Jul 5, 2021 | Leadership, Marketing
If you asked a room full of marketers if marketing had changed in the last decade, you would get most of them telling you it had changed radically.
On the surface it has, the digital revolution has taken marketing by the neck and given it a great big shake.
There has been an explosion of sales, media, connection, and payment channels, customers are more wary, and do their own research before a marketer knows they are in the market. So called ‘content’ has almost infinite reach, but the frequency is rubbish, as there is so much digital noise, and so much competition for attention, that most of it is the digital equivalent of todays fish wrapper from yesterdays newspaper obituary section. The investment in marketing technology to manage all this has also exploded.
There is a welter of research, and opinion that confirms the notion that marketing has changed, some by very credible organisations. Most however have a dog in the fight.
I asked myself the question again, after a stumbling across this report by Adobe, one of those credible organisations that supports the ‘yes it has changed’ vote, and came to a partly different conclusion.
Marketing has changed, absolutely, at the tactical level. The means by which marketers create, and deliver a value proposition, then turn it into a transaction is unrecognisable from just a decade ago. However, tactical implementation is just a small part of the pie.
Organisationally, marketing has changed a bit. Generally, it is still a function in a group of functional silos that reports to a CEO. A range of new titles have emerged, chief marketing Officer, Chief Engagement officer, and so on, but that does not change the essential reporting and accountability of those in senior marketing roles.
The marketing organisation in large enterprises has also siloed, now there is digital, customer service, technology, and a range of other functional roles within marketing not previously present, but still reporting functionally.
Strategically, marketing has changed little if at all.
The role of marketing is to tell the future, and then to adjust the value proposition to customers ahead of the changing preferences and behaviour. That has always been the case, and remains so.
The only strategic change I can see is one of leadership.
In the past, marketing was a relatively passive corporate player, relegated to the role of managing one of the largest expenses in the P&L. Now the value of enterprises is so much more in the hands of intangibles, that marketing is increasingly demanding a seat at the big table, which demands that marketers are able to lead their peers and boss. Unless they can achieve this position of leadership, they will remain the simple gatekeepers to one line in the P&L, rather than being responsible for the future health of the enterprise.
Look at it from the other perspective.
Marketing has changed little strategically, but strategy is by far the most important component.
It has changed somewhat organisationally, and while it is important, in most areas, it is not a game changer.
Tactically, marketing is unrecognisable, but who really cares, tactics are just that, short term, able to be changed in real time as the situation evolves. Marketers need the organisational capability to be able to change in real time, but the impact of failing to do so is generally limited in the short term.
The marketing groups that will be successful into the future are the ones that are successful leaders of their organisation. To achieve this status, they must be able to identify the priority areas for investment and activity, and drive that priority by removing the organisational constraints that operate in every enterprise, which are not directly accountable to marketing.
Well, they are not accountable until marketers are in the corner office, which should be happening more and more, as they are the future tellers. Those who generally occupy that office are the engineers and accountants who are really good at reading the past in the data, and hoping the future looks similar.
Who is next in your corner office?
Jul 2, 2021 | Customers, Marketing
Every second self-appointed digital marketing guru who offers to help me, making the offer in a mass email, proves the point in the headline.
They have a list, bought from somewhere claiming to have a ‘relationship’ of some sort with me. However, they still manage to spell my name, or that of my business incorrectly, are mistaken about what my business delivers, or make exorbitant claims about what they can do for me. There are many ways to demonstrate they know nothing about me, my business, or the sorts of challenges I face. ‘Spammy’ emailers seem to find them all.
The money is not in the list.
The money is in the message.
Had they delivered an offer to my inbox that might be of interest, I may have read it, and you never know, taken it up. However, being specific requires work, and the tailoring of the message towards the pain points uncovered by that work.
Doing the work means the collection of data, building a profile of the me and my business, presumably falling into the bucket of ‘ideal customer’ for the specific product being sold. They must ensure there is alignment between the problem the product seeks to solve, the pain points being felt, and the communications being sent. Failing in any one of these means the email recipient falls into the 99.9% who make the 0.1% success rate possible.
Again, the money is in the message, not in the list.
Header cartoon credit: Dilbert and Scott Adams. Again. (Sorry, could not resist that one)
Jun 30, 2021 | Change, Governance, Marketing
I have been at this ‘marketing’ game a long time, long enough to know that the bits you see, as a customer, prospective customer, or just by accident, are only the tip of the iceberg.
