Plus: Marketing Is Adopting AI, But Challenges Remain |
| After a slow start, marketers are starting to embrace AI technology. According to a recent study from online visual communication platform Canva, 78% of marketers see AI as an essential part of their long-term strategies, while 58% put it at the core of their strategy. Nearly all marketers—94%—had budgets for AI last year, and 75% expect budget increases for the technology this year. Marketers are fully taking advantage of AI’s ability to do simpler tasks: 85% of professionals said they are saving at least 208 hours of work a year—more than five weeks—by using AI. While text generation and refinement are the two most common uses—by 52% and 51% of respondents, respectively—almost as many are using it for image and video generation (49% for each). But they’re not yet handing over total responsibility for tasks. Only 6% provide just minimal oversight for AI outputs. The rest still rely on humans to a degree—21% use AI for inspiration and have humans create content, while 43% see AI content as a starting point that requires extensive human editing. And full integration of AI is still difficult. Six in 10 struggle to integrate AI tools into their existing workflows. And just 52% consistently track AI’s performance across all campaigns, while one in three don’t know how to measure the success of AI initiatives or determine ROI. One thing is clear: AI is becoming a part of the fabric of marketing. Now come the more difficult challenges: Ensuring that campaigns are still creative and different, creating content that resonates with real people, and overseeing outputs to make sure they are both correct and in keeping with brand ethos. Another constant challenge for CMOs is developing a good working relationship with the CEO. I talked to John Connors, founder and CEO of marketing performance improvement firm Boathouse, about why the gap exists and how CMOs can try to bridge it. An excerpt from our conversation is later in this newsletter.
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| In today’s CMO newsletter: |
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| Time is running short for TikTok to find a U.S.-friendly buyer. On Sunday, President Donald Trump said his administration is working with four different groups interested in buying the app, and the final decision would be up to him. Trump gave no details of who the potential buyers were, but previously reported interested buyers include Microsoft; a group including billionaire Frank McCourt, Canadian investor Kevin O’Leary and Reddit cofounder Alexis Ohanian known as Project Liberty; and a group including Employer.com founder Jesse Tinsley, Roblox CEO David Baszucki and YouTube star Jimmy Donaldson. Trump said last week he would “probably” extend the deadline for TikTok’s Chinese parent company to either divest the app or have it banned in the U.S., which is April 5. But no matter who’s on the potential buyer’s team, whether a sale can even happen is an open question. Since his inauguration, Trump has enacted steep tariffs on China—20% on all goods, plus 25% on any steel and aluminum. China’s government has responded with harsh words, reciprocal tariffs and import bans on some U.S.-made goods. Entities in China may be less willing to make a deal today than they were in January. |
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| Streaming services have removed the barriers that once existed for ordinary people to be able to get their videos, writing, photography and songs out into the public. Entertainment industry data and insights company Luminate indicates more than 200 million tracks are available on music streaming services worldwide. However, Forbes contributor Bill Rosenblatt writes, that doesn’t mean anyone is listening to them. Data from global Paris-based streaming service Deezer indicates 78% of the tracks uploaded in the last year have never been played. And while about a third of all submitted tracks are fully AI-generated, fraudulent, background noise and re-releases, Rosenblatt notes that the percentage of never-played tracks seems to be increasing, along with the number of new tracks being uploaded. |
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| Despite being a retail mainstay for decades, Target has seen its brand value and revenues slip. In its earnings report last week, Target reported declines in net sales, gross margins and earnings, writes Forbes senior contributor Pamela Danziger. Compared with the same period last year, sales were down 3.1% and operating income dropped 21.3%. CEO Brian Cornell and his senior executive team held a meeting last week to discuss a comeback strategy, Danziger reported, with the retailer striving to get back to its “Tarzhay” image—a term coined decades ago when it was perceived to be a store that made the everyday elevated and upscale. Target plans to invest between $4 billion and $5 billion in its stores, supply chain and technology over the next five years, with the planned outcome of $15 billion in sales growth. The company plans to invest more in its Good & Gather and Favorite Day private label brands, continue to grow its beauty section, reduce lead times for its home and apparel merchandise, expand partnerships with popular clothing and accessories brands, and enhance omnichannel shopping with AI recommendations and optimized search results. However, a major reason Target has fallen out of consumers’ favor is purely political. In 2023, the retailer went all in on Pride Month-themed merchandise, a polarizing choice in some areas, which brought the store’s corporate reputation score down. Dialing back the merchandise assortment last year didn’t help matters much, with scores remaining about the same. As 2025 began and the Trump Administration began cracking down on diversity measures in the government, Target pulled back its diversity, equity and inclusion goals, sending its reputational score down again. Stephen Hahn-Griffiths, EVP of global enterprise growth for corporate reputation firm RepTrak, told Danziger these actions hurt the retailer. “You’re frustrating many of your most loyal customers,” he said. “Target has always been known for good corporate citizenship, but evidence of flip-flopping on key social issues related to both LGBTQ and DEI has coincided with reputational decline.” In response to the DEI changes, a group of Black faith leaders has advocated for a 40-day Target boycott to coincide with Lent. |
