CMO STRATEGY
Edited by
Natalie Zmuda,
nzmuda@adage.com
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Making the move from chief
marketer to the corner office
Steve Cannon may be running the show at Mercedes-Benz USA, but he’s still
focused on brand as the differentiating factor, not logistics and distribution
THE CMO
INTERVIEW
STEVE CANNON
■ BY STEPHEN WILLIAMS sawilliams@adage.com
FOR STEVE CANNON, the difference
between running marketing operations at Mercedes-Benz USA and
running Mercedes-Benz USA is
about 60 days.
Mr. Cannon, the brand’s
CMO for five years, became chief
executive on Jan. 1. It was an
upheaval for the 50-year-old.
He replaced Ernst Lieb, who
was fired in October for
allegedly misusing company
funds and is now suing
Daimler, Mercedes-Benz’s
parent company, for wrongful
dismissal. The suit is set to be
heard in a court in Stuttgart,
Germany, on April 12.
Regardless of the circum-
stances, ascending from chief mar-
keter to chief executive is rare.
“CMOs are well-prepared for
the responsibilities of a CEO, good
communicators, polished in front
of crowds, but they haven’t man-
aged a business,” said Tom Seclow, manag-
ing officer and practice leader at executive
search firm Spencer Stuart. “A lot of things
CMOs do well are geared toward an exter-
nal audience. … They are the advocates for
the company. That’s a super-valuable skill
set. But they are not immersed in opera-
tions, how the company manufactures or
creates services.”
Mr. Cannon’s migration from a big desk
to the corner suite is still a work in
progress. Shepherding a German brand
with a heritage like Mercedes-Benz (which
claims it built the first automobile, 125
years ago) in one of its major markets is not
a job assumed lightly. But he said he’s con-
vinced that his marketing background and
laser focus on the brand have prepared him.
At the moment, Mr. Cannon is thinking
class—C-Class, E-Class, SL-Class—and
brand, with a capital B.
“My view is, what is more important to
our future success than our brand?” Mr.
Cannon told Ad Age during a meeting at
corporate headquarters in Montvale, N.J.
“Parts, logistics and distribution are not the
key to success in this marketplace. In an
environment where the competition is
phenomenal—with products, quality, and
all that evening out—one of the most dis-
tinguishing factors is brand.”
If the three-pointed star lies heavily on
Mr. Cannon’s shoulders, it doesn’t show.
(His reaction when he was bumped up in
December: “It’s great to be CEO.”) A
graduate of West Point, he served as an
Army Airborne Ranger in Germany
before beginning his auto-industry career
at Mercedes-Benz in 1991. He was part of
a small team in Germany that developed
plans for the brand’s first SUV, the M-
Class. And in his new role he’ll oversee a
U.S. rollout of its smallest cars, the A- and
B-Class.
Once a CMO, always a CMO?
It depends on what kind of company you come from. In
certain ones [such as large packaged-brands companies],
it’s natural for a CMO to move up. If you think of the
backdrop marketing operates in, with all the social
media, all the technology, you have to be metrics-based,
technology-based. You’ve got to stay fast and flexible.
You have to adapt, to carve out money
from mobile to serve social. You have to
have a certain amount of risk appetite,
take some strategic leaps of faith. All those
things led me nicely into the corner office.
Recently you hired Bernie Glaser
as your CMO. Will you be a back-
seat driver?
I won’t be, but I’ll be involved in marketing.
… It’s the single largest expenditure within
this company. I’ll continue to give Bernie
my two cents. I’m not going to
micromanage, but in a major launch
campaign, it won’t be “Here, Steve. Here’s
finished work.” I had a phenomenally free
hand as CMO: a boss that came out of
fixed operations, and marketing was not
his area of expertise. We carved out a
very trusting relationship.
And your agency, Merkeley &
Partners, stays in place?
I’m a firm believer you get the advertising
you deserve. It’s always easy for a CMO to
come in, do the whole review thing, an
ego deal I didn’t want to participate in. As
long as you keep [the agency] on the
edge, why jump ship? Over my years
they’ve delivered terrific work.
Mercedes has been perceived as
a purely aspirational brand in
the U.S. One market you’ve pretty
much ignored is small cars.
We have a new generation of products
coming in 2013, the A-Class and the
B-Class. We’re very comfortable that the
market is ready. We wouldn’t have said
that three years ago.
Does a $20,000 Mercedes devalue
the brand?
There’s more danger [in not having one].
Jaguar is a perfect example. If you don’t
expand and make your brand accessible,
you don’t have entry points that feed the
system. We have the best loyalty rate in the
business, and the more people we capture,
the more likely we’ll move them into our
ecosystem. Everybody’s going to have to
downsize. If we’re going to get to 2025, to a
fuel economy of 54 miles a gallon, we’re
going to have to get more out of less.
SUPER
SPONSOR:
Mercedes will get
plenty of exposure at
the next Super Bowl.
about it, the NFL
is the No. 1
property—it’s
TiVo-proof. With
the Saints at the
top of the leader
board in the NFL,
there are games
on NBC, CBS and
You refer to attracting younger
buyers’ consideration. How do you
do that?
ESPN. The brand exposure is
tremendous.
Social media wasn’t there when I started,
and we spent millions on it last year. [We
did] a Twitter campaign, and we went
from zero to 78,000 followers on
Facebook. This is out-of-the-box for
Mercedes. … We’re learning fast, knowing
that social media will line up with other
distribution channels. We’re no GM, so we
can’t have a $2 billion marketing budget;
we have to be more selective.
There is no love lost between your
company and BMW, and at the end
of last year, BMW took the top sales
spot—barely—in the U.S. luxury
segment. Upsetting?
Believe me, I’m a competitive guy. I want
to beat them without any sort of sales
engineering. That doesn’t lead anywhere
except to discounting, cars going into
fleets, residual-value problems. That
crazy dynamic was one of the things that
led to GM’s blowing up.
Learn more about
the successful
strategies of top
CMOs. Go to
Mercedes skipped the Super Bowl
ad frenzy this year. But next year
the game goes to the Mercedes-Benz Superdome in New Orleans.
How did that come about?
It started as a cocktail conversation with
Tom Benson [owner of the New Orleans
Saints] on a dealer trip to Germany. They
had just gotten naming rights for the
stadium from the state. When you think
Chasing a title can lead to bad behavior.
… But even if we had won you’d never see it
in an external communication. Maybe
Audi would, because they’re a challenger
brand and are doing those kinds of things
in the U.S. to put them on the same [level]
as Mercedes and BMW. They can use some
of those communication tricks that we
would never use.
