Posts filed under General

How Do We Overcome Corporate America's Skepticism about Advertising and Marketing?

This is a tough subject, because it is multi-faceted.

To begin with, as a direct marketing consultant I face client skepticism about marketing almost every day.

Many companies have spent a lot of advertising dollars that did not yield the revenue they needed or expected. So they draw conclusions about what caused the failure.

Some will never touch Pay Per Click with Google again because it didn't work. Or direct mail doesn't work. Or we tried outbound telemarketing three years ago and we found that it just cannot deliver the ROI we need.

More often than not, the marketers they hired did not know how to develop the value proposition, lacked objectivity or knowledge to create multi media strategies, or they simply planned and implemented the test incorrectly.

The bottom line -- marketers come with varied backgrounds and poor training. So that skepticism is valid.

In turn, I do not readily believe what clients tell me about the effectiveness of their marketing initiatives. Nine times out of ten, they either did not track the response correctly (or at all) or structure the effort as a test from which an analyst could draw reliable conclusions.

But to be truthful, marketing as practiced by most practitioners lacks discipline. So our reputation is well earned.

The process for achieving success in direct marketing is well documented. But few marketers and clients understand the considerable contributions the direct marketing strategy as a whole will bring to their business.

And unfortunately, the shrinking pool of expertise in this area makes my job more difficult because of the resulting skepticism brought about by inexperienced marketers and the growing number of new media platitudes that are propagating unchecked in the trade press and blogesphere.

A March, 2011, Advertising Age addressed one of the primary reasons why expertise and passion for marketing may be in decline.

The article, "Left to Fend for Themselves, Employees Feel No Loyalty to Agencies," the author reports on a speech given by global CEO Andrew Bennett of Havas' Arnold Worldwide.

Why is this an important issue?

For one, the advertising industry remains a primary breeding ground for CMOs and other marketers. And secondly, the article begs for a reason why this is so.

Note this from the article:

As for training, employees said they generally had to essentially train themselves, or figure out many aspects of their jobs on their own. According to the survey, there was a large disconnect between what employees and managers are saying in terms of training: 90% of employees said they learned by figuring out problems on their own. Conversely, 25% of execs said employees figured out their own issues. "The average Starbucks barista gets more training than the average communications employee."

Lack of training is the symptom and not the reason for the dearth of marketing talent. This lack of talent development comes from a focus on short term profits that favors shareholders rather than employees and clients. Furthermore, this trend exists throughout the whole of American industry and not just with agencies.

Most interesting, however, were comments from readers reacting to the article.

Training your people is not an elective, Business is getting harder, clients are becoming more senior, and agency people are more unprepared than ever before to address increasngly complex marketing challenges. ROBERT SOLOMON NEW YORK, NY

Agency staff are getting younger, less seasoned, and are virtually untrained. Some manage to find their way, others don't." Jamie Harding Birmingham, AL

The publicly held holding company model essentially destroyed the large agencies they hold. In order to constantly increase earnings per share, and satisfy large clients desire to hold down costs, the holding companies must reduce cost of goods sold (talent) to increase margins. The holding companies are trying to "save their way into growth" and this has never worked in the past. CHARLES LARSON INDIANAPOLIS, IN

So how do we overcome Corporate America's Skepticism about advertising and marketing?

Like most big problems, it begins and ends with stronger leaders and better trained employees. Those who benefited from mentors, company training and strategic vision need to hand their knowledge down to the next generation. Those endowed with a passion for marketing excellence need to continue to grow and share that growth with others at every opportunity.

Fortunately, many of you are teaching in universities, training corporate staffs and mentoring future leaders. We need you more than ever.

Posted on November 2, 2011 and filed under General, Recruiting Talent.

What's Important to Today's CMOS?

For the first time in three years of taking this survey, research shows that the predominant driver for CMOs is marketing ROI.

In a 2010 trends and buzzword study by Anderson Analytics, 530 of 1800+ active MENG (Marketing Executives Networking Group) members across the US participated by responding to an extensive survey. Bear in mind that these are marketing executives who have made $160,000 (excluding bonuses, options etc.) or more at one point in their marketing careers. They are interviewed by select members of the group before they are granted membership.

Key among the findings was a three year summary chart showing the most important marketing concepts based on survey respondents. Here is a quote summarizing the chart.

-Over the past 3 years, Marketing ROI has increasingly become more important in the minds of marketing executives

- Customer Satisfaction and Customer Retention are no longer occupying the top spots

- While steadily growing in importance, Social Media officially made the top-10 list for the first time this year

- Mobile Marketing also appears in the top-10 list for the first time, and ranked ahead of Social Media 

This chart shows the top ten strategic focal points that evolved over a three year period for these marketers. No doubt the tight economy promotes the idea that all advertising dollars must be accountable. Even trends like Social Media must now withstand the ROI test in order to earn the credibility of both marketing and operational executives. 

