‘CMOs are like deer caught in headlights when grilled on business results by CEOs’ – Mastercard’s R Rajamannar

We’ve seen a lot of companies do away with a global chief marketing officer (CMO) mandate in the recent past. Why is this happening?

“I’ve spoken over the last couple of years about the existential crisis of CMOs. CEOs and CFOs are obviously coming under tremendous pressure to deliver results every quarter or six months. Competition is intensifying like crazy. In such a scenario, it is either a race to the bottom on price with shrinking margins or you need to find another engine of growth.

“They are looking to marketing – as they should. 

“The problems occur if marketers are unable to connect the dots between marketing actions and business results. Most marketers come from the creative side of things and are not necessarily data savvy. They may not fully (or not at all) understand business drivers and results, and how these can credibly be attributed to them.

“When the CFO or CEO asks the CMO – what are the business results you have delivered for the X amount of dollars we’ve given you – they look like deer caught in headlights, not knowing how to defend. They start blabbering – a lot of mumbo jumbo about predisposition, loyalty, net promoter score, brand and marketing awareness. The CEO says: “That’s good but nobody other than a marketing guy cares about those metrics. What is happening with the business and how are you helping me today?” 

“That is why CEOs are getting antsy. The need for marketing has not disappeared but the way the marketing leadership is communicating and evangelising the function has been impacted substantially. 

“Many companies – Kraft Heinz, Coca-Cola – are getting people who are not necessarily marketers as chief revenue, growth and customer officers and trying to get the momentum going. Their actions are meant to drive business – not just build a brand. 

“However, I believe this is an opportunity for marketers. If they educate themselves and represent the function with credibility and gravitas, they can regain the seat at the CEO’s table. I assumed a the honorary role as the president of the World Federation of Advertisers which has given me  ample opportunity to interact with my peers. I serve on the executive committee and board of ANA. 

“One of my objectives at WFA is: How can we help marketers really equip themselves? How do they ‘market’ marketing? An objective is to have a playbook for CMOs that they can fall back on.”

Are your peers in marketing apprehensive about these developments and the increase in roles like chief marketing and growth officer?

“CMOs are seeing a paradox: you require marketing more than ever but there’s less appreciation of it among decision makers in a company. The average stint of a CMO is shrinking. It is between three or four years – hopelessly inadequate for sustainable impact. 

“When the pressure gets high, when they are unable to justify their seat at the table, they move away from the company. It’s like musical chairs.” 

Incidentally, when did the jargon of marketing reach its sell-by date?

“When technology and data started getting into day-to-day marketing. A classically trained marketer understands the purchase funnel and consumer psychology. But he has very little understanding of A-B testing, regression analysis or principal component analysis. 

“Marketing people are also struggling on the technology side. Some of them have budgets greater than the CTO but if they don’t understand technology, how are they going to spend that effectively?

“Historically, marketers held themselves accountable to parameters like unaided awareness, total awareness and net promoter scores. But in the new world, those things seem like jargon that they are hiding behind to the CFO and CMO.

“They were probably not even quizzed about the function as much as they are today. And so classical brand builders struggle with performance marketing in a digital age dependent on data.” 

What are you measured on? What levels of accountability are demanded of you?

“There are two sets of metrics for the department and myself – brand and business. 

“Brand metrics are pretty classical, but we took some of those and made them very modern so they are relevant and contextually appropriate.

“For example, ‘total awareness’ may not be relevant in this day and age. So we dropped it but brought in something extremely relevant. The likeability of the brand, its trustworthiness and the reassurance factor. We have identified and created a set of parameters that we measure our brand on.

“We have accepted the metrics the business measures itself on – the financial topline and bottomline. 

“We have relied on external help as well as academics. Internally, we had some top notch experts. For instance a company called APT that we acquired. They have really helped in establishing and proving what happens to topline and bottomline if brand awareness increases. And making sure it is not a fluffy corelation but a causal relationship established in a quantifiable manner. 

“We have invested a lot of time and effort in having quite a robust infrastructure. I have my own CFO with his own organisation. They don’t just keep track of how much we spend and save but the ROI. 

