Marketing as the Upside Hero, Not the Downside Villain

Marketing is one of the prime creators of value in any organisation. It initiates the dialogue with prospects and maintains the relationship with customers. Product launches gain traction and pricing gets optimised, all through the interactions of marketing campaigns with their audiences. Asset value is also increased through enhanced brand stature resulting from marketing inputs.

Yet marketing is also often viewed as a black hole from which only two things emerge - creative campaigns and supplier invoices. Despite the claimed success of many marketing campaigns, proofs of a positive return on investment are frequently lacking. Showing a direct cause-and-effect link between marketing activity and sales outcomes can be problematic, even in the apparently transparent realm of e-commerce.

As a result, the marketing department is operating at a knowledge deficit compared to other functions. One of the main explanations for this gap is in the complexity of the marketing mix - with the explosion of social and digital alongside physical and broadcast media, campaigns have become multi-channel almost by default. In addition, silos tend to arise around specialisms, sometimes multiplied by the number of product divisions within the organisation.

Consider this example: you are launching a new handheld device which comes with three different sizes of storage capacity, two types of connectivity and in two colour ways. That means what starts out as a single product is available in 12 variations. The price difference between the highest and lowest levels of functionality is £260. It looks complicated, yet that is how Apple have configured and marketed the iPad mini.

For many marketers, that is just the starting point. Campaigns may be developed for each product variation in it’s own right if they have specific target audiences. That targeting will also dictate the mix of channels. The result is often a highly complex matrix of marketing outputs which is rarely mapped into a single overview.

This complexity is not going away anytime soon. It is not just a reflection of specific marketing goals (such as covering key price points, matching competitor propositions, building penetration in certain customer segments), it is also how customers behave.

An indication of this can be found in research carried out by Retail Systems Research, which found 65 per cent of retailers reporting that customers who shop across multiple channels are both more profitable and have a greater lifetime value than single-channel shoppers.

Chart 1: Top Strategic Goals

[Download PDF to see Chart 1]

Mastering this complexity and closing the knowledge deficit can turn the marketer into a hero within the business, proving that the function is directly responsible for driving this value while reducing costs from duplicated or wasted efforts. The downside risk from not doing this is substantial (see Case Study, Page 6).

A survey carried out by Aprimo among 422 practitioners in March 2012 shows that marketers are more focused on improving their operations than they are on acquiring customers (see Chart 1).

With measurement rated the third most important strategic goal, there is every chance that what chief marketing officers intend to do is becoming more closely aligned with what chief financial officers want them to do.

Case Study: The £1.5 Million Price of Getting it Wrong

Investors need reassurance that their money is safe should the company they trust fail. This has been particularly important since the start of the economic crisis in 2008. In the UK, a scheme known as the Financial Services Compensation Scheme (FSCS) exists to protect deposits up to certain limits. As part of it’s plans to protect the UK economy, the Government adjusted the terms of the FSCS in 2008 leading to many investors checking with their provider whether this applied to products they had been sold or were considering.

Santander sold two structured investment products - Guaranteed Capital Plus and Guaranteed Growth Plan - with a total of £2.7 billion invested. By June 2009, Santander concluded that these products would only have limited cover under FSCS. However, it did not inform new customers of this fact until January 2010, by which time it had taken £1.2 billion in deposits.

During that time, Santander failed to update the product literature used in its marketing or the training materials which its sales people relied on. The Key Facts literature which all deposit takers use to explain product risks were not rewritten in the light of the FSCS limitation which had been identified.

As a result, the Financial Services Authority (FSA) fined Santander £1.5 million for allowing sales to continue despite being aware of the restricted protection on offer to customers. Santander has had to contact all of the customers sold the products between 1st October 2008 and 6th January 2010.

Tracey McDermott, acting director of enforcement and financial crime at the FSA, said: “When firms provide customers with literature about products, the information has to be correct and unambiguous. After all, it is there to help people make informed decisions about whether to invest. The extent of FSCS cover is important to customers, and firms must be clear about this in their Key Facts documents. Considering that sales of these products took place between 2008 and 2009, a time of financial uncertainty, Santander should have moved more quickly to confirm under which circumstances FSCS cover would be available.”

Comments posted on twitter at the time included “As a customer, this doesn’t surprise me at all” and “Is £1.5m a sufficiently large fine?”. Comments posted on FT.com included “This is an example of how spanish financial institutions recapitalize themselves. Lying to their customers."

Time to Give Marketing More Controls

Choice is one of the major tools used by marketing to develop customers. Through line extensions, product development, price points and features, it allows users of products and services to have multiple entry points and pathways within their lifetime with the brand.