 

Online marketing continues to evolve at a fast pace deemphasizing clicks in favor of trackable sales. The traditional emphasis on the branding, targeting and channel integration remain critical issues and are likely to grow in importance. (To download the full report in PowerPoint, just click here.)

How would you interpret this chart. All of us who read this blog would appreciate your thoughts. 

Posted on October 18, 2010 and filed under Direct Marketing Strategy, General.

The State of Marketing in 2020

 Borrowing heavily from my marketing peers, this compilation looks to the future of marketing. Some of the comments contradict each other because the comments come from a number CMOs who are MENG members. 

The ideas revolve around three core groups. These include consumers, the retail and other traditional channels as well as all areas of advertising.

In summary, most commenters think the biggest impact will come from the advancements in technology as companies and their customers become more proficient and reliant on its use.

Consumers
 - Consumers will continue to push for telephone support and access to real people to handle complex customer service problems such as tech support and billing issues.

 - Consumers will continue to demand higher quality, people who can speak English and stronger warranties as products continue to proliferate thus increasing competition.

 - Retailers will be forced into state of the art database marketing offering customized products and services based on predictive models and finite geographic targeting.

 - Less disposable income switching more to value at the expense of costly brands.

 - Technology will make specific products more easily available requiring less research. For example, consumers can already scan items on the iPhone to find the best price.

 - Demographics:  today, 75% of the people 70 in the US are white and 25% of the people under 10 are white. These changes position multi cultural marketing as the norm rather than an option. Though more diverse, the population as a whole will become increasingly older.

 - Advertising hype looses credibility in the face of easily available information.

 - Checks will disappear completely from the scene as chips imbedded in the skin will contain all required personal information more powerful than today's ATM card.

 - Printed materials such as books will always have a market, but they will print on demand from electronic files. The consumer will print the book or order the book preprinted depending on price and convenience.

 - The land line telephone and Ethernet connections will still exist, but will be used for very specialized reasons. The need for security will determine the level of use for these old technologies.

 - Complete medical histories will exist in one place giving doctors an important diagnostic and prescription tool.

Retail

 - Malls will become less and less viable as centralized retail outlets due to high costs and customers' decreasing willingness to shop the old way.

 - Large retailers will take on more responsibility for marketing products that support the store's brand.

 - The Internet rather than the local store interacts with the customer to sell products. The store becomes the warehouse where customers can get product support and pick up items when they don't want to wait for delivery.

 - Television usage is declining among younger people and is being replaced by the internet. But TV, Internet and gaming will merge into a single device making targeted offers to users of all ages.

 - Hard copies of magazines, newspapers and books will be as common as hand-crank telephones.

Advertising

 - Marketers will combine branding, image advertising, positioning and direct marketing strategies for true communications integration if they are to succeed in the new world.

 - Analytics and customer intelligence will lead rather than follow the creative and strategic media planning processes.

 - Customer intelligence will take a seat at the C level in most consumer goods and BtoB companies.

 - Persuasion from customer behavior patterns will allow marketers to understand customer needs at a greater level of specificity and timing as the mass of data becomes more usable with the new analytic tools.

 - The need for speed and marketing expertise will become a core competency of successful companies.

 - International marketing becomes the norm rather than the exception going from less than 10% of companies of all sizes to more than 75% (needs research to validate the 10% assumption). This means that medium sized and small companies will be in the International game competing with the giants. 

 - Social media will increase in importance as consumers rely on peers for product recommendations rather than company representatives who gain financially in a given transaction.

 - The Internet becomes more expensive as social sites and search engines monetize their businesses for the long term.

 - Spam will continue to grow as a problem for email marketers. Advertisers will increasingly rely on email for CRM and cross selling products to existing customers with refined offer personalization. But email as we know it will not overcome the stigma brought on by spam to make it a core new customer acquisition channel.

 - The Internet, and attributable profitability is direct marketing, and I think that will be most important.

 - Mobile messaging, customized promotions, self selected communications (permission emails or mobile messages) will grow exponentially.  But traditional email messaging will become a smaller part of  the mix.

 - Today's internet, television, and printed materials will be delivered through "reading" glasses which can be controlled by hand and finger gestures not unlike sign language.

 - The Post Office -- get ready to imagine a world without the post office. They are so deeply in financial trouble that there is probably no way to sustain it long term. Email, Fed Ex, and UPS have just about wiped out the minimum revenue needed to keep the post office alive. Most of your mail every day is junk mail and bills. (Poster's note: some of you will take exception to this one.)

 Conclusion
"I see an unstoppable shift of power from seller to buyer, and I see that flowing through to new leadership for modern corporations, coming from the people who grow up managing the external instead of the internal. Said more simply:  I think marketing is going to increasingly become the route to profit and growth, and the CEO office."

Another point of view:
"This is not a popular belief but marketing has not and will not change. What changes are the distribution channels and media to communicate.  Example:  Twitter, Facebook, yada yada are nothing more than a channel to reach consumers. You still need business and marketing strategy, content management strategy, brand positioning, relevant messaging etc. "

Or what about this one?

