Diving brief:
- Marketing leaders continue to take on more tasks, including those related to generative artificial intelligence (AI), but only 27% believe their organization is well equipped to handle their expanding mandate, according to new data from a McKinsey survey.
- Brand building is a top priority for marketers, cited by 87% of respondents, but only 58% believe their company is mature in this area. Similar gaps prevailed for developing comprehensive marketing tactics, clarifying success metrics, adjusting budget allocation, and defining a 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%) . Failing to resolve these pain points could mean brands miss emerging opportunities.
Dive overview:
McKinsey contributes to a growing body of research that indicates Marketing directors are being asked to do more with less while facing long-standing organizational pressures and the emergence of new technologies. The consulting group surveyed more than 100 marketing decision-makers, including CMOs, growth leaders and brand managers, from leading consumer packaged goods and retail brands across North America and Europe to obtain its conclusions.
Brand building, a function traditionally carried out by CMOs, remains a top priority and has seen a sort of rebound in 2024 after an excessive shift towards lower-funnel performance marketing over the past few years. Other conventional areas of business, such as content, creative, consumer insights and communications, are now considered table stakes by a majority of respondents, according to McKinsey.
But the mandate of CMOs has expanded significantly amid the rise of channels like retail media and a changing, fragmented image of the consumer. Buyer insights and promotions are now managed by almost two-thirds of marketers (63% and 61%, respectively), while pricing is managed by 35%. Retail, F&B, and Consumer Goods verticals are all facing increased price sensitivity of consumers who are suffering from a period of inflation, a factor that will likely influence holiday marketing campaigns.
Tracking marketing success – and clarifying which KPIs are most important – is also a challenge. Rigorous marketing performance management is considered essential by eight in 10 McKinsey respondents, but only four in 10 were confident in its execution.
Other tasks falling under the CMO 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 in any meaningful way after nearly two years of hype.
When asked to identify use cases for generative AI, 39% of marketers highlighted creative effectiveness, while large-scale personalization and media optimization were cited by 28%. A fifth are experimenting with customer experience improvements through channels such as search and chat and 22% are trying to automate marketing activities.
Previous estimates from McKinsey suggest that generative AI could unlock $463 billion in marketing productivity value annually, and 74% of CMOs view the technology as an opportunity rather than a risk. That said, only 5% of marketers are actually developing their generative AI capabilities and only 4% are scaling use cases. Consumer reaction to generative AI has also intensified due to messages and technological missteps.
While many in the industry are still learning the ropes of burgeoning technologies like generative AI, the big constraints outlined by McKinsey sound familiar: lack of budget support, talent, and cross-functional collaboration have been sensitive points for notoriously short-term businesses. CMO for years.
