurs when a person/company decides to make the world a better place. Great companies are able to make meaning, and as a natural outgrowth, also make money. One of Guy's examples was Apple's development of innovative products that made the world more productive and creative. It was interesting for me to realize that most of the banks recognized in the Finacle/BAI Global Banking Innovation Awards this year developed products that actually improved the financial well being of their customers.


2. Make a Mantra - Not to be confused with a mission statement (usually developed by a committee facilitated by a person hired by leaders who can't lead), a mantra should be short, easy to remember and aspirational. Guy's example for Wendy's was "heathy fast food" while his recommended Nike mantra was "authentic, athletic performance". I wonder how many banks have a mantra that every employee can recite? My experience indicates that a clear mantra and clarity of purpose go hand in hand, and that this focus can lead to success and meaningful innovation.

3. Jump to the Next Curve - Great innovation does not occur when you simply try to improve what is already there, but when a firm looks beyond what is in place. According to Guy, most organizations start on a curve, stay on the curve and die on the curve. They do not move to next level. He suggested that banks should not view themselves in context of what we do today, but with an understanding of what consumers will want tomorrow. It took no fewer than a 5 minute walk for bankers to go from Guy's ballroom presentation to the Expo area which was filled with services and products that could assist in jumping to the next curve.

4. Roll the DICE - Are we creating something that is Deep, Intelligent, Complete and Elegant? According to Guy, these are the qualities of innovative products and services that jump the curve. While most products from Apple, Nike and other firms have these qualities, do bankers try to meet this criteria as part of their innovation process? Recent web site redevelopment from some of the largest banks indicates that they are rolling the dice.

5. Don't Worry, Be Crappy - Great revolutionaries don't wait for perfection. For instance, the first Apple computer was definitely innovative on many fronts . . . but it didn't have software or even color. Guy stated, "If companies wait for every element to be in place before a product or service is introduced, innovation won't happen." He added, "Perfection is the enemy of revenue." As I travel, I also see this challenge when banks try to decide which firm to partner with for new products and services. Sometimes, it is better to simply get the product introduced, and then use customer input to perfect the service.

6. Let 100 Flowers Blossom - Interestingly when innovation occurs, people you did not intend to be your customers will buy your product, and they may use your service in ways you did not intend. The key is to understand how these 'unintended customers' use your product . . . and take the money. While Guy presented the example of Skin So Soft (a moisturizer that became more well know as a bug repellent), my example is the PNC Virtual Wallet, which was initially intended as a Gen Y product, but where the appeal expanded beyond the expected demographics. 

7. Don't Be Afraid to Polarize People - Great products have people that love and hate the product. The worst scenario is that you have customers (or co-workers) that don't care about your innovation. If people don't understand your revolution in 10 minutes, they will never understand the reasons to buy your new innovation. Guy recommended that bankers should not intentionally polarize people, but added that great products always will piss some people off. In the banking world, it is better to be on the leading edge than to follow, especially as innovation is occurring so quickly. The challenge is to not wait for consensus.

8. Churn Baby, Churn - Guy stated that the biggest challenge is to shift from being evolutionary (small steps) to being revolutionary (big steps), where innovation is a continuous process of change as opposed to an end of it's own. Again, I will use the PNC Virtual Wallet as an example, where the developers of the product did not stop with a very innovative way to manage money online, but continued to add innovations such as mobile access, tablet access, new apps and integrated tools, etc. I also saw amazingly innovative improvements made by mFoundry this week on the Expo floor with their Fin.X mobile banking platform, allowing for additional delivery of revenue generating services in a cloud-based solution.

9.  Be Unique and Valuable -  It is imperative to build a niche for your product, where uniqueness drives value. Guy illustrated that development of a valuable service that is not unique brings price competition where recovering development costs is difficult. If we create a unique product without value, it is 'just plain stupid'. We will overwhelm systems and not add revenue if we build a service that is neither unique or valuable (Pets.com example). Therefore, the key is to innovate with an eye on developing a service that is unique with value (the top right corner). Interestingly, I think the biggest takeaway from this past week at the Retail Delivery Conference compared to previous years was the constant focus on building value and revenues. In the past, there were presentations that seemed to focus on innovation for innovation sake.

10. Perfect Your Pitch - While Guy admitted to not completely following his own advice here, he stressed the importance of following the '10, 20, 30 rule' where innovators should use 10 slides, presented in 20 minutes (even if you have an hour) using a 30 point font. He also suggested that an innovator customize their introduction and know their audience. I can guarantee that almost everyone in the audience (including myself) breaks this rule too often.