"There is no way you can project 10 years out. Look back 10 years. Could you have projected social media's impact on society? Mobile Marketing wasn't a possibility. Online video. Consumer barcoding. I can't even schedule this year's summer vacation."
I was wondering if you could think of other changes that we need to prepare for?
Posted on September 24, 2010 and filed under Direct Marketing Strategy, General.

Advertising Agency Suppliers Beware !

Suppliers to agencies, here's a disturbing question for you. When your agency contracts with outside suppliers, will the agency pay your bill if their client does not pay? The agency... right? Wrong.

In this type of scenario, the agency develops its contractual language to say that it is the supplier's responsibility to collect the funds from the ultimate client in case of default.

Why is this?

Well, over time agencies have evolved what we call an "agency of record" relationship. This means they act on behalf of the client as a purchasing agent. The agency represents the client in every way except they do not bear the financial responsibility for the invoice. The bill goes to the agency, but the agency pays the bill only after their client pays them. If the agency pays before the client, they only do so in full assurance their client will pay for the invoice.

This approach has worked well for many years with mass media. Media companies are structured to go after advertisers who do not pay their bills.

But large volume printers, service bureaus, digital service companies and lettershops no longer accept such agreements automatically. Market pressures have forced many suppliers to resist such arrangements by turning down the work.

What is most disturbing is that many agency service staff are unaware of how this approach stresses their supplier relationships. They often wonder why suppliers don't like to go through agencies thinking this is a client control issue.

It is partly that. But another significant reason for this stress has to do with the vague supplier invoice payment agreements.

My take? As the market improves, I suspect that suppliers will force change with this arrangement. And farsighted agencies and their clients will want to level out the playing field for their talented suppliers.

Dear reader, is this your understanding of the typical agency contracting arrangement?

Posted on February 5, 2010 and filed under General.

Just Cut the Top Off the Car!

Have you ever taken on a marketing project you just couldn't get your hands around because nobody was clear on the objective or even what questions to ask?

You can tell when its happening.

You get that sickening feeling. You start asking questions and the boss finally says, "JUST DO IT!!"

The problem is, you think you understand what he wants, but the way he wants to go about is filled with holes that could lead to your demise.

You know it can't work.

What's worse, you know the lack of planning and process dooms it to failure and you're the one who will be blamed for the failure.

Here's a case in point.

Abut 15 years ago when I was the head marketer for a healthcare concern, the boss wanted to see what could be done to drive patient business to our pain centers in California.

So on the advice of one of the physician partners we developed this small 10" ad for the LA Times. The Head office had ordered an 800 number to respond to the calls coming in from the one time ad.

The physician had warned us that the demand for this service was heavy and it was profitable to the organization.

In anticipation of this heavy load, I researched the availability of an inbound service and prepared the database for recording the calls and comments. Otherwise all phone calls would have to be handled by an already overloaded clerical and nursing staff. This process took about three days to locate the service and plan it with the appropriate script and lead flow process.

By this time, my boss was getting impatient to run this print advertisement that everyone had already signed off on. The front office had set up the 800 service that was scheduled to be installed the next day.

But I was concerned that the 800 number would not be ready to field the calls and the inbound service overflow technicalities were not yet resolved.

At that point, my boss pulled me aside and told me the story (I think it was related to Lee Iacocca) when Iacocca asked his engineers to develop a convertible.

After 6 months of planning to reenforce the structure, Iacocca asked the engineers to show him the car. They asked for another 6 months. The engineering for the particular model required a total redesign.

After another 6 months the car was still not ready.

In anger, Iacocca yelled, "See that sedan over there? Cut the top off the (curse word) car and bring it back to me."

About 30 minutes later the nervous engineers brought it back. Iacocca got in and drove it around the building.

He got out and said. "I like it. Make that car."

So my boss told me to just cut the top off the (curse word) car!

We ran the ad.

The next day when the advertisement ran I got a call from the LA Times saying they were getting a number of calls from irate callers saying the 800 number was out of service. Then I started having to answer dozens of calls to spread the load.

As I anticipated, the 800 number was installed three days after they said it would be ready.

By the second day of responses, the calls started coming out of other cities in California , then from nearby states, then Europe, South America and a number from Japan. We got calls from both patients and their doctors from all over the world.

Then we overwhelmed the office people and nurses with calls that succeeded in totally disrupting the clinics' business.

We just cut the top of the (curse word) car!

The bottom line... I was blamed for running an advertisement that was too large. We never ran the advertisement again.

My take: successful small or large programs are never simple in this business. Process is critical to success. So welcome the people on your team that can help you stay out of trouble and succeed.

As for you loose canons out there. Please stay out of our way so we can do our jobs. Keep your ideas flowing, but never, ever attempt to do it all yourself or ask us to short change the project you want so much to succeed.

Posted on November 7, 2009 and filed under General.