Daybreak - CMOs are a dying breed. Nykaa, Nestlé India, and others are living proof

Episode Date: November 11, 2024

Last year, Nykaa decided to reshuffle its marketing structure after the company’s previous Chief Marketing Officer (CMO) exited the company.  Instead of immediately filling the spot, Nykaa decided to break the role apart and have two marketing heads. One to look at performance marketing – the more technically, data-driven side of e-commerce, and another as the head of organic marketing – the creative, freewheeling stuff. The move sent out a clear message: a singular CMO is no longer necessary. This isn’t exclusive to Nykaa. Several online-first companies – Firstcry, Ixigo, Yatra – have been running without a CMO. But for decades CMOs have been seen as the charming, confident face of the company responsible for all things brand-building. What's changed? Tune in. Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcasts, you've probably heard me, my interruptions, my analogies, and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too. It's for a special announcement. For the last few months, I and Sita Raman Ganeshan, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission.

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Our number is 89711, I'll say that again. 89711-0-8379. We'll also add it to the show notes of this episode. Thank you in advance, and now on to the episode. Last year, NICA decided to reshuffle its marketing structure. You see, the company's previous chief marketing officer, or CMO, had exited NICA. But strangely enough, the company did not immediately fill the spot.

Instead, it decided to break the role apart. So now it would have two marketing heads. One person would look at performance marketing, which is the more technical, data-driven side of e-commerce. And then there would be a head of organic marketing. Now, this is marketing in the conventional sense, the creative flea-wheeling stuff. But one more thing was made quite clear.

When a big decision needed to be made, it would be left to Nika's chief executive Falguni Nair. So there wouldn't be one person taking care of every aspect of marketing like there was before. Now, you are probably wondering why we're talking about an internal staffing decision at NICA. Well, while on the surface, it may seem like nothing out of the ordinary. In reality, it points to a much larger trend. You see, the move sent out a very clear message that a singular CMO is no longer necessary. And this trend isn't exclusive to Nica.

Several online first companies, the likes of First Cry, Ixigo, Yatra, have all been running without a CMO. This is a pretty big change. You see, for decades, CMOs have been seen as that charming, confident face of the company responsible for all things brand building. They were also in charge of a brand's cultural relevancy. I mean, I'm sure you remember some of the iconic jingles and slogans from back in the day, like Kingfisher's iconic divided by teams united by Kingfisher campaign.

It literally became synonymous with cricket fandom. That's the kind of influence that a CMO had. But the days when a CMO was considered the beginning and end of a brand strategy have come to an end. Is it because companies don't care about marketing anymore? Well, we all know that that's not the case at all. Just look at NICA, for instance. Its marketing spend has only increased over the years. Its annual reports show that it is now touching 12% compared to a measly 7% in FY21.

So it's not budget constraints that are pushing companies to rethink the role. People in the space say it's because marketing has fundamentally changed. Samar Singh-Shikharat, a sales and marketing veteran, says it's because companies don't seem to care as much about long-term brand building anymore. In fact, he says that the interpretation of marketing and brand building has been bastardized off late. In his words, it's been diluted into buy-to-get-one free kind of offers. The thing is, other people say that that's exactly why a CMO role is more important now than ever before.

As digital spaces get noisier, effective marketing is exactly what brands need to drive revenue and growth. So, where does the CMO fit into all of this? Welcome to Daybreak, a business podcast from the Ken. I'm your host, Rahil Filippos, and I'll be joining my colleagues Nikita Sharma every day of the week to bring you one business story that is worth understanding and worth your time. Today is Tuesday, the 12th of November.

The Ken reporter Debanjali Biswa spoke to multiple CMOs, former and current, to understand how marketing has evolved and where they stand in the larger scheme of things. Prasun Kumar, CMO and business head of property tech giant magic pricks, painted a pretty grim picture. He said that 10 years ago, he aimed to tell a story in 60 to 30 seconds. But now it's only half of that. Marketing has grown far beyond just TV and billboards, were bang in the middle of the digital age.

And you know what that means, shrinking attention spans and evolving browsing habits. To keep up with all of this, a CMO is expected to not just be creative, but also have solid technical jobs. In fact, Kumar says they very often have to do the job of the chief technology officer or CTO as well. A couple decades ago, the scenario was vastly different.

Just asked Narayan Sundara Raman. He's the former CISO. CMO of automaker Bajajato. He has over 30 years of experience in sales and marketing, so he's had a ringside view of the ebbs and flows in the industry. Back in the day, it was the qualitative voice of the consumer that mattered most to the company. Today, he says, companies fail to bring that to the table at all.

This is an information economy after all. And here, only data matters. But he calls this an illusion, the belief that having a lot of data means having having a lot of useful insights. They assume that the qualitative stuff that you get from actually interacting with consumers is just too abstract. And that, he says, is a massive lapse.

