Amid tight budgets, talent concerns and disruption, CMOs focus on marketing organization and operations alignment.
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Rethinking Marketing Organization and Operations Excellence
Align the marketing organization and operations for greater efficiency and value
Marketing continues to face significant disruption. Linking the marketing organization to marketing operations is critical as CMOs navigate change to meet the growing demands of the business.
Download this eBook for insight on:
How marketing organization structures and responsibilities are shifting
How marketing is navigating challenges around talent retention and attrition
Near- and long-term actions CMOs can take to run a more effective, operationally efficient marketing organization
Equip the marketing organization and operations to deliver
In turbulent times, the marketing organization faces enormous pressure to demonstrate value. Successful CMOs streamline and equip their teams in four key areas.
- Organizational Design
- Capabilities Sourcing
- Agency Selection
- Operational Efficiency
Design an agile marketing organization that supports business objectives
The drive for marketing operations effectiveness and efficiency raises the question of how and where to centralize the marketing function.
Our 2022 Gartner Marketing and Communications Organization Survey revealed that 65% percent of marketing organizations have “fully” or “partially” centralized to meet prioritization, workflow and collaboration challenges. But only 27% of respondents describe their marketing organization as having hybrid structures — a mix of centralized and decentralized teams — that enable improved marketing operations control while also providing needed agility.
Step 1: Evaluate the trade-offs between centralized, decentralized and hybrid structures.
When thinking about how to redesign your marketing organization, keep in mind that one solution does not fit all — and every organizational restructure includes a degree of risk.
Centralized: Centralization refers to the concentration of management and decision-making power at the top of the organizational hierarchy. Strategy, planning, goal setting, budgeting and talent deployment are typically conducted at the direction of a single, senior marketing lead.
Decentralized: In decentralized organizations, formal decision-making power is distributed across multiple groups, regions or business units. Decentralization is more appropriate when marketing’s activities support local markets or when the company must respond quickly to changing or regionally differentiated customer needs.
Hybrid: Hybrid structures use a network of centralized and decentralized teams. What to centralize or decentralize is determined based on the role and objectives of each team. Hybrid structures blend the economies of scale of centralization with the agility of decentralization.
Step 2: Identify what to centralize or decentralize.
The first step in determining the reporting structure for any marketing organization is to understand its role, scope, objectives and associated workflows.
Weigh the importance of marketing operations efficiency, customer centricity and marketing effectiveness as you consider the pros and cons of centralizing or decentralizing the team. For example, a global VP of brand marketing would support corporate goals versus regional goals, which might support a decision to centralize. Conversely, a regional VP of marketing would need to incorporate local insights into campaigns, supporting the decision to decentralize.
Step 3: Select the best-fit operating model(s) for your teams.
Once you have determined what to centralize or decentralize, you’ll put together your network of teams to create a hybrid structure.
Shared services: Gartner defines shared services as a delivery model in which a shared services center, supported by dedicated people, processes and technologies, acts as a centralized provider of a defined business function for use by multiple enterprise constituencies.
Centers of excellence (COEs): Gartner defines a COE as a physical or virtual center of knowledge, concentrating expertise and resources in a discipline or capability to sustain or increase performance and value. The COE is focused on the development of new capabilities and provides training and scaling support for those capabilities to the distributed marketing teams.
Councils: Councils are a collective of representatives from each marketing division that meet on a regular or semiregular basis to discuss higher-level marketing needs, share best practices/lessons learned and ensure any relevant consistency across the different business units.
Decide how the marketing organization will resource missing capabilities
As customer journeys become more complex, CMOs must recruit and develop the associated skills in their marketing organization.
To determine how to resource missing capabilities, start by assessing what the marketing organization will need to execute against your strategic plan. Be sure to:
Include larger functional groupings of related job roles and specific skills or expertise that will support required deliverables
- Take time to collaborate with your leadership team to brainstorm, using current capabilities as a baseline to build from
Functional capabilities can and should look different based on the marketing organization, desired business outcomes and marketing strategies to achieve them. For example, an inbound content marketing strategy will require one set of capabilities, while a heavy investment in paid media capabilities will require another. Resist the desire to map capabilities to specific people, job roles or teams at this stage.
Next, create scenario plans for changes you anticipate the marketing organization will need to respond to in the mid to long term. For example:
What impact would a new product introduction have on your inbound content marketing strategy?
Would you need to expand capacity or develop a new content plan that would require different subject matter expertise?
Examine your capability plan to see if there are other areas you may need to address should one of your identified scenarios arise.
Once you have assessed capability needs and made a plan, drill down a level to address resourcing those capabilities. Answer the following questions:
What capabilities do you have access to?
Where do those capabilities reside now (e.g., internal to the marketing organization, or external with agencies, marketing service providers and freelancers)?
What potential complexities exist around each resource (including issues like reporting authority, budgeting and previous prioritization of deliverables)?
