Can Marketing Save the World?

Last weekend I had an interesting experience.  On Friday and in part Saturday I participated in the International Marketing Congress in Ghent.  On Monday, I was at TEDxBrussels, which by now has become the biggest TEDx in the world.  The two events couldn’t have been more different.

On Friday, IMC marketers were struggling on how to make their initiatives more relevant to their customers.  Here, most speakers stuck to safe ground and repeated the same old same old.  On Monday, TED-sters were challenging themselves and the audience on how they could save the world. Several speakers launched daring prepositions, which sparked debate and even disagreement.

So in the past few days I had this thought.  What if – when considering their relevance – marketers upped their ambition levels.  What if they stopped talking about content marketing, social media and Chief Friendship Officers (?!) and started asking themselves how they could actually change the world?  Make it better?

This doesn’t need to happen on a global scale.  Even though it would take only 3% of the world’s advertising budget to give schooling to all kids in the developing world and 5% would wipe out AIDS.   

It can happen in many small ways.  What if every marketing initiative actually made the world a slightly better place?  Made customer’s life easier?  Did something useful for society?  Helped colleagues in the business to do a better job?

There are hundreds of ways marketing funds could be used to add to the lives of those it targets, instead of intruding on them in a pointless effort of mass-manipulation.  

The good news is that this doesn’t have conflict with the need for marketing to generate a measurable ROI.  On the contrary, customer economics have shown for a while that the intrusion and quick profit game is ending.  Instead, shareholder value is created by being relevant, being engaging and building a reputation among an ever more loyal customer franchise.  Actually doing something these customers consider worthwhile, is probably a good place to start.

So have a look at everything that you have planned for 2011 and ask yourself, how do your marketing initiatives change the world?

8 Ways that Real CMO's Cut Their Budget

I always say that if you gotta' do something, you gotta' do it right. And when it comes to cutting marketing budgets, that rule applies as well. Real CMO's know the question is not to decide how much red ink should be used. They see their challenge in cutting wisely. Reducing marketing spend while keeping sales intact. Ensuring customer loyalty when there's less funds to please the customer. Building the brand when there's no cash to do it.

So when they go to work, they apply 8 principles, and I can only advise you to do the same ...

#1  Do a thorough media-impact analysis
According to a recent McKinsey survey, only 7% of B2B brands and 17% of B2C brands regularly do a quantitative and qualitative analysis of the effectiveness of their marketing spend (i.e. did we actually make some money from all of this?). It takes a bit of analytical effort and budget, but real CMO's use modeling techniques to identify those media and messages which don't contribute to the bottom line. This way they shave 20-30% off their marketing budget without losing a penny in revenues. And as the tools for this have been around for years, they don't pay much attention to the media and agencies which have forgotten to mention them before.

#2 Replace GRP & SOV thinking with Engagement
Traditional shout & sell marketing creates a lot of waste. First, you need to overshoot in GRP's to actually reach anyone. Then you have to accept that the majority of those actually hear your message (from the bathroom?), don't believe your claims. And those who do may not be part of those 8% of shoppers that make up 80% of your sales. Real CMO's invert this logic. Through customer-centric communication planning (also in B2B!) they reach out with messages people want to hear. They engage in conversations. And in the process are prepared to challenge every traditional belief they or their business might have about marketing.

#3 Align Marketing & Sales.
According to a 2008 study by the CMO Council less than 20% of over 500 respondents have got their house in order when it comes to sales & marketing co-operation. The others have relationships which are best described as "intermittent". But when the blind lead the deaf, accidents are bound to happen. Campaigns get launched without sales support. Sales runs into areas which are not prioritised for marketing attention. And funds go out the window. Real CMO's know the answer to this is simple. They put sales and marketing teams in a room and alllow no one leave until every marketing penny is connected to a sales initiative and vice versa. The pennies which don't contribute, get axed. Simple.

#4 Review Your Funnel
And when they're on the topic of sales, Real CMO's also review their funnel. How many customers want to buy their product? How many are ready to become loyal? How many are about to leave? And what is the value of each of them? Most companies lack a real-time view of what is really going on in their business and spend money based on assumptions and competitive benchmarks. Understanding the real shape of your funnel allows real CMO's to rapidly highlight those areas where marketing funds are being wasted, and where - perhaps - they should even spend more. 