“We are also probably one of the first if not the first where we have our own risk management function within marketing. My previous CFO is now my head of risk management – she looks at all forms of risk whether it is financial or reputational or data privacy or brand safety. We look at different buckets of risks and she oversees that area. 

“We are literally looking at marketing as a complete business in itself. A company within the company, run with the same diligence and keeping the rest of the firm inspired, appraised and engaged with marketing.” 

What are the specific targets that you are measured against?

“I feel very grateful that we are not only meeting the results but beating them like crazy. I can’t talk specifically about the internal metrics, but a few years ago in the list of the most valuable brands, Mastercard used to be 87. It has gone up very rapidly to 12. 

“In the US we are number 10. moving up from 87 to 10 or 12 globally is not a bad thing at all. The likability scores are trending positive and all the right attributes are getting associated with the brand which I feel very grateful for.”

You have previously spoken of the evolution of marketing and said we were in Marketing 4.0. Has marketing moved on from there?

“To summarise: Marketing 1.0 was all about having a rationale and logical thinking; 2.0 was about emotion; 3.0 was about data; 4.0 was about mobility, connectivity and the social media tsunami. We are entering 5.0 – from connectivity to a new paradigm. It will be about artificial intelligence (AI),  augmented reality and 5G. 

“To take AI as an example: we already use it to create digital banner ads and to get copy done. I have personally seen AI create music. When we were talking of sonic branding, I was interested in seeing how AI would do it, saw some demonstrations and my jaw dropped.  

“At the Cannes Lions, there was a Rembrandt painting created by AI. 

“Of course there are other implications and concerns like fake news and deep fakes. But from a positive point of view, the opportunities for marketing to leverage AI for ad creation are humongous. It can deal with organised, unorganised, traditional and visual data. It can identify patterns and come to insights which for a marketer is a dream come true. Effective campaigns can be crafted around those insights. We are in the cusp of 4.0 moving to 5.0.”

How prepared is the agency universe for this? How would you rate them basis your interactions with your partners and from what you hear as a senior marketer?

“Everyone is grappling and no one is fully prepared. There are some areas where people have started investing in trying to figure out how to leverage these capabilities. For instance, IPG buying Acxiom and Accenture gobbling up a ton of agencies. 

“People realise that life is going to be very different tomorrow and one has to be prepared. There will be some early starters who will gain a lot of ground. Others will be left behind. Speaking for Mastercard, we have bought two companies that specialise in AI and data. 

“We are at the beginning of the journey – agencies and marketers have to do tons of stuff to get there. 

“For instance, blockchain has taken a foothold in the financial world, but it is yet to gain a significant presence in the marketing world, in spite of the trust deficit in the marketing ecosystem. There are a number of intermediaries between advertisers and publishers which is ripe for something like blockchain. 

“In capabilities like that, we are probably close to one or zero out of 10. But when it comes to data deployment some companies are above five. It’s a little all over the map at present.”

What sort of impact is AI going to have on creativity?

“I don’t think creativity will disappear. I see it staying on at least in my lifetime. It will address the soft issues of consumers.  Will humans or machines be responsible for creativity is the second question.

“Maybe the lower order creative tasks are already starting to be replicated if not replaced. But the higher order originality, I don’t think AI is there and I doubt it will happen in the next three to five years.

“Data can play a huge role in terms of its ability to get to an insight because of the pattern recognition capability of AI. 

“Consider vacation planning: in a family in my generation, my parents would decide and inform us. Today, it is different. The son or daughter may be a low teenager but they will challenge you. They are aware and digitally native – the R&D managers for the family. 

“If I am in the business of travel, do I focus on the parents or find ways of appealing to these R&D managers? This insight is very valuable to me as a marketer so I can focus the theme on a different target audience and what matters to that audience. AI will inform creative in an unprecedented manner; it won’t disrupt creativity.” 

It’s not just the marketing industry but finance too which has been disrupted with emerging fintech players all over the world. What is the marketing response at Mastercard to the disruption in finance?