For many so-called marketers, what you see is the whole iceberg, they are ignorant, wilfully, or otherwise of the underlying factors that go into making a success of the process of ‘marketing’.
Despite the market research, social tracking, customer satisfaction measurement, and all the other stuff that we can do, the customer is often ignored.
Why is it so??
- There is little ‘fit’ between the market and the product/service being offered. This is usually because there is no ‘seat in the boardroom’ for customers. This should be the responsibility of the marketing people, but they so often revert to cliches and fluffy qualitative assertions that they are ignored. I really like the practice of Amazon, where there is an empty chair in every meeting, signifying the customer.
- Products are designed back to front. Businesses assemble the resources they have available, and build products they think customers will buy, rather than identifying customer problems and working backwards to assemble the resources that solve them.
- Marketing is usually seen as a subordinate function. The heads of the accounting, engineering, and operational functions are more likely to wield corporate influence than marketing. Partly this is the fault of marketers, who have systemically failed to speak the language of the boardroom. Marketing, which is about the future, tends to speak ‘qualitative’ whole other functions are all about the past, and can speak authoritative ‘quantitative’. This difference makes them more believable, as our brains like the certainty of quantitative. Partly also it is a failure of leadership. How many CEO’s are you aware of that have ‘marketing’ as their core skill?
- KPI’s rarely involve customer metrics of any value. I am a huge fan of tracking performance, but measures that do not relate to the manner in which the job done satisfies customers is a metric that is only looking internally. Some are necessary, but most are not, in my experience. Then, you see the occasional customer metric touted, and it is the number of likes on a social platform, vanity measures that again mean nothing. In fact, such measures are worse than nothing, they are misleading.
- Marketers by their nature are looking forward. This tends to enable them to be blinded by the newest shiny thing that emerges. This constant response to the shiny object serves to erode any focus and consistency of brand building, customer awareness and loyalty. When you are constantly moving around from video to podcasts, clubhouse, Tik Tok, and all the rest, you become hard to follow.
- Poor key strategically important customer definition. Too often marketers are unable to focus on the niches where the really powerful returns hide. The old cliché that you cannot be all things to all people prevails. The more important to the few who will buy your products and nothing else you are, the better. The temptation however to try and broaden the appeal, just a bit, to get a few more customers just dilutes the power of the value proposition.
- Innovation is messy, suboptimal, and experimental. Marketing and strategic development, whether it be of product, brand, customer groups, geographies, always has significant elements of trial and error, risk, and the inevitable failures. In enterprises that run on continuous improvement and optimising processes, this ‘messiness’ is unacceptable, and so is minimised. The result is the evolution of the enterprise stalls for lack of innovation, and marketing cops the blame. The corollary is that marketers are intimidated by their KPI’s and the status quo, into not making waves, so are always playing safe. This results in bland, undifferentiated marketing that has little impact.
- Marketers are not often the smartest people in the room. It seems to me to be a sad fact that this is often the case. From the outside, marketing looks easy, so those who do not seek or are unable to make the grade into professional training often seem to gravitate to marketing. Of the outstanding marketers I have seen and hired, many seem to come from a professional background. Scientists, lawyers, accountants, engineers, looking for something that values their creativity in bigger doses than their first profession. Running a marketing function in a large company for some time, I always went looking for these people when hiring, although it did take me some time to figure it out.
- Marketers fail to engage the other functions that are critical to success. Marketing is the only function that needs the co-operation of others over whom they have no functional control, to be successful. While this is a great test of leadership, it most often ends in tears. How often have you seen an operations manager whose KPI’s are all about factory efficiency, take a hit because the marketing manager wants to do a factory trial of something the ‘Ops’ people regard as a fantasy?
- The pace of superficial change is faster now than ever before. However, human behaviour does not change easily. The tools we use are becoming like our underwear. The reasons we wear underwear do not change, but the brands, types, cuts, and colours of the underwear we buy can change easily. This profound difference is most often shovelled under the carpet, kicked away by the seeming attraction of an apparent change in short term choices we make, which are at odds with the underlying drivers of behaviour. The unfortunate added outcome of this is a dilution of the creative impact of advertising communication. When you have to produce volumes of ‘content’ on a short term timetable, the impact of that communication is necessarily diluted. We fail to give the creative part of the communication process sufficient time to generate the attention and magnetism required in a frenzied world of fragmented communication.