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|  | | Boathouse Founder and CEO John Connors. Boathouse, Getty |
| | How To Bridge The Gap Between CMOs and CEOs |
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CEOs and CMOs often find themselves at odds, which can lead to high turnover rates for CMOs and angst on both sides. I talked to John Connors, founder and CEO of market performance improvement firm Boathouse, about the divide. Boathouse recently published its third annual study on marketing and the CEO. This conversation has been edited for length, clarity and continuity. What is causing the distance between the CEO and the CMO? Connors: It’s a little bit of both sides. We’ve all tracked how much private equity plays. I think CEOs have become quants [quantitative analysts]. And I think brand became more and more of an intangible. Those CMOs started to lose trust with that CEO because they weren’t speaking quant. Second, they carried around an old model. I advise a lot of CMOs that the brand model started in 1931. You’re the only person walking into the C-suite with a 1931 model. The third piece is they’re just not building that trust. We see that in our data. Every CEO is halfway through their transformation plan. They’re figuring out: Who’s helping me achieve my transformation plan and who’s fighting me. If the CMO is perceived too often as fighting me on my transformation plan versus helping me on my transformation plan, they just lose credit. How can trust between the CEO and CMO be built? Which side of this relationship usually needs to move more? The CMO has to do more to build it, for better or for worse. And because the CEO[’s average tenure is] almost two times longer than the CMO, the CMO is going to lose that battle. The part that we push on is how quickly do they wrap their heads around the CEO’s vision or strategy, versus bring their own ideas? A classic example is a CEO has a really entrenched vision to spend $800 million to buy this company. The CMO thinks their strategy is wrong, because they want them to execute more of a classic brand strategy. It’s like: This person just spent $800 million to buy this company. They probably want you to execute their strategy before you challenge their strategy. [A CMO I was working with in this situation] was fighting because of classic brand management philosophy: The CEO didn't have enough “why” in their reason for buying the company. I was like: Let’s go sell some product, help the CEO turn the company profitable, and then we can introduce “why” later, as opposed to you go and tell the CEO, “You don’t understand.” [Revlon CEO] Michelle Peluso, who’s been a high-profile CMO, talks about how the CMO’s job is to fall in love. She talked about how a lot of CMOs go in and they want a challenge. They don’t fall in love with the company or the strategy fast, and then they’re forever on the outside. You said one of the problems between CMOs and the rest of the C-suite is an outdated brand playbook. How can the CMO bring more of what the CEO is expecting? You could almost think about the presidential campaign as an analogy. The Democrats tried a more traditional brand playbook where they tried to be on the network news and cable and all that. And the Republicans played a relevancy and an attention strategy, where they’re on podcasts and social: much more relevance based. You see the exact same thing play out in the brand side. There’s still a lot of traditional brand marketers who try and win in those classic channels. I think that model still is very viable if you have $1 billion in ad spend. If you don’t—99% of advertisers don’t—then you need a different strategy. As [NYU Stern School of Business marketing professor] Scott Galloway calls it, the attention economy or the relevancy-based economy is where you have to compete now. There’s really not that many modern marketing thought leaders. We came upon Robert Shiller, an economist out of Yale. He wrote a book called Narrative Economics in 2019 about how narratives drive economic impact and how, because everything had been digitized, he could go back, quantify economic narratives over time, and prove that these narratives had economic impact. We started shifting to a narrative model as opposed to a brand management model. It allows us to run five to seven narratives for a client, as opposed to one brand idea, and that can tie to their strategy more. We can reflect the CEO’s strategy better, and we can be more relevant. If I just show up to tell you about my topic, it doesn’t meet you there. Whereas with six narratives, they can talk about a topic related to their narrative. We can compete much better in the attention [or] relevancy-based economy.
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At an investor conference last week, streaming giant Netflix announced it would again increase its spending on original content in 2025. |
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11%
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Year-over-year increase in content spending, which adds up to a planned $18 billion
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301 million
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Netflix subscribers, as of its most recent earnings report
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‘We do expect the benefits of the password-sharing crackdown to slow’
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MoffettNathanson analysts wrote in a research note last week about Netflix, which led the company’s stock to drop more than 8%
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The relationship between a leader and those who work under them can be a difficult one. Here are 12 things you can do to show direct reports that you care. Even if your social media content is getting shared and noticed, it might not be encouraging viewers to become clients. Here are ways to increase your conversion rate. |
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