#5 Analyse your customer journey
Customers can also help to cut budget. Looking at the customer journey, there are moments of truth and moments where your customer frankly couldn't care less. But when it comes to cutting costs, most companies treat them all the same. As a result they generate bad savings in some areas, while continuing to waste money in others. Real CMO's do a journey analysis which really dives into the insights that drive their customers. This allows them to identify those moments that truly matter. These are the areas they don't cut. But all the others they challenge. Especially as they might find some where their customers are happy the brand stops "marketing to them".

#6 Do a marketing operations audit
While some are exceptionally lean, many marketing departments have eluded the smart purchasing methods and integration we have seen in other business areas. Budgets are fragmented, vendor (read: agency) criteria and briefings are vague, process mapping is limited, the use of technology is virtually non-existant. Real CMO's know that a "hard" audit of their marketing processes, expenditures and vendor/agency relationships can easily generate 10% in savings, if not more. And as it typically simplifies the work they have on their hands, it even frees up their mind for more creative and strategic matters. 

#7 Challenge marketing funds that don't delight your customers
Whether they are called promoters or advocates, or something else "very happy customers are more profitable". In fact, during these hard times, they are the ones that will carry your business through the recession. They buy more, are more loyal, negotiate less and - if you're lucky - bring their friends. That is why real CMO's focus on creating and activating these "very happy customers". And challenge initiatives that do not achieve this. They help sales teams focus on building commercial strategies on delight, and make sure every ounce of customer satisfaction translates into profit.

#8  Challenge marketing tradition
During times of crisis, people are more open to new ideas. Taboos are easier to challenge. That is why real CMO's take a fresh look at the marketing trade and challenge the traditions that have stopped making sense. Use the internet to crowdsource their creative campaigns. Cut out media agencies or even media to set up their own communication channels. Reconsider their channel and retail initiatives (how about a flagship in stead of a pointless billboard campaign?). In short, they relook at what they've always thought made sense, and find better ways to achieve the same at a fraction of the cost.

#BONUS: A structural agency review
Marketing is in a fine mess and part of the problem is the degree to which the profession has industrialised itself. Many agencies are factories that are more geared to produce adverts than make money for their clients. Many media sell what ever they have in stock, rather than look at the audience a brand is trying to reach. Real CMO's understand the difficult predicament their vendors face, when they need to reinvent themselves. That is why they ruthlessly review all aspects of agency and media co-operation. But when it comes to acting, are pragmatic in what they request and even supportive in delivering this. This allows them to slowly turn the marketing ship into the right direction.

And as always, if you have suggestions to make these 8 thoughts better, feel free to comment and amend...

The Marketer's Bushido (SlideShare)

Based on some of the work we've been doing in the area of marketing accountability, I got invited to do a few hour inspiration session at Masterplan 2007 in Bucharest.  As I was tiring of the "Marketing has an image problem" drill, I decided to take a different direction. 

"If marketing is such a dishonerable profession", I thought, "then let's establish a code of honour" (Click here for presentation).

The next thing I knew 120 rapid-fire slides found their way into my PowerPoint presentation which built on an earlier idea I had: a Bushido for marketers.  For background, the Bushido was the - Chinese inspired - code of honour by which Japanese Samurai lived (and died), yet which also can be found across Asia.

I realise that the 7 values I came up with are probably anyhing but complete, and I already want to change some things.  Still, I have uploaded a summarised short version of my work in progress which perhaps may offer you some food for thought.

There will also be a fully annotated version of the complete Marketer's Bushido, but I'm told I should charge some money for that :-) ... coming soon.

Presentation: Thoughts on Marketing Accountability

In the 20 years I've been in business, keeping score has been simple.  When I hit double-digit growth and profit numbers for Mexx or Reebok ... times were good. When my dot-com incubator imploded ... times were bad.  Yet for the years I've had "marketer" on my business card, I've never been able to figure out whether the near € 100 million I've helped burn, really made a difference.  And that bothers me.

