Inflation, Oil Top CMOs’ Concerns

With budgets under pressure from inflation and traditional advertising’s effectiveness being questioned, chief marketing officers can be forgiven if they feel gloomy.

That was the backdrop for 165 clients gathered last week at the Marketing Forum, a conference on a cruise ship where they listened to new ideas from agencies and heard more bad news about themselves.

Among that news: Only one in four CMOs meets with their CEO “very often,” according to a yet-to-be published survey of clients done jointly by The Financial Times and consultancy Market-2Customer. The approximately 200 poll respondents were drawn from the database of Richmond Events, which hosts the annual floating conference off New York’s coast.

In addition to the lack of top-management access, rising business costs—inflation generally, and oil prices specifically—are testing marketers’ faith.

Ken Hehir, Coors’ brand marketing director, admitted the brewer is feeling the pinch at the pump. “The fuel increase hits us hard,” he said, because all the product is shipped from a single location, Golden, Colo.

At The Home Depot, “Those discussions happen all the time,” said Shelley Nandkeolyar, vp/interactive marketing, referring to cost-cutting in general. “The natural thing is to say, cut that new media thing because we can’t measure it.” But Nandkeolyar said he always defends the 1 percent of the marketing budget reserved for “dabbling.”

Asked if above-$50 oil prices—and the cuts they trigger—are a problem, Stefanie Robeiro, EMI Music, senior director/sales and marketing, said, “Sure … marketing is famous for not being able to put a dollar sign” on its own value. “It’s always hard.”