Diving:

• Marketing leaders continue to take on more tasks, including those related to generative artificial intelligence (AI), but only 27% believe their organizations are well-equipped to handle the expanded mission, according to new survey data from McKinsey.
• Top of the agenda for marketers is brand building, cited by 87% of respondents, but only 58% believe their companies are mature in this area. Similar gaps were prevalent for developing comprehensive marketing tactics, clarifying measures of success, aligning budget allocation, and defining creative strategy.
• Barriers to success include internal silos (cited by 36%), lack of desired budgets for marketing activities (34%), insufficient internal talent (32%) and inconsistent strategic vision (32%). Failure to address these points of tension could mean brands miss out on emerging opportunities.

Diving Perspective:

McKinsey contributes to a growing body of research that indicates CMOs are being asked to do more with less while dealing with long-standing organizational pressures and the emergence of new technology. The consulting group surveyed more than 100 marketing decision makers, including chief marketing officers, chief growth officers and chief brand officers, from major CPG and retail brands in North America and Europe for its findings.

Brand building, a function traditionally handled by the CMO, remains a top priority and has we saw something of a comeback in 2024 after a shift in recent years towards down-channel performance marketing. Other conventional areas of business, such as content, creative, consumer intelligence and communication, are today seen as table stakes by most respondents, according to McKinsey.

But the CMO’s mission has expanded considerably amid the growth of channels like retail media and a changing and fragmented consumer picture. Buyer prospects and promotions are now driven by nearly two-thirds of marketers (63% and 61% respectively), while pricing is managed by 35%. However, they deal with the retail, restaurant and CPG sector increased price sensitivity from consumers who are battered by a period of inflation, a factor that will likely influence holiday marketing campaigns.

Tracking marketing success – and clarifying which key performance indicators matter most – is also a challenge. Rigorous marketing performance management was seen as a must by eight out of 10 McKinsey respondents, but only four out of 10 were confident in their execution.

Other tasks under the CMO umbrella include design (cited by 46%), sales and e-commerce (34%), product innovation (24%) and generative AI (22%). The latter category is positioned as transformational, but has not materialized significantly after nearly two years of hype.

Asked to identify use cases for generative AI, 39% of marketers indicated that it drives creative efficiency, while personalization at scale and media optimization were cited by 28%. A fifth are experimenting with improving the customer experience through channels such as search and chat, and 22% are trying to automate marketing.

Previous McKinsey estimates suggest that generative AI could unlock $463 billion in annual marketing productivity value, and 74 percent of CMOs see the technology as more of an opportunity than a risk. That said, only 5% of marketers are actually building their generative AI capabilities and only 4% are scaling their use cases. Consumer reaction to generative AI has also had intensified by messaging and technological missteps.

While many in the industry are still learning the ropes of emerging technology like generative artificial intelligence, the broad constraints highlighted by McKinsey are familiar: Lack of budget support, talent and cross-functional collaboration have been a short-lived pain point. – CMO holders for years.