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Thanks to new digital tools, marketing is no longer voodoo
May 18th 2013 |From the print edition
WHEN a power cut interrupted this year s Super Bowl, advertisers lit up.
Sending some LEDs to the @MBUSA Superdome right now, tweeted Audi, swiftly
plugging its own LED-accented car while taking a dig at its rival Mercedes,
sponsor of the New Orleans Superdome. Tide, a detergent, came up with: We can
t get your #blackout, but we can get your stains out. But by general consent
Oreo won the tweet-off with Power out? No problem. You can still dunk in the
dark. The biscuit baker s reward: 16,000 retweets and 20,000 Facebook likes.
Super Bowl TV commercials are the Broadway spectaculars of the marketing world,
broadcast to millions. The blackout banter is more like improv, created on the
fly for a select audience. Marketers these days must master both. It is not
easy. Lightning reflexes have never been part of a marketer s toolkit. Chief
marketing officers (CMOs) used to deliver big iconic brand ideas on a seasonal
basis, says Luke Taylor of DigitasLBi, a digital advertising agency. Some are
outside of their comfort zones .
Nearly 40% of CMOs do not think they have the right people and resources to
meet their goals, says an Accenture report entitled Turbulence for the CMO .
Martin Sorrell, the boss of WPP, the world s biggest marketing and advertising
group, says that since the 2008 financial crisis marketers have been elbowed
aside by finance and procurement chiefs. Dominique Turpin, the head of IMD, a
Swiss business school, writes that the CMO is dead .
Yet some have never felt perkier. With new digital tools marketers can reach
the likeliest customers when they are most in the mood to buy. Last summer Wall
s ice cream and O2, a mobile-phone network, teamed up to send advertisements
to Londoners smartphones when temperatures climbed. When the weather cooled
Kleenex, a brand of tissues, used Google search terms and health-service data
to target ad spending to areas likely to suffer the most sneezes. Andy Fennell,
the marketing boss of Diageo, a drinks firm, thinks this is a golden era for
brand builders .
From campaign to conversation
On Super Bowl Sunday, Nestl s digital acceleration team (DAT) gathered at
the food giant s headquarters on Lake Geneva to see how other brands TV spots
echoed in social media. They watched as the blackout completely changed the
equation , says the team leader, Pete Blackshaw.
The setting was a situation-room-like studio, where the focus is normally on
how Nestl s own products are faring among electronic opinion-formers. A
glowing map shows where social-media buzz is liveliest. A screen records that
Kit Kat bars were the subject of 164,462 recent posts on Twitter, Facebook and
the like. Of these, 73% were positive. (Though it is hard to imagine why anyone
would complain about chocolate. What s not to like?)
Kit Kat captured 34% of the chocolatey chit-chat, reveals an illuminated pie
chart, while Snickers did better, with 39%. If sentiment droops, community
managers , many of them DAT alumni, can swoop in to soothe a malcontent or
suggest a fix. Such give and take has radically changed the relationship
between our brands and the consumer , says Patrice Bula, Nestl s marketing
chief. Today we have really entered the age of conversation.
This helps explain why marketers are feeling both potent and panicky. Instead
of just lobbing messages out into the void, they must now act as customers
ambassadors , says David Edelman of McKinsey, a consultancy. And that is
tricky.
Most middle-class consumers will be Asian within a couple of decades. Pop
culture can pop up as easily in Gangnam as in Harlem. Technology keeps giving
marketers new ways to reach consumers and learn about them. The ensuing flood
of data may drown creativity, some fear. Under constant pressure to prove that
what they do is effective, the next generation of marketers may not be able to
be as intuitive and creatively inspiring as their predecessors, worries Grant
Duncan of Spencer Stuart, a recruitment firm.
The biggest shock, say marketers, is the schooling in humility that comes with
round-the-clock conversation. Consumers are in charge. They can comparison-shop
from their couches or badmouth brands via Facebook. They will not tolerate
shoddy quality or sloppy ethics. In 2010 Nestl fought campaigners who said the
palm oil used in Kit Kat caused the destruction of Indonesia s rainforest. Now
it is at pains to be orang-utan-friendly. British snackers can scan a QR code
on some Kit Kat packets to assure themselves that the cocoa is harmlessly
sourced.
But deference is double-edged. Brands want deeper and more profitable
relationships with consumers in exchange for the trust they hope to inspire.
Marketers are stretching their notions of what brands stand for and smudging
the distinction between advertising and entertainment. The lines between
marketing and other disciplines within a firm are fading. Brands want to be
antidotes to cynicism. But this will not divert marketers from their main task,
pungently summed up by an ad exec: to figure out and fuel consumer desires
like they ve never been fuelled before.
Happy-clappy about nappies
Did you think Special K was a breakfast cereal? It is so much more. MySpecialK,
a website, will advise you on diet, exercise and overall well-being. Do you pay
attention to Nike only when your running shoes wear out? Then you don t wear a
Fuelband, which will record your workouts and upload the data to the internet
every time you charge it. The point of Pampers is not to sell the most nappies
but to help mothers raise happy, healthy children, writes Jim Stengel, a former
CMO of Pampers owner, Procter & Gamble, in a recent book. From that flow
endless possibilities for growth and profit .
