Brand Architect

When Strategy is Left to Post-Production

The above cartoon from the always-brilliant Tom Fishburne is, unfortunately, too often, true. As Tom writes in the notes that accompany the cartoon that “a marketing campaign is only as strong as the strategy that drives it. Yet sometimes we treat marketing strategy as an afterthought” and “...advertising can’t fix a bad marketing strategy”. However, advertising and brand agencies may be trying to to correct that with the appointment of strategists that go beyond the traditional role played by the planner and look to advise the client on the marketing strategy itself.

The Agile Return of Relevance to Marketing Departments

The marketing director is an embattled species with report after report suggesting their waning influence within corporations and parts of their traditional portfolio being annexed by other departments. Perhaps all is not lost.

Agile | adaptive strategies, designed for the constantly evolving and complex socio-economic environments of today and tomorrow’s business worlds, are well suited to return relevance and influence to the marketing director and their department.

Key to agile | adaptive strategies is the behaviour of the consumer who, as shown in Accenture’s recent Global Consumer Research study, is these days far more able and willing to switch brands and increasingly ups their expectations of brand performance and delivery.

“Customers’ intentions are constantly changing, and the choices they make are increasingly dynamic, open and continuous, so providers must be able to offer a constantly evolving library of experiences,” Accenture writes.

The implications for the marketing department and their communication agencies are that they need to continually track and analyze the drivers of their target market in real time and adapt and respond in much shorter times periods than ever before.

This means marketing campaigns are refined and adapted on the fly, and marketing must tightly integrate with operational systems that must be able to accommodate surges in demands or quickly adapt to take advantages of changing consumer desires and demands.

In addition marketing programs now often need to run in parallel rather than sequentially and the increasingly segmented and fragmented nature of the socio-economic environment means that marketers may be running multiple, markedly different and rapidly developing consumer engagement simultaneously.

If the marketing department can successfully implement agile | adaptive strategies to guide their companies through turbulent times, they will increase their relevance and respect within organizations. But if they are slow to adapt, then others will seize the initiative and the decline of the marketing function will continue.

Where Ad Spend is Going

The above graphic, although not telling us anything new, is another confirmation of the shifting ad spending patterns. In an article on trends in marketing, Advertising Age wrote that: “Once again the ad business will be growing. But a new media and marketing order will be taking hold. In measured-media terms, in 2016, the furthest year forecast by eMarketer, TV will still own the biggest piece of the marketing pie (36%), but just barely. Online advertising, at 31%, is sure to be hot on its heels. Further behind but growing fast will be mobile, whose share will have jumped from about 1% today to 5% as marketers chase a wholly mobile consumer reveling in constantly improving gadgets and services.” You can read the rest of the article here.

PR Agency Adds Strategy to its Offering

I was interested to see that leading South African PR agency Atmosphere has created a position of head of strategy to, among other things, align communication strategy with the client’s business strategy. Another example of a traditional communications company taking cognizance of the need to offer business level strategy to their clients.

My experience is, however, that (and this observation is not related to the Atmosphere announcement as I have no knowledge of the person fulfilling the strategy position) most creative / communication agencies talk strategy but limit their strategic input to marketing when in fact clients need a more holistic and comprehensive brand consulting service spanning multiple management disciplines.

So the race continues to see whether traditional communication agencies are going to add comprehensive strategic services before management / professional service consultancies add comprehensive creative communication services.

Without Strategy, Marketing is Losing Ground

The fact that marketing is changing is obvious to even those with a passing interest in the field. Exactly what it is changing to is a question of much debate. Harvard Business Review through a recent guest blog post argued that traditional marketing is dead and offered social media and building community networks as the solution.

I feel the post, which has received wide attention, is flawed on a number of points. Firstly, traditional marketing is not dead by any definition, especially in economically developing nations. Secondly, an over reliance on social media as the solution is too limited and simplistic for the complexity of marketing in today’s day and age.

What I found missing from the post was the discussion that marketing has been surpassed by brand strategy and management: traditional marketing is about communication to identified markets but brand strategy is about ensuring the most relevant, effective and evolving engagement with the market. It is, essentially, the business of the organization delivered through constant innovation, agile organizations strategies, etc.

The HBR blog post briefly touched, but did not elaborate, on this need for marketing to become more strategic and answerable in the following paragraph.

“In a devastating 2011 study of 600 CEOs and decision makers by the London-based Fournaise Marketing Group, 73% of them said that CMOs lack business credibility and the ability to generate sufficient business growth, 72% are tired of being asked for money without explaining how it will generate increased business, and 77% have had it with all the talk about brand equity that can't be linked to actual firm equity or any other recognized financial metric.”

Simply stated, marketing needs to become more strategic and concerned with the top-line growth than marketing metrics that number of followers or likes but fail to translate into profitable engagements.

Marketing isn’t dead, but it the traditional definition of a communications-based function has been superseded by the need for strategic business management. Marketing, I believe, should be a subset of brand management and those marketing managers failing to evolve are the ones finding their role, contribution and appreciation dwindling.