Finally, Kawasaki offered up a 'bonus' recommendation . . .

11. Don't Let The Bozos Grind You Down - He predicted that with every great idea, there will be those that believe the idea shouldn't be done, can't be done or it isn't necessary. Some of these Bozos where pocket protectors and are easily identified and some wear expensive suits and drive nice cars and have a large internal following. The latter group is more dangerous since they usually have more power. The key is to stay the course. Unfortunately, this challenge is prevalent in banking and is easy to simply accept. Are there innovations or even simple developments at your bank that are killed before they see the light of day because you have always 'done it that way'? 

I am hoping that the bankers and vendors in the audience took away as much as I did, and make it a mission upon return to work to try to follow as many of the ten steps as possible. I was pleased that I think my company does pretty well in most of the categories, but there is always room for improvement. I also sat in the session thinking about which banks do the best in several of the categories. Is your bank one of them? I would love to hear from both bankers and suppliers.

CMO Needs Stronger Alignment With CIO

Now more than ever, the Chief Marketing Officer needs to be a multi-tasker, with enhanced technological and customer analysis skills added to their traditional marketing, branding and advertising credentials. Reposted below is a recent Chief Marketing Technologist post from Scott Brinker that recaps a report from the Economist Intelligence Unit on this transformation of the role of the CMO.

The report, entitled Outside Looking In: The CMO Struggles to Get in Sync with the C-Suite is a global survey of 389 executives sponsored by SAS illustrating that marketing is in a period of great change, becoming more strategic, and that many organizations are not yet in agreement on what that means for the CMO's role and priorities.

One thing that I found particularly fascinating, however, were the results to the question: what skills are most important for CMOs to have? Respondents were asked to pick their top three:

What leaps out to me here is the emergence of data and technology as skills that are considered important for the CMO to possess:

• 27% report data-driven analytical capability in their Top 3
• 21% report technical expertise in their Top 3

I'm certainly an advocate for the marketing department as a whole acquiring these skills, and I strongly believe there should be a technology leader who works in the marketing department on behalf of the CMO. But for 1/5 of executives to now believe technical expertise is one of the Top 3 most important skills for a CMO to have is a huge testament to the growing realization that modern marketing is a technology-driven discipline.

To put this in perspective, only 13% of the respondents picked advertising/agency experience. This is effectively saying that technical expertise is nearly twice as important as agency experience for CMOs in the eyes of business executives. That suggests not just a shift in marketing capabilities, but a tectonic shift in marketing culture.

And the trend appears to be headed further in this direction. In a separate question, 40% reported that technical expertise is increasing in importance as a CMO requirement. 60% reported that data-driven analytical capability is increasing in importance.

To appreciate why technical expertise is becoming so important, consider the results to another question in the report: in what areas should marketing focus investments in order to contribute most to your business in 3 years?

Out of the 12 areas of investment reported, 2/3 of them revolve around technology: customer analytics, CRM, social media, mobile application development, reputation management, marketing automation, collaboration tools, and web optimization tools. These are a lot of different technologies to be selected and managed.

The conclusion of the report is short but poignant, summing up this transformation and why technology is so integral to it. So I'll quote it here in its entirety (emphasis added is my own):

The role of marketing was once easily defined: create effective mass-market advertising to increase brand awareness and loyalty. It was vague enough to allow marketing leaders to justify investments in "the brand" despite a lack of quantifiable results.

This approach no longer works in today's data-driven, personalized, customer-centric environment. The mass market has been parsed into discrete customer segments that require increasingly targeted messaging. Customers expect to be served through multiple channels, with a consistent experience across each.

The transition is proving difficult for many CMOs and their marketing teams. Many organizations remain in operational silos, which limit their ability to share data and insights and create a consistent multi-channel customer experience. And cultural perceptions of marketing's role, as our survey clearly shows, continue to inhibit its strategic ambitions.

To address this challenge, CMOs and senior leadership teams need to increase their commitment to investing in the skills, tools, and processes required to become more customer centric and insight-driven. Only then will marketing be in sync with the rest of the business and in a better position to serve as the catalyst of business growth.

Well said.

Additional Insight:

Outside Looking In: The CMO Struggles to Get in Sync with the C-Suite - Economic Intelligence Unit Report (2012)

Scott Brinker is the president & CTO of ion interactive, a company that delivers post-click marketing software and services. He is a marketing technologist with many years experience at the intersection of marketing, IT, software product development, and online networks. Scott is also the publisher of the Chief Marketing Technologist blog.