This depth of choice is not just for customers - marketers have it, too. In deciding which channels to market are most appropriate for each proposition, marketing now has an unparalleled depth of options. Proliferation of media has created a much deeper toolset with which to build the right set of activities to meet objectives.

Consider these findings for the use of social media by Fortune Global 100 companies. While 74 per cent have a presence on Facebook, this is not limited to a single Page - the biggest brands have an average of 10.4 accounts each. A remarkable 82 per cent of companies have YouTube accounts, with an average of 8.1 channels each. That has risen from 2.1 in just two years. Emerging social networks are also attracting marketing investment, with nearly half (48 per cent) of Fortune Global 100 companies having Google+ accounts and 25 per cent already using Pinterest. (All figures: Global Social Media CheckUp by Burson-Marsteller)

Each of those social network presences has to be populated with content, monitored for comments and interaction, and tracked for impacts on brand metrics and sales. As social continues to expand, it is not doing so in isolation - core media retain a place in the marketing mix, while other digital options (email, mobile) compete for attention and investment in their own right.

This expansion is happening at a time when marketing departments are facing a reduction in headcount. Procter & Gamble, one of the TIME TO GIVE MARKETING MORE CONTROLS CREATIVE TIME WASTING? 1/10 Proportion of time spent managing files by creative professionals 83 Number of times in a week a creative looks for a media file 35% Proportion of searches for files by creatives that fail $8200 Average cost per creative person per year of file management All figures - GISTICS Page 9 benchmarks for marketing, is planning to save $10 billion in costs over the next five years through cuts including slashing $1 billion from its external marketing spending and removing 5,700 jobs from non-manufacturing areas such as marketing, for example. Human resources to plan, execute, manage and measure hundreds of campaigns in dozens of channels are limited and stretched.

Little wonder that those left in marketing are feeling the pressure. Typically, a senior marketer will spend 80 per cent of their time with non-marketers in the business. For marketers at a more tactical level, simple tasks, such as managing digital assets, have become time consuming because of the proliferation of sources and wide distribution of files (see page 8 - “Creative Time Wasting”).

Whether through career progression or cutbacks, the average job tenure for a CMO is just 23 months, according to Brand Strategy Insider. That is a relatively short time within which to understand a brand and make an impact. It can also put marketing at a disadvantage in terms of representation at a senior level - on average CFOs are in post between 4 to 5 years. Rapid turnover of marketing professionals within a business can undermine their credibility with their peer group.

Improving productivity through reducing time spent on administrative tasks while cutting costs by increasing value-adding activity and cutting duplication is a fast-track to better performance (and possible career advancement). Marketers are desperate to be able to provide the proofs of their impact which CFOs are demanding (see Chart 2) while also integrating new channels and taking advantage of what social has to offer.

These challenges map against the proposition of marketing resource management. MRM provides an automation suite which combines process management - to ensure the right creative assets have been used or that approvals have been granted - with metrics that show how budget has been deployed and what exposure has been created.

[Chart 2: Biggest Challenges in Marketing]

[Download PDF to see Chart 2]

Harness Marketing's Resources

Marketing is one of the largest items of expenditure in the organizational budget. It is often also one of the least accountable. With intense competition across all functions for resources, especially investment, it has become more important than ever for the chief marketing officer to be able to show a credible business case to the CFO. That includes having better oversight and control of the flow of that budget out of the marketing department once it has been approved.

Within the marketing process itself, there is a critical need to ensure correct protocols are being followed, that assets are exploited as efficiently as possible, and that management can get an insight at any moment into the state of play of everything marketing is doing. A process that can not be completed because the marketer responsible for it is out of the office is no longer an appropriate process. Instead, the goal has to be improved collaboration and tracking to allow every element of each campaign to be identified, progressed and tracked through a common portal.

This is the toolset which MRM provides. Introducing workflow to the marketing department immediately improves project management across the piece, with online reviews and approvals that allow working documents to be accessed and amended regardless of format and content type. It also provides complete budget accountability from purchase order to invoice, allowing senior managers to track spend against forecast and identify where burn rate is accelerating or lagging. When considering opportunities in rapidly emerging social media, for example, knowing what capacity marketing has available may be core to the decision about investing or not.

As a result, the CMO can gain a fresh advantage in competing for investment against other functions. This is especially important where the individual is used to being the advocate for change (see Chart 3) in a business culture that increasingly demands evidence-based decision making rather than ego-driven choices. Given the financial pressures facing marketing, building a case around known inputs and demonstrable outputs will be more persuasive than personal conviction alone.

Common workflow and procedures ensure that best practices are adopted and followed, driving better decisions in reduced cycle times. Collaboration is also enhanced by using marketing resource management software solutions, through better linking of disparate teams involved in the planning, development, execution and measurement of marketing campaigns, both inside the organisation and in external agencies. Compliance is also improved by removing bottlenecks and providing a visible audit trail to a common standard.

