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Disconnected Marketing in a Connected World

Written by: Bryan Feller

Article Overview: Many executives have an uneasiness about marketing they find difficult to articulate. In many companies, marketing is a group of "creative" people who spend lots of money on projects that have no measurable return on investment. They are a necessary evil rather than a source of competitive strength. If you share this sense of disdain, this article may help you articulate what you are feeling and provide some real answers to give you some direction in dealing with it.

Disconnected Marketing in a Connected World

"I believe today’s marketing is broken. We are applying antiquated thinking and work systems to a new world of possibilities."

— John Stengel, CMO of Proctor & Gamble

Many executives have an uneasiness about marketing they find difficult to articulate. In many companies, marketing is a group of "creative" people who spend lots of money on projects that have no measurable return on investment. They are a necessary evil rather than a source of competitive strength. If you share this sense of disdain, this article may help you articulate what you are feeling and provide some real answers to give you some direction in dealing with it.

The Disconnect between Marketing and the Digital Age

The roots of contemporary marketing strategy can be found in the strategies which drive mass production. Mass production is all about leveraging production assets to produce as many widgets as possible. Mass advertising, a relic of the 1950s, is an identical concept as applied to marketing rather than manufacturing. It goes something like this: Produce a single message and blast it to as many people as possible through TV, print, radio, and any other media you can afford. With enough message frequency, people will develop "awareness" and eventually buy your product. If your ad is really crazy you might even be able to create "buzz" — a mystical cosmic event where consumers scramble to buy your product for reasons no one can quite explain. Ironically, mass customization transformed manufacturing decades ago, yet today’s marketers are still stuck in the era of mass production.

There are several problems with the concept of mass advertising:

- First, this strategy requires large consumer distribution channels, to which most companies
have no access.
- Second, without a compelling value proposition, all the "awareness" in the world will not
cause people to buy.
- Third, there are no more large homogeneous markets, like 18 to 65 year olds. There are only
niche markets.

Media is becoming increasingly fragmented. Twenty years ago, could you have imagined there would be a Food Channel, Cartoon Network, or Gold Channel? People want more content centered around their interests and are determined to screen out as much mass media as possible. Thank God for TIVO. This trend is killing broadcast television, but is fueling opportunities for niche players to create highly customized messaging to niche groups of consumers and businesses.

The bottom line: In the digital age, mass media will never go away, but it will take a back seat to niche media that is highly relevant to smaller groups of buyers. Search is also transforming the way advertisers reach people. Google has made it possible for people to find what they want and avoid the push-advertising of brand marketers. Search marketing is not just another channel; it is a fundamentally different way of reaching people.

Disconnect between Marketing and Buyers

A 2005 Association of National Advertisers (ANA) survey found that 73% of senior marketers didn’t see the sales impact of their marketing campaigns. Not surprisingly, only 20% said they were able to measure ROI.

The soul of marketing is the client value proposition which many marketers have lost. The fundamental precept on which all marketing is based is that your firm has something unique and valuable to sell. It is the job of marketing to define and communicate that proposition in a way that creates profitable revenue. This may be a slight oversimplification, but true nonetheless.

That said; let’s look at Leo Burnett, a giant of the ad business. Have you seen their website? The title text for their site reads, "Big Ideas Come Out of Big Pencils". What does that even mean? A deeper dive into their site reveals how prestigious a firm they are, but it’s devoid of any reference to the return on marketing investment they have achieved for their clients. They have won numerous Cleo awards, but have they generated incremental revenue for their clients? If they have, it’s not something they seem to want to talk about.

Take another household name: Hilton Hotels. They recently ran an ad campaign called "Be Hospitable". In their commercial they showed people being hospitable to one another: a person picking up the newspaper for his neighbor, someone helping a stranded motorist, or a man opening the door for a elderly woman. You get the picture. It was a very feel-good kind of commercial that had no value proposition anyone could connect with. Hilton actually tied the campaign to a website encouraging people to send in good Samaritan stories. The campaign won numerous awards. According to Philip Kotler, "Most television advertising is a waste of money and marketing has become little more than promotion…many marketing professionals are clueless about how effective their strategies are…" The "Be Hospitable" campaign was no exception.

This campaign is a caricature of the disconnect between marketers and their buyers. People stay at Hilton properties because they consistently provide a high quality experience for a good price. Additionally, they have a solid points program that keeps their business travelers motivated to choose them over the competition. How does the "Be Hospitable" campaign support that? It doesn’t.

