I won't get wistful, but as I write, I'm finishing my last days as president at Marketing Management Analytics before taking over as CEO of [x + 1], a digital marketing optimization company. As I begin to refocus on the world of digital full-time, I can't help but think about the general marketing lessons learned over the last four years.
Working across industries including consumer packaged goods, telecom, financial services, pharma, fashion and retail, has revealed some common truths about marketing effectiveness and accountability.
>> Companies are still incredibly confused about marketing ROI. They struggle to define it. They struggle to measure it and they struggle for agreement on how to act on the results.
>> Accountable marketing starts from the top. Companies that are successful in managing marketing performance have a senior-level champion for the effort. That champion could be in marketing, but does not have to be; often the champion is the CFO or head of strategic planning. But the champion must have the ability to set an agenda across departments, and to allocate a budget to the effort. Without an empowered champion, organizations rarely get beyond internal competition and self-justification between marketing siloes - and marketing never wins the confidence of the other business functions like finance, sales and operations.
>> Marketers are optimists. Except for seasoned direct marketers, marketers almost always overestimate the impact of their programs. At the same time, marketers also tend to overestimate the impact of competition, and underestimate the impact of macro economics, weather and shifting consumer trends. What does this mean? Improving the marketing mix has benefit, but understanding the structural dynamics of the business opens up more substantial opportunities to improve sales and profit.
>> ROI measurement often misses the point. Companies newly on the accountability bandwagon tend to over emphasize backward-looking performance evaluation, and miss the opportunity to use analytics to make better business decisions in the first place. Consistently successful marketers integrate forward-looking analytics into their planning process. They avoid the use of ROI measurement as a report card.
So given these observations and four years of client studies, what marketing vehicles work?
TV works. Still. It just doesn't work as well as it used to. Part of the reason is that many media planners have not yet caught on to the fact that many old TV planning concepts no longer apply. Breakthrough is a myth. Pulsing is usually a poor strategy. Frequency is overrated. Network prime is an expensive indulgence. Clients must be careful not to saturate their TV spend, in short bursts or over time. TV generally works best when used as a consistent, foundational hum underneath a diverse media plan.
Print works. Across many clients, print tends to be underspent, relative to TV and digital. Yes, many people still read.
PR works. Relative to paid media, pr delivers a big bang for the buck across many industries.
Digital works - when executed well. More than other media, digital performance is execution dependant. Done well, digital campaigns combine display ads, search, Web site and e-mail with offline support in a synergistic fashion. But when digital is executed as a cacophony of siloed, disjointed tactics, results fall flat.
And what doesn't work?
Expensive sponsorships don't work. While sponsorships can, and do, move the needle on sales and equity measures, rarely does that movement justify the sponsorship fees combined with the cost of activation.
"Spot activity" doesn't work. The premium for spot TV and local radio rarely pays out for national brands.
Network prime doesn't work - at least not well enough to justify its premium relative to other alternatives.
Overspending on anything does not work. Inertia and momentum are laws of physics that apply to brands as well. There is only so much a brand can be pushed by paid media in a given period of time. Spending more, on any combination of tactics, is a waste of time and money.
John Nardone is CEO of [X+1]. (email@example.com)