Marketing remains a creative profession. But it is one that needs to harness science in order to gain the space and freedom in which to practice it’s art. Automation of time-consuming activities releases more time for value-adding ones. And what marketer does not want to be valued for their thinking, rather than their counting?

Feeling the Benefit and Seeing the Return

Marketing is used to measuring the inputs it creates - the key metrics deployed by the function are around impacts, opportunities to see, ratings, etc. What it has not historically taken account of are it’s own inputs - the time spent by individuals on specific tasks by type, expenditure on creation of collateral defined by product, channel, territory, for example. Bringing standard accounting practices used in other professional services to bear on marketing not only aligns the function with its peer groups in an organisation, it releases value that has been locked up in the performance of repetitive, non-value adding task.

This is the biggest reward which marketing can gain through automation and one that many other departments are not in the same position to benefit from. The argument is simple: marketers are knowledge workers; knowledge work generates 60 per cent of all value created in the world; yet knowledge workers typically spend two-thirds of their time on managing workflows. Liberating that time could unlock new value - a major benefit in a time of limited economic growth. Key areas for achieving a positive payback from using MRM include:

Return on Processing Time Reduction

Managing financial activity within marketing without automation is very time-consuming. By introducing productivity tools, significant time savings can be made - Cummins released 12,000 man hours annually which had previous been spent on financial management, spreadsheet updating and sharing.

Return On Time-To-Market Reduction

Marketing needs to be able to react to changing market conditions and competitor actions as rapidly as possible. Digital channels enable this, provided the process can be streamlined. Brands that have introduced Aprimo’s MRM solution have seen their time-to-market fall by 30 to 40 per cent.

Return on Direct Cost Reduction

Marketing generates significant volumes of creative assets, many of which end up being used just once. Ensuring that a library of collateral is created and used, rather than work being recommissioned brings down external marketing costs significantly.

Cummins made a 75 per cent saving by reducing external asset management fees and through eliminating redundant digital asset repositories.

Return on Repeat-Cost Production

Marketing activities which are not tracked and controlled centrally risk being duplicated, with errors repeated and workarounds required as a result. Using MRM can reduce this level of defects and reworking by up to 70 per cent, bringing with it a major reduction in costs.

Return On Risk Reduction

Aligning marketing collateral with corporate policies and risk factors is becoming critical. The FSA recently emphasised that banks and insurers should have effective controls in place around incorrect, false or even fraudulent data when relying on manual processes or spreadsheets. Avoiding regulatory fines is a critical metric for the board - Aviva has achieved 100 per cent compliance within its financial promotions since implementing Aprimo’s MRM solution.

Aprimo Marketing Studio: Integrated Marketing Management

Aprimo is a leading provider of software and services that advance the productivity and performance of marketing organizations. We enable marketers to engage, lead and perform by empowering conversations on new engagement channels, enhancing internal collaboration, improving marketing performance and improving accountability.

Deploying the Aprimo MRM solution allows marketing to automate all of the processes used within online and offline activities. It ensures that every campaign is properly accounted for, approved and populated with appropriate assets. Through the use of Aprimo’s Integrated Marketing Management (IMM) software for B2B and B2C, marketers can integrate their organisations, get control of budget and spend, eliminate internal silos with streamlined workflows and execute innovative multi-channel campaigns to drive measurable return on investment.

Our modular software allows processes to evolve in phases that best match each company’s culture. Results can be quickly measured with real-time feedback opening the door to continuous improvement of campaigns and messaging. True accountability is created which is capable of convincing the CFO and the CEO.

With Marketing Spend Management, project costs are accurately captured and compared to committed funds for budget control, then considered in the calculations for more accurate depiction of campaign results and ROI measurement.

With Workflow and Project Management, creative development is automated along with the review process for timely development of assets to support a campaign.

With Segmentation and Campaign Management, target audiences receive relevant and timely messages as a result of accurate planning and analytical processes.

With Marketing Performance Management, analytics of marketing efforts are more accurate and carried through to the next planning cycle for subsequent campaign development and execution.

Aprimo is a Teradata company. To find out more visit www.aprimo.com.

About the Author

David Reed, consultant editor for marketingfinder.co.uk, is also the editor of DataIQ, the journal of data management, editor of the IDM Journal of Direct, Data and Digital Marketing Practice and course editor for the IDM Award in Data Management. He also founded The Data Governance Forum to represent, inform and connect end-user organisations which manage personal information and are looking to maximise it’s value to their business. David has a 20-year track record in journalism covering data and direct marketing in the UK. In recognition of this, he was elected to the DMA (UK) Roll of Honour in 2004, the only journalist and non-practitioner to join the list.

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