The Decomposition of Marketing

To adapt Julius Caesar’s famous opening line of the Gallic Wars:  marketing as a whole is divided in three parts.

• Product marketing (prodmkt), responsible in a word, for the message and how well it resonates with customers in the market [1].
• Demand generation (demandgen), responsible in a word, for generating opportunities (oppties) to feed sales [2].
• Corporate communications (corpcomm), responsible in a word, for communications, including branding, public relations, and corporate-level messaging [3].

Two important notes:

• There is an optional fourth part, sales development, i.e., managing the team of sales development reps (SDRs) who convert MQLs into stage-1 oppties.  Whether this team should report into sales or marketing is a separate debate.
• The lines between these parts are not black and white.  Social media advertising is demandgen, but posting is either comms or prodmkt.  Prodmkt helps provide content for demandgen campaigns.  Content marketing is a form of light prodmkt.

Marketing leaders grow up [4] in one of those parts and thus take one of the three basic flavors. But just as few CFOs grew up in legal, few CMOs grew up in corpcomm.  So it really comes down to two:  most CMOs either grew up in product marketing or demandgen (just as most CFOs either grew up in either finance or accounting).  The point being that virtually no one grew up in both.

It was this realization that led me to create “pillar profiles” for marketers — a score from 1-5 on each of the three (plus one) pillars of marketing: prodmkt, demandgen, corpcomm, and sales development.  The trick is you only get a maximum of 15 points to assign [4a].  While I’ve never blogged on pillar profiles, I did cover them in my SaaStr 2021 talk, A CEO’s Guide to Marketing.

If you’re searching for a CMO, the first thing you should do is identify your target pillar profile [5].  Remember that you get a maximum of 15 points and, harder yet, you’ll find that {5, 4, x, x} and {4, 5, x, x} candidates are very hard to come by.  Usually you’ll find {5, 3, x, x} and {3, 5, x, x} candidates.

In the past, this forced startup CEOs to choose between a prodmkt- and a demandgen-oriented head of marketing.  But, with marketing ever more accountable for building pipeline [6], it was a Hobson’s choice:  most picked demandgen-oriented leaders because without pipeline, well, everything stops.  It’s the physiological needs level of marketing.

Increasingly though, I see startup CEOs interested in changing the rules so they have both strong prodmkt and demandgen leadership.  They’re doing this by decomposing marketing and reconstituting it in various ways:

• Generally hiring demandgen-oriented CMOs [7].
• Moving product marketing to report into either the chief product officer (CPO) or the CEO directly.
• Occaisionally moving demandgen under the CRO, leaving behind either a prodmkt-oriented CMO or additionally putting prodmkt under product, leaving a corpcomm-oriented CMO.

I think all of these options can work in different situations, so let’s review the pro/cons of four different marketing org structures [8].

New, Traditional Marketing Structure
I believe the new traditional structure [9] is to hire a demandgen-oriented CMO and put prodmkt under that CMO.

The new, traditional marketing structure. Demandgen-oriented CMO with prodmkt reporting in.

The strength is that you get to hire a strong demandgen leader in the CMO slot and they will likely do well at filling the pipeline.  It may, however, be difficult to attract the level of prodmkt leader that you want because they may feel like “they understand the business bettter than their boss,” even if they lack the demandgen skills required for into the CMO role.

Prodmkt Under Product Structure
In this structure, your hire a demandgen-oriented CMO and move prodmkt under product.

Prodmkt under Product marketing structure. Demandgen-oriented CMO who also runs comms.

The strength here is that you get to hire a strong demandgen leader as CMO and — if you happen to have the right CPO — then prodmkt can work quite effectively under product.  This works best when the CPO is a great outbound communicator who has both a genuine interest and prior experience in prodmkt.  Never, ever force-fit this.  Some product leaders just want to manage the backlog [10].  I would note that large-company general manager (GM) positions, e.g., the one I held at Salesforce, are effectively “product management on steroids” and those steroids include taking over a lot of product marketing duties.  In such organizations, product marketing also exists outside the business units, but it is staffed at a lower ratio, and more product-line and campaigns-support in nature.

Prodmkt Under CEO Structure
Here again you hire a demandgen-oriented CMO but move prodmkt directly under the CEO, instead of under the CPO.

Prodmkt reporting to CEO structure. A demandgen-oriented CMO runs DG and comms.

I like this structure for early-stage startups because it lets the CEO have their cake and eat it, too — i.e., they can attract strong demandgen and prodmkt leaders.  This structure also keeps the CEO close to the action during the early days when the company is still evolving its message frequently.  It gives the CMO a chance to keep their job while still subtly giving the VP of Prodmkt the chance to earn the CMO job if they work well with the CEO, crush the prodmkt role, and demonstrate significant understanding of demandgen [11].  A little internal competition keeps everyone on their toes.

