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Trading T&Cs

This isn’t another article about responding to Covid. In fact, let that be the last time we mention the “c-word”. We all know it’s a time of turmoil for the world, society, business and marketing.  Except that for marketing, 2020 seems like just another year in a long line of tumultuous years. As marketeers we’ve all been grappling with the “new normal” since long before society as we know it was turned upside down.  

So, what is the problem? Marketing departments and agencies are generally staffed with intelligent people, working harder than ever, under ever-increasing pressure. Why are marketing departments not being lauded as critical value drivers?  In fact, evidence suggests we’re getting worse at our jobs not better - imagine the outcry if the same was true of doctors or accountants. 

It is of course easy to point fingers. Our obsession with all that is “shiny & new” has led us to disappear down many a rabbit hole over the past decade (remember Facebook Fans anyone?). However, these last ten years have also witnessed the slow but inexorable rise of “evidence-based marketing”. Thanks to a growing body of work , we have a better understanding of what is likely to work and what isn’t. Like all aspects of commercial enterprise, marketing is something of a gamble, but at least we can now shorten the odds of success. And, above all, in a world of growing uncertainty, we can double-down on the certainties.

It is the ultimate irony: we know how to be more effective but are becoming less so.  We know how to drive value for our business and yet are the first to suffer in times of downturn. Why is this so? Reading, absorbing & training on the laws and science of marketing is the natural first step. But our experience shows that this is rarely sufficient.  Organisation and structure are critical.  We are struggling to translate the theory of effective marketing into practical means of operation. It’s as if Henry Ford, having invented the concept of the assembly line, organised his whole workforce to work on one section at a time.

So, what to do? We have identified four key areas marketing needs to focus on in order to convert our new-found knowledge into effective behaviours:

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1. The General Marketing Officer

Our industry does like a death.  The death of mass-media, the death of the high-street, the death of TV.  Over the past decade McDonalds, Unilever, J&J and Uber have all heralded the “Death of the CMO”.  It certainly makes a nice soundbite.  In truth the role is either split or takes on a new nomenclature (invariably involving “digital” in the title), before finally re-emerging (a la Coca-Cola at the end of 2019).  If there is one sure-fire way to diminish the role of a department within an organisation, it is to remove the leadership and vision. Yes, it is true that Marketing has become more multi-dimensional (is there a part of business that hasn’t?), but that requires more leadership not less. It requires greater vision and clarity.  Above all it requires someone who can meld together the variety of talents now required within marketing team into a single entity – a brilliant generalist. Perhaps the evidence-based principle that has become most widely accepted is that laid out in Binet & Field’s The Long & The Short of It, arguing for a balance of 60:40 between long-term brand building and short-term activation activity.  Both are critical to success, yet both require very different approaches.  The best CMOs of the future will be those that align these two sides of marketing in a single direction.

2. All-Rounders

If the vision is set by a broadly experienced CMO, what does this mean for the marketing talent that supports this leader?  In recent years the trend has been towards ever-increasing specialism with teams – specialists in “digital”, “e-commerce”, “customer experience” even “social-media”.  Young and mid-level marketing talent is being pushed to become ever more narrowly focussed in their capabilities.  But this is an error. 

We are in danger of creating a generation of marketeers who know how to create the perfect Twitter post, but can’t explain why penetration rather than loyalty is the key driver of growth. This is not to eschew the need for specialisation, but marketing is already a specialised function.   We all have our own particular areas of interest, but an SEO specialist who has no understanding of customer service is like a goalkeeper with no interest in his team scoring goals.

3. Civil Partnerships

The recent history of marketing can often be seen as a battle between two sides.  Above-the-line versus below-the-line.  Traditional versus digital.  Brand versus performance.  To return to our sporting analogy, it’s as if a team’s defence were pitted against the attack (and visa-versa). All very uncivil. Returning to the evidence once again, we know that marketing is not “either/or” but “and/and” . The barriers within marketing departments need to be removed.  Reporting structures need to converge. The mystery that surrounds different disciplines must disappear. Tools and individuals need to be employed to drive consistency across the marketing mix.  A shared language needs to be adopted- both within marketing departments and with partners.  Win:Win needs to be at the core of internal and external relationships.  We all know how easy it is to lose sight of the bigger picture, when engrossed in a tightly-defined task – so it’s critical that prompts and nudges are built into marketing processes to ensure people are giving themselves (and their teams) the best possible chance of success to deliver against the broader commercial objectives. Above all there must be a shared respect amongst teams for how their success is dependent on others.

4. Goldilocks Measurement 

“Measure what you treasure”. “Data is king”. We’re all familiar with these popular, if over-used, expressions.  Yet we are all likely to have witnessed the use and abuse of KPIs and measurement.  As Goodhart’s law states “when a measure becomes a target, it ceases to become a good measure”.  Or to put it another way “anything that can be measured and rewarded will be gamed”.   And whilst organisations fervently set up their data centres and employ hordes of data scientists, the evidence shows that marketing is conversely suffering from the over-emphasis on the easy to measure short-term metrics .  This measurement obsession ignores the fundamental fact that the human brain can only take on so much information.  So, whilst we drown in a sea of information, we are simultaneously left in a wilderness of knowledge and insight.  

We strongly advocate taking the “goldilocks” approach to KPIs – not too many, not too few, just enough to have a balanced view of marketing performance.  Marketing science can once again guide us as to what those key primary metrics should be.  A set of primary KPIs along the ‘customer journey’ (ignore those who say customer journeys are too complex to translate into a funnel) is a great starting point – clearly showing how the long-term KPIs (e.g. salience) have a direct impact on short-term KPIs (e.g. conversion) have a direct impact on business results.  And be particularly wary of any holy-grail single KPI, they invariably lead to abuse.  

But perhaps most critical of all, everyone in the organisation needs to have sight of those KPIs.  Pin them to everyone’s desk, put them up in the cafeteria or on the intranet.  Foster a team approach through sharing KPIs.

Conclusion

Marketing and recession are not comfortable bedfellows. As we entered this turbulent period in a somewhat turbulent state, it might appear there is little to cheer- and yet there is much to be excited about.  We have more knowledge now about what works and what doesn’t.  We are in a stronger position than ever before to sort fads from fact. So as the inevitable budgetary pressures loom we can focus our efforts on the areas that matter and pull back from those that don’t.  

Much of this new knowledge is filtering through to training courses and case-studies. This is good, but insufficient.  Only by turning this new knowledge into new behaviours, ingrained into the structure and processes of marketing departments, will we emerge from this period with a secure role for marketing in the twenty-first century.
 

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This paper is a collaboration between Ethos and the Business Model Co. We work together to set marketing departments up for success. If you’d like to learn more    contact  dan@ethoslondon.com.   

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