Commentary

Marketing Logistics - A Concept Whose Time Has Come

We talk about Marketing strategy and marketing tactics. Interestingly, we get our business and marketing terminology from warfare.

Up until the early 1980's, strategy and tactics defined wars. World War II was a strategic war, for both sides. Vietnam was a war fought for strategic purposes that ended up being tactical. The Falkland's War was different. It was the first war (ever?) fought that was based on logistics. There was certainly no strategic reason for Britain's insisted ownership of these "rocks". While the Brits are proud of fighting this battle "alone", they required American satellite intelligence and U.S. naval logistical support for supplies in order to defeat the Argentinean invasion (or from the Argentinean perspective, repatriation).

The Gulf War was also fought from a logistical standpoint. The Desert Storm Coalition (headed by the U.S.) did not go across the "line in the sand" until everything was in place. Planes, fuel, ammunition, tanks and men brought by ship and plane. Ships gathered in the Persian Gulf. We crossed the line when we were fully supplied and ready. I don't know that there has been another war in history whose start was so calculated.

advertisement

advertisement

Marketing Logistics

Much is made of marketing strategy and tactics. We would argue that now is the time to make a serious study of your marketing logistics and what you have to do to improve on them or what new ones you must adopt to "win the war".

This may or may not be obvious, so I'll give some examples. Most center on data, but there are other issues too.

Sales

Most categories of products outside of consumer package goods have inadequate sales information. For example, computer software, hardware and peripheral companies, consumer electronic companies and many other upscale categories sell to distributors who sell to stores, in the simplest scenario. Good real time tracking systems do not exist for most of these companies. And unlike consumer package goods, there is no Nielsen or IRI like service to track sales. Without good sales data, (time/date of sale, location of sale), it is incredibly hard to attribute or predict sales activity as a result of marketing expense. The result is that huge companies are flying blind with their budgeting process.

Importantly, the package goods folks are not stopping with the best tracking in business. Procter and Gamble is testing the embedding of chips into toothpaste and other packages. They will know when it goes off the shelf, into a basket, if you put it back on the shelf, and for sure, when it is rung up and where. While we recognize that this is in early stages, if it turns out that they can afford to do this with good reliable data resulting, the value of application of this technology to other categories could be beyond calculation. So, where are the technology companies in this, getting led by a soap factory?

Intelligence

Specific to the world of advertising, we could use better competitive media spending intelligence. The online category has a low degree of accuracy (oftentimes + 50% for a campaign and + hundreds of percentage points for an individual site within a campaign). But the data is available quickly. For some sources, within a week. The offline spending metrics are often as close as 10-30%, but it takes months before we get the data. We need better data faster. We also need easier ways to track creative executions and strategy changes. Wonder how far this AI stuff really is from execution?

Resources

As we've stated before, we need data that is comparable. Across all media. And we need it yesterday. The "most measurable of all media" phrase for the Web just does not cut it anymore when we still cannot compare basic metrics to traditional media. A lot is being done about this, but not nearly enough of an investment is being made by the companies who are the largest marketing spenders that have the most to gain. They should be underwriting the four or five industry standards committees big time.

Once we get the data, we need better access tools. They must be intuitive, with the ability to slice and dice, cross tab, and export to standard formats for further manipulation. And there needs to be more awareness and usage research performed regularly.

Clients need to fund agency involvement analysis of the resources available and to perform research when data is not available, something not all are willing to do within the current "fee" compensation plans (a euphemism for reduced compensation). After all, most companies celebrate the marketing department head that holds or reduces the line item on fees rather than structuring compensation that rewards the agency for increased productivity in the form of more effective campaigns.

Tracking

Online has been heralded for the ability to track user clickstreams, actions and transactions. Now we can track users who are exposed to a message (banner, button, tile, skyscraper, pop-up, interstitial, etc.) in addition to those who click. But we are lacking the same kind of intelligence about consumer actions generated by offline activity. Technology is in the testing stage, but it seems like it is going to be a while before print and broadcast can be measured on the same basis as the Internet.

If a company put serious resources into the areas above: sales tracking, competitive intelligence, application of resources, the people to get the job done and tracking for both online and offline efforts, the resultant leverage would be significant. Strategies and tactics are important. But so are logistics. Smacks of getting back to basics but sometimes, doing the basics is the difference between success and failure. We all need to examine what we can do today to increase margins and leverage our information.

I'm sure that some of you have other examples of marketing logistics that should be applied to technologies that are available today to assist in marketing logistics. We'd like to hear your input.

- David L. Smith is President of Mediasmith, Inc., a San Francisco and New York based Media Boutique, specializing in integrated marketing solutions. He can be reached at smith@mediasmithinc.com

Next story loading loading..