Taking Measure: Deck Chairs on the Titanic

Taking marketing work sure isn't easy. The fractured media landscape and continuing evolution of the Internet as a marketing environment has exponentially increased the complexity of managing consumer demand.

And while this environment presents numerous new opportunities for marketers to explore, few companies have the skills in-house or the manpower on staff to pursue them. As a result, marketers have become the ultimate outsourcers, relying on an extended web of external research firms and agencies to get their jobs done. The problem is that for most companies, it just isn't working.

In evaluating the marketing effectiveness of company after company, I see marketing programs that are just not producing adequate returns. As a result, CMOs are turning over and agencies are being churned in a search for new leadership and new ideas. But few companies are making progress; their changes remain mostly superficial. They may rearrange the chairs, but it is generally the same people who are recycled from role to role and agency to agency, working in the same basic system. The effectiveness of marketing overall is still hit-or-miss, the result of the occasional executional home run, rather than consistent strategy or an integrated planning process. To avoid a sinking feeling:

>> Discard the outdated notion of mass marketing. Instead, re-evaluate approaches to segmentation, targeting and positioning. Marketers must embrace a more flexible and adaptive concept that allows a brand to communicate different facets of its selling proposition depending on the target - and where that target is - in the decision process. Digital media supports this sort of needs-based micro-targeting, but too often marketers haven't developed the variety of messages needed to most effectively address behavioral targets.

>> Hire a marketing strategy firm that has strong project management skills and charge them to develop overall strategy based on the new segmentation, and to provide a "communications blueprint" for the various agencies to follow as they develop creative assets. Then let the strategy firm manage the overall process. Agencies cannot do this on their own. Because capabilities are siloed, they also lack broad project management capabilities. Marketers should expect outstanding creative execution from agencies, not cross-agency coordination. Stop expecting agencies to deliver capabilities that they do not have.

>> Start making decisions based on quantitative methods, rather than gut judgment. In a world of micro-targets and fragmented media, there are too many points of communication with too many possible messages to manage without quantitative support. Advanced modeling techniques supported by automated optimization engines will consistently deliver better decisions. Get over the fear of the black box, understand it, and use it.

>> Embrace financial accountability. Build a partnership with finance, and together make it a priority to measure and justify marketing expenditures based on financial returns. Yes, this is harder than it sounds. It requires sweat investment as well as funding. It requires new skills and cultural change up and down the marketing organization. But if marketing's overriding mission is to drive growth, then budgets must be justified in those terms. Companies like Avon have followed this path to larger marketing budgets and accelerated growth.

Are marketers really prepared to radically restructure their approach to brand positioning? Do they have the skills to succeed in a quantitatively driven environment? Can they learn to speak finance? Based on an Association of National Advertisers' 2007 marketing accountability study, not just yet.

But the change is coming, and it will be led by a new CMO. Executive search firm SpencerStuart recently heralded the death of "the advertising CMO." It profiled the new CMO as a "chief growth officer" with a "hard-nosed venture capital perspective" who demonstrates "financial discipline and investment smarts." Unfortunately, there is not yet enough talent that fills this description, as 50 percent of current CMO openings have been open more than a year.

CEOs will wait for the CMO candidate who can champion this prescription for marketing success, rather than just rearrange the chairs hoping for different results.

John Nardone is chief client officer for Marketing Management Analytics. (

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