Hybrid glocal marketing structures: 57 % of CMOs tend to do this

"Reshaping Global Engagement Operations".
Hybrid forms of organization are needed in global marketing.

Reshaping Global Engagement Operations. The current study by the CMO Council provides arguments for new ways of thinking and acting in the digital age. “Both: More customer focus and more brand for more business success” is the motto. In many cases, the future therefore belongs to hybrid organizational structures; fully centralized or fully decentralized structures are falling behind.

Global competition and new customer expectations require new organizational forms for global marketing.

Marketing is expected to be more agile, create better customer experiences, while ensuring growth, efficiency, and measurable effectiveness. The unignorable demands for change and digital transformation culminate in the loudly chanted “disrupt or be disrupted.”

The CMO Council, the network of Chief Marketing Officers with nearly 16,000 members from 110 countries, conducted a study in collaboration with Worldwide Partners, one of the largest networks of owner-managed communications agencies, to determine what changes are needed in marketing for global brands at a time when the demand for customer centricity and personalization is at the top of the agenda. 350 marketing executives from around the world who are responsible for global brands took part in the study.

“Reshaping Global Engagement Operations” is the title of the study. It provides reasons for the appeal for new thinking and action. According to the study, the fear of missed opportunities (FOMO) or of falling behind in global competition is the main driver for change. The most important task of marketing is to ensure growth. “Successfully and quickly conquering markets worldwide” is the top priority for 40% of all CMOs.

However, CMOs are dissatisfied with what they have achieved so far, despite having already invested in new talent and technologies as part of the digital transformation, Goals and opportunities are missed. The vast majority of leading marketers (77%) believe that they are not realizing the full revenue potential of today's connected customers because they cannot fully meet their expectations.

Responsibility, security, comprehensive service and culturally relevant content are at the top of the list of customer expectations. Relevance here is not meant superficially; customers want to be addressed in their own language, their own world, in the context of their own culture and values.

The localization fire is not yet blazing

The frustration of CMOs with their globalization efforts is understandable, as most global omnichannel campaigns are only realized with significant costs and time delays.

• Almost two-thirds of the global brand managers surveyed by the CMO Council gave their ability to adapt global messages and content to different markets and channels below-average ratings.
• More than half of the marketers (57%) attribute their unrealized customer opportunities to a lack of local insights.
• 42% of marketers admit to a significant dissatisfaction with their current localization efforts..

On closer inspection, it turns out that the problems are usually not rooted in the strategy but are rather caused by the structure of the marketing organization.

Extreme organizational models do not produce optimal results

The study investigated three specific operational structures: fully centralized (27%), fully decentralized (30%) and hybrid structures (30%).

Even though a centralized marketing promises cost efficiencies, Marketing managers in such companies regret that they do not really understand local market needs and are not close enough to their customers.
However, a strong customer focus is becoming increasingly important to achieve success with modern, connected customers.

And those in highly decentralized organizations cannot guarantee that a truly unified brand identity is successfully implemented and that the higher costs are benefiting the brand.

Trend towards hybrid

The study revealed a trend away from the extremes of fully centralized or fully decentralized models. The answer seems to be a hybrid structure – a centrally developed strategy that uses local market intelligence during development and implementation. The CMO Council found that in hybrid structures, marketers have a better understanding of local customer expectations and can better communicate global strategies and goals. This also helps them achieve better efficiency values. There are still disadvantages, but these primarily lie in slow decision-making processes rather than in the quality of information, strategy, and implementation.
Marketing managers in global companies who believe in success through customer orientation are therefore increasingly reevaluating their internal structures, and purely top-down approaches are losing their appeal.

Better synchronization of agency and brand organization needed

Agencies also have to step up their game. According to the study, marketers are looking to partners for new strength and inspiration. While data-related tasks are being shifted more inhouse, CMOs are willing to rely even more on external support for communication, from advertising creative development to media planning and buying to PR to live events and experiential engagements. The greatest value of agencies worldwide appears to be inspiration and creative thinking. 84% of respondents say that they will continue to precisely outsource such work to agencies.

However, only 17% of CMOs believe that they are aligned with their agency partners when it comes to designing complex processes and new structures.
Marketers are looking for agencies that can scale quickly, are aligned with the client's business objectives, and can provide sufficient resources with skills in identifying and meeting customer expectations around the world. 45% of CMOs expect agencies to overcome both the silos in the agency industry and the silos in their companies to strengthen company-wide collaboration and realize process efficiencies.

The CMOs' self-reflection also reveals a new sense of responsibility for communicating much more clearly and distinctly business and communication and in particular the overarching growth targets, to their own organization and agency partners alike.

Redesigning the global marketing organization: more customer focus, more brand building for more business success

Overall, this study does not necessarily advocate a radical change, but it is an invitation to dynamically develop organizational structures in which both the brand and the agency are more closely aligned with growth and business objectives, and the transformation from a product-centered to a customer-centered company is also carried out in global marketing.