Finally, review the capabilities that complement each other, as well as those that are mutually exclusive. For internal resources, focus on identifying any gaps, misalignments or lack of capacity. At this stage, be sure to stay focused on capabilities or skills rather than rigid job roles.
Often marketers have capabilities and skills that go beyond their official job descriptions or titles. Work with your people leaders to identify individuals to target for development to move them into roles that not only better suit their aspirations, abilities and skills, but also meet your capability needs.
Maintain a collaborative, cost-effective mix of marketing agencies
Budget constraints limit CMOs’ ability to grow their in-house marketing organizations. This drives continued reliance on marketing and/or advertising agencies, which account for nearly a quarter of marketing budgets.
CMOs are reevaluating their agency mix to accommodate evolving needs. We asked CMOs to rank their top 3 drivers for changing the agency mix. Skills and Experience ranked first (34%) with Adaptability, Creativity and Innovation tied for second at 26% each.
Effectively assembling and managing a roster of agencies is critical to meeting marketing’s goals and ensuring smooth marketing operations. Selecting the right agencies is one of the most significant decisions a marketing organization can make.
The vast, ever-changing agency market can be difficult to navigate, and it can be hard to know where to start. These four steps will help guide the process:
Gain internal alignment. Before you start your search, meet with your CIO, sales and other stakeholders to be sure everyone is in agreement regarding agency outsourcing needs.
Pitch the agencies before they pitch you. Get agencies excited about working with you; don’t assume your business is desirable just because it’s available.
Focus on the problem, not the solution. When writing your request for proposal (RFP), keep the emphasis on your marketing problem, not on how to fix it. That’s what the agency will do.
Get to know the agency. Choosing an agency is like a courtship. Set time aside for collaboration work sessions and briefings, not just one-way communications, so you can understand how the agency works.
Apply the right marketing operations models to gain efficiency and scale
Building a marketing engine capable of shaping customers’ complex digital journeys requires operational excellence.
CMOs often use internal operating models such as centers of excellence, in-house agencies, newsrooms or shared services. But when we look at what CMOs tell us about their internal operating models, we see the makings of a perplexing story.
Our data and client inquiries suggest that CMOs are striving to get a handle on marketing operations now that they’ve taken more work in-house. They have applied multiple models and are using project-oriented teams or pod structures for innovation-related work. However, there is often misunderstanding of the models.
Operating models encompass the following:
In-house agencies (IHAs): End-to-end strategy and execution, modeled after an external agency
Centers of excellence (COEs): Leading adoption and consistency of best practices
Shared services: Specific capabilities offered and delivered to multiple functions/teams by request
Newsrooms: Journalistic-style, fast-cycle editorial production for topics identified daily/weekly
- Project pods: Tiger and agile teams working to prototype concepts or execute work
To match the right work or marketing discipline to the right internal operating model, start by evaluating your current application of operating models. Using just one operating model across your entire marketing team — especially if it is a shared service — may be a mistake for mature marketing organizations.
Next, highlight potential changes to consider. For example:
Use a COE to facilitate the sharing of best practices across various business units or global/local markets. A COE offers CMOs the chance to effectively and consistently apply in-house first-party data to ad targeting and measurement across the marketing organization, and may be a better use of resources.
Use a shared services model for high-output production and execution-oriented teams or work types for which it fits, especially when working in tandem with agency partners for a co-creation model to collaboratively meet the demands of the business. Other than that, use it sparingly yet strategically when no other model works better.
Use a newsroom model for fast-cycle content. Newsrooms can be used by CPG, retailers or media/entertainment organizations for quick-turn, near-real-time content development. This model is particularly useful for social media development and execution where brands want to react quickly to cultural trends or moments.
Knowing what operating model — or combination of models — is the most appropriate to apply to your marketing capabilities is critical to running a modern marketing organization. It may also affect the marketing organization structure.
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FAQ on the marketing organization
What is a marketing organization?
The marketing organization is the team responsible for developing, executing and measuring promotional, advertising and branding strategies that appeal to the needs of a target audience, with the goal of driving sales. A marketing organization must apply a deep understanding of market trends, customer behavior, competitors, and data and analytics to ensure its strategies are effective.
What does it take to build a marketing organization structure that drives growth today?
CMOs in complex organizations must balance the need for control over the marketing organization with the need for marketing operations excellence. Building a growth-focused marketing organization requires knowing how and where to centralize the marketing function, while developing and retaining top talent and maintaining a cost-effective, collaborative agency mix.
What role does talent play in creating a more effective, efficient and aligned marketing organization?
Talent plays a critical role in creating a more effective marketing organization. As customer journeys become more complex, a range of new marketing skills are necessary to meet changing consumer demands and business goals. Increased competition for marketing talent, and talent’s increased expectations of employers, add to the challenge of finding the right skill sets.