Hilton actually has a robust strategy to ensure the guest experience is always high quality. In fact, they have implemented the Balanced Scorecard process from the C Suite all the way down to the housekeeping staff. They rigorously measure and maintain eight key metrics that guarantee their guests have a high quality experience. Why don’t they mention that in their marketing? Everyone claims to have good service, but Hilton has reconfigured their entire company to support this value proposition. It’s a tragedy they don’t advertise it.

The bottom line is this: Make sure you have a compelling value proposition and that your marketing communicates it well. Focus on sales, not awareness. Sell something using your compelling value proposition and people will become "aware" of your product. Don’t try to make them aware of the product with some pithy tag line or feel good statement and think they will buy. They won’t.

Disconnect between Marketing & Science

You’ve probably heard the story about the marketing executive who knows that only half of his advertising is working. The problem is that he can’t figure out which half. Science and marketing go together hand in hand. Measurement of marketing is hard, but without it you are just gambling with shareholder's resources.

Many marketers come up with grand ideas that sound great to company executives, but have no basis in financial reality. Take the cutesy, funny ads that run during the Super Bowl for example.

While almost everyone remembers a commercial with the cowboys herding cats across the American plains, no one remembers what they were selling, or even the name of the company. EDS, a dot com era consulting firm, paid $2 million just for airtime to run the ad. In the years following the commercial their dividends to shareholders remained unchanged and gradually turned to a slow decline. Obviously their dream of becoming a national household name overnight never materialized. It seemed like a great idea to their executives who planned it in the proverbial ivory tower, but it wasn’t based on anything that could be measured or predicted. EDS bet their future on a lottery ticket and threw away over $3 million in the process when you factor in video production costs.

Even in the case of broadcast or mass print advertising, the scientific method can still be employed. You can ask target customers how likely they are to purchase your product before seeing a test ad, and then ask them again after they’ve seen it. Measure the difference between their pre-and post-exposure reactions. It’s not that hard, but it flies in the face of ad agency bravado. Because of this, it remains the exception rather than the norm.

The Zyman Group conducted some fascinating research during the 2000 Super Bowl season during the period when EDS ran their commercial. They took the annual likability ratings published in an annual USA Today survey and did their own research on people who actually viewed the ads. They measured people’s likeliness to buy from each of the companies that advertised before and after they had seen the ads. What they found was disturbing: There was an inverse relationship between how much people liked the ads and their willingness to buy from the advertisers. In other words, people were entertained more by the cute, funny ads, but were influenced to buy more from the others.

The bottom line is that you must subject advertising, along with all other marketing activities, to the same financial discipline and analysis that you would apply to any other business investment. Marketers need to apply the scientific method to their craft. They need to develop assumptions, test those assumptions, and roll out initiatives that can be measured and improved. It is not easy to clearly articulate assumptions, but this skill is crucial. If you can't clearly define and debate your assumptions and predictions, you'll find it impossible to reconcile them. Big egos will carry the day and learning opportunities will be lost.

Disconnect Between Marketing & Sales

In most companies, marketing and sales are separate departments operating independently. This configuration is less than ideal, but companies do it because of the cultural divide between marketers and sales people. Marketers tend to have academic/ivory tower/creative personalities, while sales people tend to be relationship oriented and tactically focused. Marketing people talk about awards, reach, frequency, impressions, and clippings. Sales managers talk about wins, share, revenue, margin, and quotas. In most cases, the cultural divide between these people creates one of the greatest opportunity costs in the company.

Marketing has to develop the messaging for sales that fits the big picture strategy, but too often this occurs in a vacuum. They create messaging in their ivory tower and it’s completely irrelevant to the sales rep on the front lines. It’s quite common in many companies for the sales people to throw away the corporate collateral and make up their own half baked collateral that communicates the value proposition, although it may not be pretty.

The bottom line: Marketing people need to think more like sales people so that the tools, materials, and initiatives they spearhead are useful to people on the front lines. Marketing people need to ride along with your best sales people on sales calls. They need to interview sales people at all levels of performance so they can replicate best practices and provide tools to help weaker players sell better. They need to include sales people in their planning meetings and consider the sales team their internal clients. This may not stroke the egos of marketers, but it’s the best thing for them. Call it servant leadership. It works.

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Article Tags: 1950s, cmo, contemporary marketing, cosmic event, disdain, distribution channels, lots of money, marketers, marketing strategy, mass production, measurable return, message frequency, necessary evil, niche, proctor gamble, relic, return on investment, stengel, value proposition, widgets



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