Fully Decomposed Structure
Fewer people contemplate this structure, but I have seen it once or twice.  Here you move demandgen under sales, prodmkt under product, and hire a corpcomm-oriented head of marketing.

Fully decomposed with DG under sales, prodmkt under product, and a corpcomm-oriented CMO

I’m generally not a fan of this structure because I don’t like marketing reporting into sales [12].  The strength is theoretically alignment:  by putting demandgen under sales, the CEO can effectively delegate responsibility for aligning demandgen to the CRO.  This structure may work for product-oriented founders who have little interest in go-to-market (GTM) functions [13].  The weakness here will be potential difficultly in finding good people to staff both the head of demandgen and the head of prodmkt roles.  Additionally, I’d guess that only 1 in 5 CPOs are good fits to run prodmkt.

Conclusion
In this post, we covered several topics:

• The idea that marketing fundamentally has three parts — product, demandgen, and corpcomm — and that sometimes there’s an optional fourth, sales development.
• That we can and should make pillar profiles to identify, at the start of a CMO search, which pillar profile we are looking for.
• That startup CEOs are increasingly exploring alternative organizational structures to have their cake and eat it, too, when it comes to hiring marketing talent.
• We examined four different structures and quickly discussed the strengths and weaknesses of each.

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Notes
[1] A more detailed list:  positioning, messaging, high-value content (e.g., collateral), sales tools and training, support for public relations (PR) and analyst relations (AR).  Because the latter is fairly product-focused and time-intensive (e.g., extensive RFPs, briefings, and demos), you increasingly see AR split from PR and often reporting into product marketing.

[2] I contemplated, but deliberately did not pick “pipeline,” because sales must be responsible for the pipeline.  I could have said “generating pipeline,” but that’s two words and marketing is only one of four sources for so doing.

[3] As companies get larger and have multiple products, the need emerges for a corporate-level capstone message that transcends product line messages.  Note that I contemplated but deliberately avoided chosing “brand” as the single word, because it’s highfalutin for an early-stage startup.  See my post, practical thoughts on branding.

[4] Meaning specifically, had their formative career experiences working in and thus both have a deep knowledge of and the embedded point of view of that given department.  Finance people generally look at the company differently than accounting people.  Ditto for product marketers and demandgen people.

[4A] On the rough theory that, “the universe doesn’t make those,” so if you’re actually going to hire someone you need to realize that even 15 points is a pretty good score.

[5] As a board member, nothing is a bigger red flag on a marketing search than when the three finalists bear no resemblance to each other, e.g., a {5, 3, 3, 2}, a {2, 5, 3, 4}, and a {2, 3, 5, 3}.  If you need a {2, 5, 3, 4} then all finalists should be pretty close to that pillar profile.  You’ve effectively deferred deciding what you need until picking, which wastes time and changes your final decision from, “of the three people who look like what we need, which one is best for us,” to “what type of person do we need again?”

[6] It may be hard to believe but 25 years ago, before the widespread adoption of CRM, marketing had largely tactical and poorly measured responsibilities on lead generation.  Here’s my take on the evolution of software marketing.

[7] While I know early-stage startups don’t often have CXO-style titles, please consider CXO here to be a compact notation for saying “VP of <function>” or “Head of <function>”.

[8] I’ll leave the SDR question to the side as I view it as orthogonal and addressed in this post.

[9] I suppose I could just say contemporary, but “new, traditional” strikes me as more precise.  It’s now the “traditional” way, but yes, it’s still fairly “new” from where I sit.  Neotraditional doesn’t work as that means a new adaptation of a traditional thing.

[10] Becoming an incrementalist is the occupational hazard of a career in product management.

[11] In which case the CMO would have no functional job change but get put under the prodmkt leader. If this is a possiblity far better to call one VP of Prodmkt and the other VP of Marketing, so when that occurs it’s a promotion to CMO for one of them, but not a demotion for the other.

[12] There is no doubt some religion in my dislike, having been CMO of three companies for over a decade.  I think the rational argument is that you don’t need to put marketing under sales to align marketing with sales, and such, doing so is rather a brute-force approach that will result in a smaller candidate pool.  Moreover, most CROs know little about marketing and are not able to add much value when they manage it.

[13] Of course my general advice is to develop that interest.  The typical SaaS company spends twice on S&M what it spends on R&D.  Thus, while you may think you founded a product company, you actually founded a distribution business.  So go figure it out!  (And it’s fun.)