“We look for partnerships. You cannot innovate everything yourself. If Apple is innovating, you join hands and bring complementary strengths to the table. The more recent live example is a partnership with Apple and Goldman Sachs. We co-created and launched an incredible product – Apple Card – totally different from anything that is out there. 

“It’s a titanium card with no card number, CVV code or expiration. It has been designed is to make consumers aware of and responsible for spending. It totally reimagines the card experience. 

“When you get your physical card, normally you call a number to activate it.  Here all you have to do is put your phone on it. A simplified and differentiated experience. The card is already the talk of the town in the US.” 

In our recently conducted finance summit, we had a panel on why banks who sit on a ton of consumer data do such a poor job of harnessing it. What’s your take on this and how does Mastercard use consumer data?

“It is very critical for marketers to wear the hat of a consumer and ask themselves – how would I want my data to be used? Wearing the hat of a marketer, you ask – how do I operate while respecting the consumer’s privacy?

“In that spirit we stay away from personally identifiable information. It’s all anonymised and aggregated. We share insights with our partners. It could be for fraud management or better engagement of consumers.” 

Was dropping Mastercard from your logo a way of dissociating the brand from a mostly cardless future? 

“Is Facebook a book or Apple a fruit or Amazon a river? A name can be anything – how you characterise it is what is important. The fact that we had ‘card’ in the name didn’t make Mastercard less optimal a brand. 

“However, we wanted to contemporise. And so de-emphasise the product form factor. We are still called Mastercard – as we tried to contemporise the logo, we recognised we are sitting on a goldmine of brand recognition. Our logo is recognised even without the name by over 80% of people around the world. Very few brands get that sort of recognition. 

“The utility is in the digital environment where screen sizes get smaller – like on watches – or even on phones, there are four or five brands. Each logo is so small – the words below are even tinier. 

“With the name gone, I can expand my allotted space by expanding the logo. It makes me look more prominent. Every other payment logo is the name and is blue. If you take the name away from Visa what do do you have? If Amex takes the name away, it’s a blue box which could be Goldman Sachs. If Paypal takes away the name, there’s nothing there. They are all blue I am red and yellow and so if I make it more prominent, I stand out. The brand is 20% more visible on a comparative basis when I take away the name. 

“There’s method in the madness. We have launched five restaurants – one in Rome and in downtown Manhattan. When you just have the logo and Priceless The Culinary Collective it looks so beautiful. But if you had the logo, Mastercard below and then Culinary Collective, it just doesn’t gel. Taking the Mastercard name away makes it native to so many different contexts.” 

We are of course talking about a generation familiar with the name and who associate the logo with Mastercard. How do you think this strategy will play out in the future with people who are not as familiar with the brand? 

“This brand will be incredible strong even to the new generations who may not have grown up seeing the name. There are 10 passion points that Mastercard is built around. Things that people care deeply about: music, culinary or sport for instance. We know what the passion points of this younger generation are: EDM and esports are just a couple of areas where they spend a boatload of time. 

“We struck a global partnership with (multiplayer online battle game) League of Legends which has 100 million players every single month. We are at their championships all over the world. We have launched a branded card in Russia and users get access to special experiences including in game benefits and merchandise. They keep seeing our logo and there’s a constant association. 

“When it comes to EDM festivals, we sponsor 60 of those in Europe alone. We are very prominent – with separate queues and merchandise. We are building and reinforcing the recognition and association between the logo and Mastercard and the fact that it brings all these great experiences.

“And then we decided to go multisensory – and thought let us use sound. And we launched our sonic brand. This is at the cutting edge, though I say so myself. 

“Two and a half years ago, we did a market scan for emerging trends and zeroed in on voice-based search and commerce. Though I have a fantastic logo, I had no visual real estate to showcase it on. We needed a different way of representing the logo and decided on sound. And it was not just jingles which have, of course, been around for decades. 

“When you look at a visual brand, there’s a complete architecture and design. I thought there should be a playbook on this and found there was none. We had to write our own playbook and create a literally pioneering effort.  

“I partnered with musicians, musicologists, agencies and celebrities to create a comprehensive architecture for the brand purely based on sound. We wanted 10 different dimensions to our sonic architecture – we’ve launched just three so far.

