Mondelez scrapping the CMO role is aimed at improving marketing accountability

Mondelez International’s rebranding of the CMO under the newly created chief growth officer title does not signal its dwindling faith in the discipline but rather a growing appetite to making marketing more directly accountable to the business’s bottom line.

Oreo
Mondelez is to ramp up marketing support for power brands such as Oreo through more targeted campaigns.

The change is part of a C-suite reshuffle at the snacks maker that will see top marketer Mary Beth West leave after three years. Her marketing focused insight and consumer services responsibilities will pass to chief growth officer Mark Clouse, who will also take charge of the corporate strategy, global category, invocation and quality units.

Unifying the disciplines under one remit is intended to “more efficiently” allocate resources to marketing its power brands, Mondelez said. The plan is supported by efforts to switch the focus of the marketing teams from local to regional initiatives worldwide next year to quicken the rollout of best practice across categories.  

Chairman and chief executive Irene Rosenfeld said the revaluation of marketing brings the same focus and discipline to driving sustained, profitable growth that “we have brought to improving our cost structure and expanding margins”. Moreover, it serves as way for the Cadbury owner to achieve the same standards and measurement across the globe spanning campaigns and innovations to agency relations and technology.

Aly Richards, chief executive of marketing consultancy The Intelligent Marketing Institute, a knowledge exchange for marketing and communications professionals, says the removal of the CMO role from the business is a “direct response” to marketing often “lacking the accountability and measurement integrity to drive value to the bottom line”. It echoes a wider sentiment sweeping across the FCMG sector that has seen P&G, SABMiller and Pernod Ricard restructuring to align their wider divisions around the customer.

“We have to accept that the age of the mad men is over and getting “Don Draper” to write you a catchy ad simply will not drive value”, she adds. “Therefore, if you move marketing to an area that is targeted with hard numbers then it should lead to more accountability to driving real business value. It is not about how much you can spend on marketing any more, it is about what return you get on that investment.”

The depths of Mondelez’s changes reveal the innovative marketing that has come to define the business since splitting from Kraft in 2012 has stumbled to drive category growth in the short term. And it has not gone unnoticed by Mondelez, which has extended the payment period for its agencies, slapped marketers with cost-control measures and reoriented media buying around mobile over the last year in search of significant financial savings through focused investments.

Though sales have slowed in 2014, the company has delivered better margins through cost savings such as spinning off its coffee brands alongside productivity improvement. In the three months to 31 March net revenue fell 1.2 per cent, while operating profit climbed 1.1 per cent to $843m (£499m).

Emerging markets remain the company’s growth engine in the medium to long term, as population and income per capita rises, creating opportunities for new products. With nearly half of revenues coming from these markets and 75 per cent of its brands in the snack category, the chief growth officer could manoeuvre Mondelez to benefit from changing diets and packaging requirements affecting China and India.

Maria Trindade, senior consultant at Brand Union, which has advised Kraft on strategies in the past, says: “By integrating marketing with other parts of the business it suggests the company is looking to drive growth from new occasions at a time when consumption habits are slowly becoming healthier.

“Even though Mondelez have scrapped the CMO role, by replacing it with the word growth it actually suggests marketing, albeit in a more integrated fashion, is still top of mind for companies. Hopefully, that’s the objective behind the new role rather than restructuring for the sake of it.”

The reimagined Mondelez chief marketer is born from the need to put hard targets above any other form of marketing activity. Shifting the CMO’s role and responsibility to a new Chief Growth Officer shows an acceptance that marketing needs to work in tandem with the wider business in order to drive the business forward commercially.

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