- DIY syndrome. Marketing, like everything else has become increasingly fragmented, and specialised. No one person can cover all the required bases, any more than a doctor can be a specialist in more than one narrow niche of medicine. Yet many fail to recognise the competitive necessity of engaging specialists for specialist tasks. This can be addressed in large companies by very specific job descriptions and skills of those employed, but in SME’s, it requires often expensive specialists to be engaged on an ‘as needed’ basis.
The good news is that all these shortcomings can be overcome. The bad news is that it takes large doses of experience, leadership, and time, to do so
Header cartoon credit: www.TomGauld.com in New Scientist.
Jun 28, 2021 | Collaboration, Marketing, Sales
In many major companies, there has been a number of new positions created in the last decade to try and accommodate the changes in the strategic and competitive environment.
Among them has been the ‘Chief Revenue Officer’ (CRO)
In some cases, this reflects the need for increased collaboration and sometimes convergence of marketing and sales. In others, it is just the fashion, the latest management fad.
This seems to be particularly the case in businesses where another of those-acronym driven fads has evolved, ABM, (Account Based Marketing)
The barriers to the integration of Marketing and Sales are high, and deeply set into the functional status quo of most organisations, and highly resistant to change. However, the emergence of digital tools has accelerated the trend, and the recent Covid challenges have been a catalyst for further and quicker evolution than would otherwise have been the case.
For years I have been advocating ‘Alignment’ of marketing and sales to the needs of specific customers, and the ways to achieve that outcome.
Removing the Marketing and Sales labels has proved to be useful to the integration. The emerging combined function recognises that the responsibility of each is simply Revenue Generation, or ‘RevGen’
The first substantial consulting assignment I had 25 years ago introduced my client, a domestically owned multinational supplier of ingredients to the food industry, to Strategic Key Account Management. (SKAM)
We went through a process of identifying the specific needs of key customers, and tailored our marketing and sales effort, to the expressed and often jointly uncovered needs of customers, with whom we engaged in the process.
Those workshops and subsequent implementation efforts are as relevant now as they were 25 years ago, probably more so. It is now just a component of Revenue Generation, a descriptor of the best way to make profits by delivering value to customers.
The core assumption of SKAM is that that only by doing one or more of the following, could we be successful.
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- Assisting our customers to increase their sales,
- Actively reducing their costs,
- Increasing their productivity.
We set ourselves the task of identifying how we could achieve at least one of those three things, preferably two, and focussed our efforts on delivering those outcomes.
Predictably, it was a successful initiative, customers loved the collaboration. Inventory levels reduced, as customer service levels and responsiveness increased, generating increased trading profits.
Perhaps it was too successful, as the business was then sold by its parent company, at a very high multiple to a multinational competitor.
Jun 21, 2021 | Branding, Marketing
Retailer ‘brands’ have taken a huge toll on the ability of proprietary marketers to profitably market their brands and build markets in FMCG.
A proprietary marketer may spend several years and make a huge investment in product R&D, market research, advertising and listing fees in various forms in order to get a product on shelf. They carry all the risk in this exercise.
Retailers carry no risk beyond the inventory risk when they choose to stock a new product. That inventory risk would normally be mitigated by the supplier, at least partially in the deal to secure initial shelf space.
Retailers have at their disposal detailed information about the performance of every product on their shelves. Volumes, margins, behavioural data such as what consumers have in the same basket, what products have been removed by consumers from their basket, and price sensitivity and elasticity.
Based on this information, they can reverse engineer formulations, and have a contract manufacturer supply a direct copy very quickly, with very little risk.
An innovative proprietary product will normally be supported by advertising, which will also often benefit the housebrand product.
If a small manufacturer copied a product and launched it into the market, perhaps via alternative channels, the proprietary marketer may have the option of legal action for passing off. It is illegal to mislead consumers, yet this is happening every day on supermarket shelves, in the name of choice.
It seems a different set of rules applies to the major retailers who have all the power in the relationships.
Over the time I have been watching FMCG markets, the level of investment in product R&D, and brand building has declined substantially. Many brands that had created and built markets have virtually disappeared. The investments previously made in product and brand growth have been directed towards retailer profits, and to be fair, consumers have benefitted by lower prices in some product categories. The downside is the lack of innovation and category building which delivers benefits over the long term, that has occurred as a result.
I do not have an easy answer to the dilemma faced by marketers, and it would be suicide for any manufacturer to sue Coles or Woollies for passing off a housebrand, but in an idle moment, it may be a question worth asking?
