The recent Association of National Advertisers annual conference symbolized a massive turning point in the history of marketing.
 The ANA emerged from a strategic slumber to put on a conference which hosted the best-of-the-best in the marketing world -- star CMOs from the leading brandowners talking frankly and revealingly about the industry-wide issues for which the ANA is the only legitimate forum.
Three overarching issues emerged as the focus areas for these CMOs.
(1) The consumer is changing faster than marketers can keep up with, so that traditional marketing tools are not only weaker, but also irrelevant.
(2) The drive for accountability is reaching a crescendo on the demand side (from the CEO and CFO) before the CMO has the tools or analytics in place to be able to respond.
(3) Marketing departments have not grasped the technology nettle and it is becoming imperative that they do so.
This column is the first of a three-part series that will address each of these issues. Then, Reveries Magazine will field a survey to ascertain your thoughts. First, we will address the changing consumer and the end of the useful life of traditional marketing tools.
The Consumer Is Outpacing the Brandowner. Haven't we been hearing about the changing consumer for a long time? And haven't we been continuing to keep doing what we've always done, with a little tweak here and there? And isn't that okay? Well, yes, yes and no.
Just last week, we witnessed another major landslide undermine the already crumbling edifice of traditional marketing tools. Nielsen reported that 18-34 year-old males are watching 8-12 percent less prime time TV than last year.
The networks, of course, are amazed and say it's bad research. The more amazing phenomenon is that network TV has remained a staple of marketing plans for so long when it is so clear that consumers do not consume media the way they used to, rendering networks a cozy, advertiser-friendly irrelevance and value-destroying money sink.
Network TV is a cozy, advertiser-friendly irrelevance and value-destroying money sink.
|
|
Pete Sealey, former CMO of The Coca-Cola Company, was downright emotional in his assessment of the stupidity of continuing to support network TV (or any non-addressable media, in his opinion). "We've got to stop, folks!" he cried plaintively as he described the runaway inflation of network media pricing combined with stomach-churning declines in reach and effectiveness.
It's Broken -- So Fix It. Coupons aren't redeemed any more, trade spending costs brands more and more and gets them less and less, thousands of new line extensions and meaningless shelf cluttering sku's are launched every year only to instantly fade and die a costly death.
Why do we marketers do this? The definition of insanity, one pundit has said, is to continue doing the same thing and expect different results. Are we insane? In a more elevated tone, the celebrated historian Barbara Tuchman noted (in The March of Folly) that throughout history, regimes had continued to perpetuate what were clearly destructive -- and, in the long term, fatal – strategies: the Trojans taking in the Wooden Horse, the renaissance Popes provoking the Protestant Secession, the British losing America.
All these long-term declines ended in explosively destructive conclusions, despite the fact that the signals of failure were visible for years before the ultimate denouement. Are we marketers condemned to repeat history?
Developing a New Marketing Business Model. Jim Stengel, CMO of P&G, believes not. His ANA presentation was particularly imaginative. Every so often during his speech, the spotlight would switch from him to "the consumer" -- an actress sharing the stage in the role of the contemporary consumer, a Hispanic-American mother/office worker/homemaker named Maria.
Maria described the chaos of preparing two kids and a dog for their days via waking, dressing, breakfast, school preparation, a couple of spills, some hard-to-answer questions and a lot of challenging, high-speed, time-critical logistics. Any time for morning TV viewing here? No way. Any time to scan the newspaper inserts for coupons? A joke. (The newspaper is only useful for mopping up spilt orange juice.) However, there might be an internet connection in the kitchen to answer kids' last minute questions.
And there's certainly a phone, so that Maria can call her friend to see if she has any tips about removing dog hair and static cling from her skirt. And the radio is far more relevant than the TV because it's playing in the car while Maria drops off the kids for school and picks up her co-workers for the commute to the office.
The interface with the consumer at the point-of -sale must become a major focus of marketing science -- research, understanding, brand delivery and ROI.
|
|
Maria does find time to stop at Walgreen's in the lunch hour and she can pick up not only pharmacy items but household products and cosmetics, which she's delighted to find in this one-stop shopping trip and pleased that she doesn't have to go to a department store. She's even more delighted that the in-store presentation of the cosmetics is rich in image and information and invites trial.
Mr. Stengel's point is that every weapon in the marketing armory has to be re-evaluated. The entire marketing business model of connecting with the consumer, converting her to purchase and getting her commitment to our brands has to be changed. He noted that the in-store "moment of truth" has been elevated to a commanding place in the hierarchy of marketing.
Delivering brand values in-store, and ensuring that the consumer's in-store brand experience is consistent with all other aspects of the brand's touch, has become a major area of focus. One of the changes at P&G that he cited was a new Center of Excellence for shopper research -- to understand how consumers shop and experience the brand in-store, and not just how they consume. P&G found that they were dangerously underserved in this area of understanding -- and they've invested $20 million in the first year of the COE to catch up.
These are all packaged goods examples. But John Costello of Home Depot, Jim Garrity of Wachovia, and even Bob Lutz of General Motors spoke about the same or similar issues. Brands must change their mode of marketing -- and change radically -- or die, because they are not keeping up with the rate of change of the consumer.
New Solutions. None of these notable speakers at the ANA conference had all the answers, but here are some of the headlines.
|
|
- Conventional TV advertising is in terminal decline. It must become more targeted, more addressable, more interactive or more relevant to the brand and the consumer. One of the examples provided was Home Depot's embedded messaging in "Trading Spaces," a TV show about home makeovers that features Home Depot and its products and services.
|
|
|
- Targeting and segmentation must become much more refined and much more actionable. Mothers aged 25-34 just doesn't cut it as a target any more. Wasted reach is unaffordable. Kevin Clancy of Copernicus suggested that marketers should run 250,000 targeting scenarios before selecting those few that will truly deliver marketing ROI.
|
|
|
- The interface with the consumer at the point-of-sale must become a major focus of marketing science -- research, understanding, brand delivery and ROI. For B2C, this involves both in-store and online. For B2B, it might encompass delivery via channels and the salesforce. CRM has failed because it lacks any research, understanding, or content and eschews any consideration of the emotive connection between the customer and the brand. Yet research shows that affective commitment (an emotional measure of consumer attitude) is more indicative of future penetration and loyalty for B2B brands than any other measure.
|
|
|
- The integrated marketing strategy and integrated marketing plan must become a reality and not a pipe dream. That means that the brandowner must create the integration capability, because the advertising agencies and marketing services industry can't separate their narrow interests sufficiently to provide honest integration services to the brandowner.
|
Integrated marketing plans are created by formulating an overall brand imperative (what we must achieve), dividing it into initiatives (actions we take in the short term to progress towards the imperative), and then each initiative should be given the integrated marketing plan that's just right to achieve its goals.
With proper measurement and metrics, the integrated plan for the initiatives can be refined over time, so that resource allocation among tactical components becomes better and better. Then, the integrated marketing plan ROI is measured by its ability to support successful initiatives and achieve brand imperatives.
Big changes. A long way to go on the new path. But the exciting part of the ANA conference was that marketers have recognized that the old way is dead and that they must tackle the new way with open minds, new research, new tools and new measures. Bring on the new era!
Next: marketing accountability.
Hunter Hastings is the managing partner of EMM Group, an enterprise marketing management company that transforms clients for growth through the application of best practice-based marketing processes and marketing technology. He can be reached at hunterhastings@emmgroup.net
|