The HBR post inadvertently offered support for this view by offering an example of how National Instruments helped mid-level IT managers get into the C-Suite by offering them research and financial proof to position themselves as strategic thinkers.

Whilst the post used the example to describe the creation of social capital and networks, it also underlined that fact that managers, across the organization, need to become more strategic to advance.

Marketing managers should take note.

Being Agile Enough to Make Volatility Your Friend

In an era of chronic uncertainity, organizations need to constantly adapt to changing market conditions. This require strategies that are agile enough to quickly realign and refocus the organization. In above podcast, Accenture consultant Walt Shill describes how agility can be a powerful competitive advantage and allow organization to transform volatility from a limitation into an opportunity.

Survival by the Most Adaptable

Also true for brands.

Entering the Ongoing Era of the Strategist

McKinsey management consultancy released a couple of papers in July which essentially said that in times of pervasive, ongoing uncertainty a company’s top management team needed to spend a lot more time, more often on strategy. Problem was that many of the top managers weren’t equipped to develop and implement strategies.

“Rare is the company, though, where all members of the top team have well-developed strategic muscles. Some executives reach the C-suite because of functional expertise, while others, including business unit heads and even some CEOs, are much stronger on execution than on strategic thinking,” McKinsey consultants Michael Birshan and Jayanti Kar wrote in the July 2012 edition of McKinsey Quarterly.

“In some companies, that very issue has given rise to the position of chief strategy officer— yet even a number of executives playing this role disclosed to us, in a series of interviews we conducted over the past year, that they didn’t feel adequately prepared for it.”

Birshan and Kar went on to suggest that a strategist needs three skills namely understanding what strategy really means in the their industry; becoming an expert at identifying company or industry-disrupting changes that are just over the horizon; and becoming an effective communicator.

In a separate paper in McKinsey Quarterly, fellow McKinsey consultants Chris Bradley, Lowell Bryan, and Sven Smit wrote that “that the only way to set strategy effectively during uncertain times was to bring together, much more frequently, the members of the top team, who were uniquely positioned to surface critical issues early, debate their implications, and make timely decisions.”

The authors suggested meeting two to four hours, weekly or every two weeks, throughout the year. Devoting regular attention to strategy in this way makes it possible to:

-- Involve the top team, and the board, in periodically revisiting corporate aspirations and making any big, directional changes in strategy required by changes in the global forces at work on a company.

-- Create a rigorous, ongoing management process for formulating the specific strategic initiatives needed to close gaps between the current trajectory of the company and its aspirations.

-- Convert these initiatives into an operating reality by formally integrating the strategic-management process with your financial-planning processes (a change that usually requires also moving to more continuous, rolling forecasting and budgeting approaches).

Facebook is More About Brand Awareness than Likes

Much has been written recently about the effectiveness of ads on Facebook and whether they are worth the advertising expenditure. Ad Age, in a joint survey with Citigroup, have joined the conversation saying that “marketers who buy ads on Facebook are more focused on building brand awareness than accumulating fans”.

“Asked to identify their primary goal in Facebook ads, 45.9% of respondents put building awareness and sentiment for their brands at the top. Driving traffic to brand websites was the second most-cited goal, with 17.6% of respondents saying it is their most important objective, followed by building fans or likes, staying in touch with customers, generating sales leads and social commerce.

“Brands spent a lot of time and energy in 2011 building up their fan base, and fan acquisition was a top goal for many brands,” Debra Aho Williamson, principal analyst at eMarketer, told Ad Age. “I think what you're seeing now is an evolution; now we have these fans and we have to figure out what to do with them."

Not a Fan of Groupon

I have never been a fan of Groupon and similar discounting services, believing that they succeed more in cultivating the deal hunter mentality rather than delivering the promised legions of loyal consumers for participating brands. Management cartoonist Tom Fishburne is also not a great fan and captures the danger beautifully in the above cartoon and his notes which accompanied the cartoon.

“The last time I tried to redeem a Groupon, I arrived at the sushi restaurant to find an “out of business” sign in the window.

“The restaurant had launched a daily deal promotion six months before. Half-price sushi at a good restaurant is a great deal for consumers (more interesting than the eyebrow waxing and air duct cleaning deals I usually see). Sure enough, the restaurant was suddenly and constantly full, and I saw Groupon printouts on most of the tables every time I went. From all the traffic, it looked like a very successful restaurant — until the moment they went out of business.

“The daily deal bandwagon of the last couple years has created a number of cautionary tales like our neighborhood sushi restaurant. I think the lessons apply to any premium brand that uses price promotions, a tactic that long predates Groupon of course.

“There’s a role for price promotions to bring in new consumers. But tread carefully. Deep discounting carries seen and unseen costs. Beyond the discount itself, it can bring in deal hunters who will never buy full price and it can train your customers to only buy you on deal. If you’re not careful, it can irreparably impact your profitability.”