If brands are to rise in the world, so must advertising. A medium that
traditionally earned its keep through interruption now aspires to be sought out
and shared. There used to be ads and then content, says Mr Fennell. Now
there is just good content and bad. The advert could come in the form of a
mobile-phone game like Captain s Conquest, a hunt for high-seas booty that
promotes Diageo s Captain Morgan rum. Or it could be a televised chronicle of
the travels of Alexander Walker II of the Johnnie Walker whisky dynasty, which
drew an audience of 120m.
If only marketers could follow their customers as easily. They used to flow
through funnels : attraction (where consumer-goods marketers typically
concentrated their efforts) was the widest bit, followed by conversion (the
actual sale) and retention. Technology complicates this. A marketing manual put
out by Google likens today s customer journey to a flight plan , a zig-zagging
odyssey of apps, shops, social-media sites and online searches conducted on
both fixed and mobile devices and unique to each shopper.
To chase consumers around, CMOs are pinching marketing techniques from other
industries. Customer-relationship management (CRM) is used mainly by companies
with enduring ties to consumers, such as banks and telephone companies. Now
you see CRM methodology in places where it had not been applied before, says
Marco Rimini of Mindshare, a part of the WPP group. Although makers of packaged
goods such as nappies and toothpaste will still deal with consumers mainly
through retailers, they can now establish direct relationships. The more
marketers learn, the more they will tailor their come-ons to what they think
shoppers want.
It is getting harder to tell where puffery ends and providing a service begins.
Paul Kemp-Robertson of Contagious, a marketing magazine and consultancy, points
to the Fly Delta app, which tracks passengers baggage and lets them peer
through a virtual glass bottom to the ground below their flight. Australia s
Commonwealth Bank offers a house-hunting app that identifies the house, shows
its price and helps the prospective buyer find a mortgage. Adaptive marketing
, which varies messages as audiences and circumstances shift, should be as
fast as journalism, says Nick Emery of Mindshare, which devised the Kleenex
campaign. Or faster. Nike found 21,000 ways to tell people to find [their]
greatness .
The best trick for CMOs who want to impress the boss would be to measure just
what marketing is doing for a company s bottom line. Los Angeles-based
MarketShare (no relation to Mindshare) is one company that claims to be
cracking this hoary problem. With more data and new ways of analysing it, a CMO
can now predict what mix of media will achieve a company s sales and margin
targets, says Heath Podvesker of MarketShare.
Actually, marketers are not as clueless about that as they are said to be. The
smartest were using econometrics to measure marketing s payoff in the 1980s.
Digital advertising made that easier in some ways (advertisers could pay per
click) but added bewildering complexity. Now marketers are beginning to get to
grips with it by measuring how various media affect each other. MarketShare
touts the case of Electronic Arts, which was spending too much on television
and cinema advertising and not enough on search advertising and YouTube videos
to promote its Battlefield video game. After cutting television s share from
80% to half and boosting spending on video and paid search, sales of the new
version jumped by 23%.
This is good news for CMOs. MarketShare reckons that companies spend too little
on marketing overall and that the right answer is not always to put more money
into digital. Sometimes the algorithms counsel investment in print and
television, which is heartening to marketers wedded to the storytelling side of
their craft. No longer need CMOs creep diffidently into the chief financial
officer s lair.
But to stride in jauntily they will have to change the way they work. Gartner,
a consultancy, has predicted that by 2017 they will spend more on technology
than their companies chief information officers. Already 70% of big American
firms employ a chief marketing technologist , says Gartner. With the shift in
emphasis from set-piece campaigns to rapid responses, CMOs need more people
working directly for them. This is putting into reverse a 20-year trend of
favouring working spend (what consumers see) over non-working spend
(overheads), says Dominic Field of the Boston Consulting Group.
Some companies are pulling marketers off the sidelines and onto the pitch. Land
Rover, which like many engineering firms had a tradition of connecting with
customers only sporadically, signalled a change in approach not long ago by
hiring a new marketing chief, Patrick Jubb, from Vodafone. His brief is to
cultivate relationships with owners and potential owners of luxury SUVs every
bit as intimate as those between a mobile-phone network and its subscribers.
Marketing now works much more closely with the design and engineering teams in
sharing a new product with the world, says Mr Jubb. After dropping to less
than two years in the mid-2000s, the average tenure of a CMO at a big-spending
American firm has climbed back to 45 months, says Spencer Stuart. That suggests
a recovery in jauntiness.
Still, a gap yawns between what CMOs could do and what they actually do. The
left-brained bent that the job now demands is not part of where their
experience has been , says McKinsey s Mr Edelman. But CMOs are learning.
Mindshare installed an adaptive lab in its London headquarters to educate
them. DigitasLBi teaches its clients that not every utterance about a brand
needs to be vetted by lawyers. Next time the floodlights fail, more marketers
will know what to do.
From the print edition: Business