Yet when I look around me, not that many people seem that bothered.  That is why I put together this presentation in which I attempt to demonstrate that marketing needs to become more accountable if it is to have a future (and more importantly, how this can be done). 

It goes hand in hand with a number of other projects in the area of marketing accountability we're involved in, like a workshop at MCE, a marketing accountability report due in November and a Marketing Accountability Experimentation Lab, about which you'll be hearing more soon.  Oh yes, I'm delivering it for the first time today at Ogilvy's ROI day, so wish me luck :-)

Reflecting On Marketing Accountability

The Seven Tips for Agency Survival

If advertising is so effective, why are CNN, airport billboards and business magazines free from ads in which agencies promote themselves to business audiences?  I always ask this question "tongue in cheek", but lately the cheekiness is waning.  Ad-effectiveness is plummeting all-round and both brand owners and consumers are nearing the point where indifference turns into annoyance.

That's why I jotted down some tips on what ad and media agencies could do to break out of their downward spiral.  In this, I benefit from ignorance as I've mainly worked on the client side, yet do claim some authority based on the nine-digits I've helped spend (waste?) in the past.

If you feel my under-nuanced, over-generalising, rhetorical approach misses the point, please use the comment section below.  The only way to turn the tide in the agency world, is to start having the painful conversations in the open.  Trying to ruffle a few feathers is my first contribution to get the talking started.  Because remember ... I do love you  :-x

TIP 1: TAKE THE LEAD IN ROI CONVERSATIONS RATHER THAN UNDERGOING THEM

In less than 3 years, agencies will find themselves facing marketing effectiveness specialists asking questions about the campaigns they were involved in.  As these consultants will probably come from outside the industry (c.q. McKinsey, Bain or even us) they will not be interested in a cosy chat about the "message of the brand" or the "creative award that has been won".  Instead, they will zoom in on the money the agency made, or lost, for its client. 

They will field very precise questions like: Why did you recommend to up-weight prime-time 30 second ads in urban areas when the data shows this has negligible impact on actual sales?  Or: Why did you focus this POP campaign on family values as a brand driver when it is clear that value for money is what really moves people to purchase?  They will come armed with data from the next generation media and message optimisers, which already today can identify the initiatives that made money for the brand and even predict those that never will.  And if you haven't got your answers straight, they will really go to work on you.  As an agency, the choice is therefore simple. Take the lead in measuring and managing ROI yourself and be ready for the conversation, or prepare to be the lamb three years from now.  After all, the data they will use then, is being collected today.

TIP 2: DIFFERENTIATE YOURSELF

Here's a challenge. Look at any list of major international agencies and tell me in one word how each truly differentiates itself in the marketplace.  If you can get beyond half a dozen unique value propositions, I want to talk to you 'cause I ain't seein' them.  Everyone has large networks, everyone is creative, everyone has the best people and everyone has a bunch of awards on their wall.  Now look at this from a client's perspective. Here's an industry which claims to advise brands on how to differentiate themselves in the market place, yet can't get beyond bland whiter than white rethoric itself.  Rather than chase every budget-dollar through a middle-of-the-road positioning, agencies should clearly state what they are about and live by it.  Clients should be made to love the agency brand or hate it, yet not even contemplate the commodity purchasing indifference they display today.  After all, if you can't make your own agency stand out in the crowd, how do you expect your customers to ever take you seriously if you claim you can do it for them?

TIP 3: STOP ADVERTISING, START COMMUNICATING

By a cynic, the advertising industry could be summed up as a machine which is commissioned to blast inconspicuous consumers with as many commercial messages as possible, whether they want them or not.  Then, once a year, it gets together to celebrate the team which has come up with the least intrusive, or even funny way of doing so, and highlights their achievement to the world as a sign of its professionalism.  While exaggerated, I am seeing a rapid rise in the number of people embracing this view, and to pre-empt spinning out of control, agencies must let go of their addiction to channel-centric communication planning, and focus on what matters to the end-consumer.  They need to start recommending initiatives which are rooted in respect, insight and passion.  Messages need to be relevant and incite people to say "tell me more" rather than reach for the adzapper.  I realise this is a brutal step to take in a world where commission structures, industry habits, politics and people's beliefs have been formed by 30 years of info-blasting.  Yet when facing the dilemma between walking a difficult path or staying on the route to irrelevance, I know which one I'd choose.