“It needed a tune that was around 30 seconds long which is easily identifiable and pleasant. 

“We needed it to be simple: if it was so unique and dominating, it would have become very restrictive on where it could be used. We needed it to be neutral and memorable – something which sticks with the brand nicely. And it had to be hummable, because when you can hum it, the memorability is higher.

“It would have to be versatile: whether played in India, South Africa or South America, it should feel native. Also versatile and adaptable: whether in an opera, in a UEFA championship league match or at a romantic dinner. I told the agency go create something around this.

“We now have a 30 second edit. We are creating versions of it for different genres and geographies – 80 have already been created. When you are on hold you hear it, you can hear it as a ringtone, you can hear it at our sponsorships and events. There is also a three second sonic signature which evokes the memory of the 30 seconder – there’s a strong linkage between the two. Every ad of ours will end with this.

“And then we went another level down with a 1.3 second cut. We call it the acceptance sound – and it plays in a digital or physical environment if you have a successful Mastercard transaction. 

“It evokes the same feeling as the three second or the 30 second version. We also required this to be non- fatiguing: imagine if you are a Walmart checkout clerk dealing with thousands of people a day – hearing notes over and over would drive people nuts. So we did neurological research to find the least fatiguing sounds and sound combinations and an optimum length where recognition is there but there’s no frustration. 

“In Asia, we launched it in Taipei. When you go to metro transit and pay with Mastercard, you hear that sound. It is expanding around the world. It will be a long journey since we have over 48 million merchants around the world. But we are aggressively expanding.

“To get back to the youth and how we get recognition: we partnered with upcoming stars as well as celebrities like Camila Cabello who sang Havana or Linkin Park co-founder Mike Shinoda – he created an EDM version for us. Camila hummed it and put it on her social media reaching millions of fans including lots of teenage girls.

“We have started creating songs six are already complete. We will release our first album in March next year. It will have 10 or 12 regular popular songs that don’t sound like a corporate melody. But there is a constant reference back to the melody. You can sense it, but you are hearing a regular pop song – that’s working out extremely well.

“We created a sonic DNA which has the elements and layers to pick choose and use and build meat and body around it to create full fledged songs. 

“There will be a social media competition where people create and have fun with our DNA and coming up with their own versions. This is how we will build recognition among the audience we are talking about.” 

Are you still as sceptical as you were about storytelling? 

“Absolutely. We can no longer focus on advertising or storytelling as we have in the past. Consumers have been telling us for some time now, ‘I don’t want your ads’. No one cares about hearing your brand story. Consumers want an uninterrupted experience. 

“With the proliferation of ad blocking software, digitally savvy consumers can now block ads and marketers permanently with two clicks. Consumers are also paying money to get an ad free experience. What does this behaviour tell you?  Do you want to ignore all that and stick to your old practices? In marketing, you need to read where the puck is going and consumers are clearly telling us they don’t want to be told brand stories and that too in an interrupting fashion. 

“Storytelling, as we know, is dead. It’s all about storymaking. If you give experiences to consumers which are memorable, positive, or maybe even exceptional, they will tell the story of your brand to their circles, and those stories will be heard. Because their friends and family are not blocking them. So the consumer becomes your brand ambassador. When someone else endorses you, the authenticity and credibility is at a whole different level than you tooting your own horn.”

Given the clarity and sharply defined view you have of the marketing process, would you consider in-housing? If not, what is the value that the agency partners bring?

“It is less about whether something resides in-house or externally. The key is to get the brightest and most inspired ideas, executed flawlessly and to do so economically.  

“If all of these work, I would go along with the agency model.  Partnerships are key to innovation, creativity and staying at the cutting edge.  You can’t do it all by yourself.”

What would your wishlist for your marketing and communications partners look like?

“We engage with agency partners in areas where they are best equipped to provide a complementary set of skills and talents. That can come in the form of external perspective on marketplace developments, insights into consumer behaviours and consumer journeys or expertise in platform best practices to enhance our effectiveness and execution. 

“We’re also looking for the very best, original, distinctive and creative thinking, and agencies who bring a greater diversity to the drawing board when it comes to creative idea generation.”