Consumer and technology change is altering how marketing plans and acts. But understanding what it should do is no simple matter, discovers David Reed.
Take a simple paper band. Give it one twist, then join the two ends together. You are now holding an infinite loop. Surprising, isn’t it, how a single change can turn the straightforward into the complex?
That is also how many marketers feel when trying to understand what the right shape is for their departments, resources and skills set. A single change, such as the arrival of social networks, has made their task infinitely more complicated. Yet at the same time, shifts like this are enabling the type of marketing that has long been heralded as the way forward.
“Many of the issues that the marketing communications industry has always said have prevented it from becoming more efficient and effective are on the way to being solved as we learn more about consumers through more and better direct ways of talking with them,” writes Martin Hayward, former director of strategy and futures at dunnhumby UK, in a recently published white paper, “Marketing Communications towards 2020: Looking for meaning in a land of plenty.”
His paper explores the shifts and consequences of the rapid digitisation of media channels, bringing with it the ability to target ever more effectively and a deluge of data about those targets. Rising relevance in this model is leading to a decline in importance of execution (or creativity). Yet at the same time, branding (or fame) is becoming ever more powerful because of the ability to reach consumers through social media. If you played the La Senza cup-size choir last Christmas, for example, you understand the power of these networks.
All of which makes marketing planning rather like trying to find the start in that loop. “I imagine marketing will involve a bit of everything going forward,” says Hayward. He notes that the tremendous potential to deliver highly-targeted, personalised messages will need to be counterbalanced with softer approaches.
“In the context of a world where consumers are potentially going to be receiving extremely relevant messages very often, there will be quite a need to sit back and reflect as well,” he says. At the very point where data will allow marketers to be highly predictive about consumer behaviour, serendipity and the “happy accident” of coming across a new brand might become highly valued by consumers.
In practical terms, these means a tension between the Google view of the world and the one marketers are more familiar with. The search engine believes ever-growing volumes of personal information will allow it to increase relevance to the point where consumers do not really need to make decisions for themselves.
Google's chief economist Hal Varian has been quoted as saying, “the sexy job in the next ten years will be statisticians.” Hayward acknowledges the growing importance of that skill set in his review of the future of marketing. He also accepts that highly relevant communications need relatively little in the way of creative content.
On the other hand, he argues that, “mass media are not going to go away. We are social animals, not completely rational beings. Probably 90 per cent of the things we buy, we don’t need - just look in anyone’s wardrobe. That is the joy of life.”
Brands that are able to combine the rational and emotional dimensions of their appeal across different channels - some very targeted, others more broadcast - will thrive in this new world. To do so, however, they will have to learn how to cope with the breadth of communications options and a more transparent, but demanding consumer.
Marketing also needs to deal with a far more rapid pace of engagement. Decision-making cycles that used to assume a three-month campaign period from first message to sales outcome can now be taking place within days or even hours.
“Most marketing structures last two to three years,” says Pete Markey, marketing director at More Th>n. “In the current environment, you need to look at it every 12 months.” The skills that need to be applied have broadened out significantly, not just to manage multi-channel marketing and data, but the full panoply of digital options as well.
“What marketing is and what the marketing department needs is much broader than it has ever been. That throws into question your skills because it is so much more sophisticated, clever and dynamic - and so is the consumer,” says Markey.
To cope with this rate of change, his company has set up a marketing academy to help its practitioners understand the new world. Courses focus on multi-channel activity that is integrated, rather than seeing the world in terms of brand or direct marketing. That chimes with Hayward’s assertion to “forget the line – it won’t exist”.
At the same time, Markey cautions against assuming that everything new is also better. “The danger is that you just chuck last year’s marketing plan in the bin. There are some certainties you can hold on to and others that are a challenge. So don’t just forget direct marketing and go all out for social media or you may find yourself asking where your sales have gone,” he says.
The strength of the emerging model of marketing is that it allows for test-and-learn to be applied to every channel and every type of marketing communication, not just conventional DM. As Markey puts it, “you need to test social media as well as business as usual.”
One of the dangers of predicting the future is that many of the early indicators can turn out to be outliers in the eventual data set. Early adopters of technology are a good example. It is easy to assume from your peer group in the marketing industry that everybody has a smart phone (as well as a Blackberry, laptop and perhaps an iPad, too). In fact, penetration among mobile phone users is currently 34 per cent. It may hit 50 per cent by the end of the year, but relying on a mobile marketing campaign that only smart phone users can access to drive sales would risk ignoring two-thirds of the audience.
Equally, no brand wants to miss out if there is extra heat to be gained from being part of an exciting and emerging channel. To understand just how challenging this is for marketing planners, just compare the volume of chatter about the role Twitter ought to play with the paucity of case studies about its contribution to sales. Aside from the two year-old example of Dell, good luck with your research.
For marketing agencies who need to service their client’s demands by understanding which options will be the most effective, that creates a real headache. Markey says that, “it is really important to have the right agency partner because the marketing department can be in a bubble and just see its own sector.”
Optimising the agency model has been a decade-long process that has still not been finished. “Ten years ago, we were a direct marketing agency. Now we are a digital agency,” says Mark Runacus, managing director of Crayon. At the end of 2010, it took over the data specialist Acquity to strengthen its skills base in that area, but the agency had always had a strong data planning capability.
Coping with technology is just another step in this change process. “When we have not been able to find existing solutions, we have developed them ourselves. That will be even more of a focus for research and development in our business,” says Runacus.
He has seen the way marketing directors themselves have been changing and the growing importance of data, digital and technology skills. As a result, what is being demanded of an agency is evolving. Runacus admits: “We think of ourselves less as an agency, more as something else - but I am not sure what it is yet.”
In that he shares with the rest of the marketing industry a sense of doubt, but also of opportunity. Like a piece of paper with a twist in it, you can go round and around without finding the end.