The prime example is the rise of quick commerce in India. Let me explain. You see, for a long time, traditional e-commerce platforms said that the quick commerce model was just unfeasible. And then the likes of Zepto, Blinket and Swiggy Instamart came in and completely changed the game. The thing is, these companies finally recognise the consumer's overlooked pain points. I'm talking about long commutes and time invested in grocery shopping. Data-focused GMOs were just too absorbed in short-term growth metrics,

which meant they missed these insights. And that, Narayan says, is because they neglected the basics, directly engaging with users. A lot of people in the space say that the biggest problem is these metrics, this abundance of data. CMOs are flooded with information, but very often they just don't know what to do with it all. The consumer's voice in the process is completely lost. Now, this data overload also tends to create a false sense of urgency.

CMOs have weekly sales reports and quarterly results to constantly think of, and in the process, they feel pressure to react rather than plan. Stay tuned. Hello, it's Harry here. I'm a podcast producer here at the Ken. I just wanted to quit. quickly tell you about another one of our shows that you might enjoy once you're done with daybreak. If you've heard of 2x2, our premium podcast, then you already know it's packed with deep dives into some pretty exciting topics.

Most episodes are only available to our premium subscribers, but every now and then, we unlock a few episodes for our basic and free subscribers as well. Recently, we've unlocked episodes where we talked about the disruption needed in India's health insurance sector, what Netflix should do to truly succeed in India, and Ether Energy's energy's energy. strategy to dominate the AV2 wheeler market. And this week we've unlocked an episode where host Rohan Dharma Kumar and Praveen Koppelakrshan chat with two super experienced product managers, Chandrshika Vertikuti, CP of Inmobi and Shreya Srinuwasan,

CP of Paytm and founder of Paytm Insider. They discuss the existential threat that product managers face today and what needs to change to make product management one of the most exciting roles in Indian startups again. The episode is available right now but only for a limited time. So I'd recommend checking it out while you can. You'll find the link in the show notes

and I'd definitely suggest downloading it if you're interested. Okay, back to Rahal. Back in the day, CMOs were integral to product development. Not just that, they also had a role to play in operations, technology departments and just overall brand building.

They played a key role in tying all of these aspects together. But now, particularly in digital first companies, these functions tend to work in silos. And as a result of that, the CMO's influence on the product or service has eroded. The thing is, without control over the product, CMOs are no different than an in-house communications team.

Sima Chavala, who works as a business consultant and fractional CMO, says that today the four piece of marketing are all handled separately. And by that I mean product, price, place and promotion. The marketing head exclusive. focuses on the fourth P promotion. And this ends up diluting the authority a CMO once wielded. Like I said before, the CMO today needs to be a lot more than just creative. They need to have a techno-commercial mindset.

Companies want CMOs that can drive revenue growth too. They have to manage multiple channels and use consumer behavior and experience data. But Chavla points out that there is a fundamental contradiction at play here. If the CEO expects the CMO to make ads that will change the company's fortunes, then it is important for the CMO to have some sort of influence. In other words, there needs to be a clear mandate for collaboration with operations technology and product development, which is a connection that's very often missing today. The shrinking role of the CMO as a central marketing figure is also evident in the leadership

structures of many consumer-focused companies. For instance, several traditional FMCG jobs. giants in India like Nestle, India and HUL have shifted from a CMO model to a pointing marketing heads specific to business units. Plus, many companies that have gone public in recent years have chosen to forego the CMO role altogether. Now, this disconnect between high expectations and little to no control has led to a high attrition rate among CMOs. A decade ago, they typically stuck around at a company for five to eight years. But today, they are looking for new opportunities every 18 months or so.

On a related note, there is yet another contradiction on the hiring side of things. Generally, the only people who can meet the seemingly unrealistic demands of the CMO role today are industry veterans who have built expertise and gained consumer loyalty through experience. But today, most companies are looking to hire young talent who they believe can understand how tech integrates with marketing.

Raj Rishi Singh, make my trip's chief marketing and business officer, estimated that earlier people needed 25 years of experience on average to qualify for CMO roles. Now, many people with around 15 to 20 years under their belt are able to become CMOs, especially in companies where the role is narrower and focused exclusively on branding. But these young CMOs don't have the exposure or experience to handle full-stack roles. In response to this trend, a lot of industry veterans are opting to go independent. They're taking the fractional CMO route,

where they collaborate with startups and companies for a limited period of time as and when required. It's a win-win, really. Start-ups generally need seasoned expertise to build their brand or train their marketing teams without the commitment of a full-time hire. And meanwhile, these independent consultants escape the internal bureaucracy

and enjoy more creative freedom and often better pay. So where does that leave the traditional CMO role? Well, they've not completely faded away into obscurity yet. But one thing is clear. Only those who adapt and straddle the mix of traditional and digital marketing will be able to make it. Daybreak is produced from the newsroom of the Ken

India's first subscriber-focused business news platform. What you're listening to is just a small sample of our subscriber-only offerings. A full subscription unlocks daily long-form feature stories, newsletters and podcast extras. Head to the Ken.com and click on the red subscribe button. on the top of the website. Today's episode was hosted by Rahil Filippo's, produced by me Snigda Sharma and edited by Rajiv Sien.