Jun 15, 2021 | Branding, Marketing, Strategy
A few weeks ago, Apple released an upgrade of their operating system, iOS 15. This release includes a (potentially) monumental change in the digital world of communication. Its default is to turn off the ability of a third party to track your online activity. If you are relaxed about being tracked, you can opt in and continue to be tracked.
This will be an opening shot in a war between very powerful vested interests.
For years there has been genuine and rapidly increasing concerns about the volume and use of the data collected by apps, and the privacy invasion and leverage that data can generate. As the concerns grew, so did the mumbling from the advertising industry about the value of targeted ads, and soothing bullshit from Facebook.
Apple has gone in hard by making opt-out of tracking the default of the new release. I suspect Apple sees it as a point of competitive leverage that they can exploit. Their advertising is making this differentiation not just clear, but an explicit reason to move to Apple.
I think it is an absolute game-changer.
There are several dimensions to the vested interest battles I expect:
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- Facebook Vs Apple. The business model that has made Mark Zuckerberg one of the world’s richest men, and arguably one of the most powerful, is based on the ability of Facebook to track activity and market their ad services based on that ability to target. Removing that ability will compromise that model, and Zuckerberg has not demonstrated any sort of tolerance to any interference to his ability to accumulate more and more billions.
- Apple Vs Android. For many consumers, the ability to turn off tracking will deliver a valuable competitive advantage to Apple over Android. This presents Google, the owner of the Android system with a dilemma. Do they follow and compromise their own ad business, or allow Apple to retain such an advantage in mobile computing? Indeed, is the attraction of an automatic ‘No cookie’ environment as strong as I anticipate?
- Regulators Vs Tech. For the past 5 years or so, regulators have been suggesting that some sort of regulatory framework was necessary to protect the privacy of consumers from the rampages of ad targeting. At the same time, regulators have demonstrated a rancid inability to even understand the basics of the challenges that such regulation will face in implementation, enforcement and unintended consequences.
- Advertisers Vs Ad fraudsters. The emergence of ad fraud because of so called ‘programmatic’ digital advertising, has offered fraudsters the opportunity to milk billions out of the system unhindered. Advertisers controlling large budgets have been largely unwilling, and perhaps unable to stem these losses, so just paper them over with cliches and bullshit. In a 2017 presentation to the IAB, Marc Pritchard the CMO of P&G publicly took a stand against the ‘crap’ as he called it spawned by digital channels. Crap ads, and the fraud perpetrated by those who assembled digital advertising inventory. The P&G initiative to stop advertising in the absence of hard data about the reach to humans rather than bots, and the location of ads placed, was followed by several other major advertisers. Sadly, the words were more hollow than substantial, as the fraud continues. The fraudsters will not go quietly, and based on performance to date, advertisers are too timid, or seduced by the seeming ease of reach, to do much. Dr Augustine Fou in his research highlights the tactics, breadth and depth of the fraud being accepted by advertisers.
- Consumers Vs advertisers. Marketers have found their ability to communicate compromised by the never-ending demand for new and different content to throw at the digital channels. They no longer have the time, and increasingly the inclination, to do the foundation work that leads to creativity and advertising cut-through.
Apple’s advertising revenue is very modest, by comparison to Google and Facebook. It has little to lose from this change. Facebook and Google by contrast have huge ad revenues. In Facebooks case, advertising is 98% of its total revenue, for Google the number is about 80%.
This change by Apple, if it creates a surge of iOS market share from its current 15% will compromise these revenues, and erode the business model of both Facebook and Google.
It certainly creates a strategic dilemma for the Google owned Android software, powering around 85% of mobile devices currently. Do they follow Apple, or take another route?
For marketers who understand ‘marketing’ as distinct from the digital ‘new shiny thing’ syndrome, who treat ‘marketing’ as an integral part of their investment in future prosperity, it will be a boon. They will be much better placed to leverage real marketing skills that the large businesses have lost.
To the question posed in the headline: the degree to which consumers demonstrate they value privacy, will be measured by the rate at which they will switch to Apple to protect it. Alternatively, if Google decides to follow with Android, game over.
Note, an hour after publishing: I omitted to mention above that Google pays Apple something around 12 billion a year to remain the default search engine on iOS and Safari. This is so Google can collect information on your searches on Apple. For Apple, it is money for jam. If I am right, and there is a significant move towards the auto opt out in the new iOS upgrade, this 12 billion will erode over time, so Apple does have a bit more skin in the game than noted above.
Header cartoon credit: Dilbert explains tracking codes.
