Virgin Mobile CEO David Scribner takes shot at Telstra over CMO
David Scribner
Virgin Mobile chief executive David Scribner has taken a shot at a major rival Telstra saying he is “flabbergasted” its newly appointed CMO will not report into the CEO despite it claiming to be customer centric organisation.
Whilst Scribner did not name the company the only rival telco to announce that particular structure is Telstra, whose newly installed chief marketer Joe Pollard will report into group executive Gordon Ballantyne rather than CEO David Thodey.
Speaking at the Secrets of Agency Excellence masterclass in Sydney this morning, the Virgin Mobile boss – a former CMO himself – said he gets “fired up” at the lack of power and influence most marketers have.
Asked on the likelihood of marketers rising to CEO or board level, Scribner said: “I really want it to happen. I am passionate about the profession and I think there has never been a better time for marketers to come to the forefront of thinking about growth and innovation.
“The customer has never had a greater voice so the marketer should never have had a greater voice. But I don’t see it happening in the Australian marketplace.
“In fact, one of my competitors put in a new CMO but failed to have them report to the CEO. You probably know exactly who I am talking about.
“This brand talks about being customer first yet fails to put their marketing head as part of the executive leadership team. I just find that flabbergasting.”
Boards and leadership teams want to get close to the consumer yet they do not have the key brand expert on the top table, he added.
“That’s what fires me up, the fact CMOs are not getting to the next level up,” Scribner said. “There is this absolute ceiling but I don’t completely put the blame on boards or CEOs.
“I think CMOs have to do a lot more for themselves to make sure they break through that ceiling. Without doing that I don’t know how a CEO can talk about the brand without having someone sitting at their right hand saying this is what we are doing with the brand. I am quite intrigued by that.”
To elevate their status, marketers must spend less time with agencies and more time with sales, finance and accounting teams so they can better understand hard measures. They should then communicate that to the agency, he said.
Scribner said one of the marketing challenges in the telco sector is to show greater innovation and to move away from a price message. Pursuing such a deal-led strategy could end in disaster, he warned.
“We don’t want to be an industry of a dumb pipe. Telcos in 10 years could easily be the next Kodak,” he said.
He admitted that telcos also do not have the same respect as banks among consumers, saying Virgin tries to avoid using the word telco, comparing it to a “five letter swear word”.
Scribner told delegates that agencies should get closer to the CEO and urged marketers to stop being “gatekeepers”.
He urged marketers not to blindly follow the brief handed to them by the previous CMO who was in the role for 18 months, who also inherited a brief from their predecessor. The cycle must be broken at some point, he said.
“I was talking to a very senior CMO at a top 10 ASX company and they said it’s really interesting because I inherited a colouring-in department, and I now have to turn them into a business growth innovation department,” he said.
“CEOs are not seeing their marketers give growth for innovation or ideas. They are not visionaries. You can be stuck in the day to day. The problem with the marketing department is that if they’re stuck in the day to day and 100 per cent the agency will be stuck in the day to day and they are not allowed to be visionary.”
Scriber also said the industry’s marketing is stuck in 2006 with “exactly the same plans”.
“What excites me is when it starts going from a mobile phone to lifestyle, because that is what the customer is using it for,” he said.
“The most exciting thing is how much evolution is going to happen with the phone and how the telcos will operate in that new paradigm.
“We’ve been lucky for a while. We’ve had premium pricing that’s been able to give us a little bit of headroom so we haven’t turned into the next Kodak, but that only lasts for so long.”
Steve Jones
Miranda Ward worked for Mumbrella from 2013 to 2017, eventually becoming deputy editor. Miranda joined Mumbrella in September 2013 from Sky News.
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Go Scribo! I expected nothing less.
Alan Robertson
Partner
Kinesis Media
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Hey Optus. Fix your own probs first? Time spent wondering about reporting structures in any org other than your own, is too much time wasted.
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Three cheers for David Scribner! Perhaps it is not important for a one P (promotion) CMO to report to the CEO. After all, balloons and brochures are not an executive matter. But, a CMO who is driving the business through the customer centric lens of marketing must report to the CEO.
My firm is working for a $US5.7b business in the USA where the SVP of Insights is a direct report of the CEO. This is a business driven by customer based innovation and is outpacing its competitors.
Thank you David Scribner for your passionate voice for our profession. I am sorry to say, practically a lone voice.
Well said Scribner.
But if you were to be honest with yourself, since Doug Pitt, you’ve produced several of the most ineffective, grating campaigns Virgin have ever done.
I understand that everyone who truly worked on the Fair Go Bro campaign left before it was even entered Cannes, and not your fault at all, but as the CMO responsible for some of Australia’s greatest advertising, how the hell did you let that woeful Glee and the other stuff happen?
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Well all this “poor old marketing” stuff is nice, but the $70bn Aussie company in Telstra whose CMO doesn’t report to the CEO (the thrust of this article) seems to have stratospheric stock performance and is smashing its competitors left right and centre in most categories.
Let’s remember, everyone wants to report to the CEO, even the janitor. Makes them feel nice.
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The sound of straws being clutched at Virgin Mobile. David, your commentary on Telstra only serves to belittle your own brand. You conveniently left out the fact that the Telstra CMO reports to the Chief Customer Officer (that might smell a little like customer centricity to me) which reports to a CEO who is passionately delivering and demonstrating customer centricity within his organisation on a daily basis – and has done for some years. Telstra’s commitment to raising the bar in customer service, (they’re not there yet we know but it’s much improved) amidst a brand transformation with an empowered marketing department and inspired agency partners are what has driven their success – or did you miss that?
Showing some good grace to a strong competitor making a great hire would be a far more useful way to engage in the debate.
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Holly heck, those sycophant Telstra boys sure have been drinking the company Kool-Aid. The “stratospheric stock performance” in fact only mirrors the three year S&P 500 performance. I think Telstra is trading today at $5.66. Pity those poor bastards that paid $7.40 back in 1999.
And, marketing reporting to the Chief Customer Office; The CCO is about retention (the “customer” thing gives it away). What about acquisition! The COO is basically an operations focus. More evidence of a one P marketer.
David Scribner has made an important contribution to the discussion.
I agree with #3. One P marketing isn’t CMO material.
I wish Mumbrella would talk more about what one P marketing really is – advertising & promotion.
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Does the CEO of Virgin Mobile report to the CEO of Optus?
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Ken, have a look at Telstra’s acquisition numbers over the last 3 years. Acquisition is not being ignored.
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Err, Ballantyne is the Group Exec of Telstra Retail, Ken, please keep up.
And TLS has been a great growth and dividend stock since Thodey has come on board.
It’s simply a twee generalisation to rubbish Telstra because the CMO does not report to Thodey. If you believe that, Telstra should have been in all sorts of trouble. Guess what – they aren’t. Quite the opposite in fact.
And anyone who knows Thodey knows he’s pretty much the biggest believer in customer centricity out there, and he walks the walk…..as do his exec team.
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Mr Scribner fails to understand the reality of his own business.
Most people want telcos to be a commodity. Something they don’t have to think about. Telcos are the modern equivalent of your classic Monopoly utilities.
In spite of the research every telco gets but which results in no extra sales, people actually do want a ‘dumb pipe’, as long it it never gets blocked.
The reason so many fled Vodafone, Optus and Virgin to go to Telstra is not because they were clamouring for extras/content/stuff.
They just want the biggest, widest, fastest pipe out there.
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