Tomorrow's best CMOs won't be the ones who measure marketing better. They'll be the ones who understand the entire commercial system.
I enjoyed reading recent Business Insider article "How 6 top CMOs like Coach's Joon Silverstein are working to optimize their brands for AI platforms" by Lucia Moses. She argues that today's CMOs are evolving beyond advertising and communications into leaders responsible for enterprise growth.
I couldn't agree more.
The challenge is that many organizations are still trying to answer enterprise questions with models built to optimize individual marketing activities. Those models produce valuable insights, but they rarely explain how the entire commercial system works together.
Every media investment shapes customer behavior across a series of different conversions on the purchase decision journey. Those interactions form a system that ultimately determines the business outcomes.
As Jeff Greenfield has repeatedly said, "Systems thinking begins the moment you stop asking which lever performs best and start asking how every lever changes the system."
That idea sits at the heart of Agile Insights Modeling (AIM) that Provalytics clients use to measure the impact of their marketing investments at most granular level.
Rather than evaluating one investment at a time, AIM simultaneously models multiple marketing or commercial investments, multiple customer responses, and multiple business outcomes to understand how growth is actually created.
Just as importantly, it separates incrementality from organic customer response.
Not every sale following an investment was caused by that investment. Some customers would have purchased anyway. Others simply shift purchases between existing products, channels of distribution, or purchase cycles.
If we don't separate those effects, we risk optimizing activity that merely redistributes demand instead of creating it.
This is key because Executives don't make decisions based on elasticities, lift coefficients, contributions, or other modeling language.
They make decisions based on expected business outcomes.
- Will this create new buyers?
- Will it increase purchase frequency?
- Will the transaction size grow?
or ... will it simply replace organic volume a brand was already going to receive?
Those are system questions, not marketing questions.
The organizations that learn to separate incrementality from organic customer response across their entire commercial system will consistently make better commercial decisions than those optimizing one lever at a time.
That's the difference between measuring marketing and understanding growth.
Cheers
Todd