TIP 4: LEARN ABOUT THE STUFF THAT REALLY WORKS

As an ex-shopkeeper, I've built and managed stores from Killarney in Ireland to Kazachstan and I can tell you one thing, there's no medium on the planet that can rival retail and shop-staff.  Yet most regular agencies haven't got a clue on how to manage the point-of-experience.  The world has massively moved online, yet I still meet senior strategists who've never even visited Second Life or wrote a blogpost.  NPS and WOM are the "technique du jour", yet only very few people I know really understand what they mean.  Agencies need to make sure that everyone in the agency's employ truly update their knowledge on the new media, creative and business landscape.  If your people aren't tinkering with alternative media, branded storytelling, retail and the techniques that really matter, encourage them, force them and if they can't do it, replace them.  There is no reason to believe the current rate of change will not continue, so the communication game three years from now will look even more different than the way it does today.  In my book, the time to upgrade your capabilities is when you still have some money in the bank to pay for it.

TIP 5: CHALLENGE THE INDUSTRY ORTHODOXIES

In addition to understanding the new realities, agencies should actively challenge the industry orthodoxies that have stopped making sense (or are close to doing so).  In customer centric communication planning, it is non-sensical to separate media and creative.  In a world where ROI rules, the lingering habit to link an agency's reward to the amount of "money spent" is simply archaic.  With all the computer power and data flying around, media-buying by now could be as automated as buying shares on Nasdaq, yet everyone's still waiting for "industry entrant" Google to make the first move.  Looking at the way the advertising industry operates, it is easy to spot dozens of inconsistencies with the way the world is going.  Agencies that want to succeed in tomorrow's market place need to resist the temptation to go along with the industry politics and actively start breaking bad habits.  Silo-bashing will be a rough ride in the beginning, yet will eventually prepare them for a world which will prove unforgiving for those who haven't evolved.

TIP 6: IF IT HAS NO MEANING, STOP DOING IT

To paraphrase D. Ogilvy, most agency work still treats my wife as a moron and lacks any truly "BIG" idea.  In short, it's ineffective and meaningless.  And while I understand that it's often the client who waters down the boldness, the challenge I put is to fight back harder.  The way the market is going only those agencies who really add to their client's bottom line in the long run will be the ones that survive, being average is a guaranteed path to irrelevance.  If you're truly passionate about what you do, connect your ideas to the brand's bottom line and have the facts to back them up, you have every right to speak your mind and be firm about it.  Going along with the flow of mediocrity will not only devalue the perception of your agency, it will also make your brightest people leave.  Be bold, be confident and if the facts back you, be prepared to stand your ground.  And if committee-ship risks you producing vanilla, remember Ogilvy's words that he would never let an account get so big he couldn't afford to lose it.  Frightened agencies are lackies.

TIP 7: IF YOU DON'T WANT TO OR CAN'T IMPLEMENT THE ABOVE, HARVEST AND START OVER

There is no law against harvesting a brand name, and perhaps that's the way some of the established houses in advertising should go.  Even if the middle-of the-road market will be shrinking, there's still money to be made.  As long as the forces of conservatism are at work, having a clearly "conversative" positioning can be very effective (oh yes, but that relates to point 2 :-)  Some groups already seem to be going this way.  Publicis is eagerly shopping for new boutiques, Carat has got great outfits like Isobar, who say the opposite of what some of the more traditional Carat media execs are actually doing.  Betting on two horses is perhaps the wisest route if your a big player, and harvesting is part of that game.  Still, as a person reading this article, the question I dare ask is whether you prefer to be part of the agency that evolves to the next level, or the one that will get harvested.  If you're agency is already on the path I described, I applaud you and wish you all the best.  If it isn't, join the conversation to change the industry.  Or better, drive it ...