The following is an excerpt from my upcoming book with Joe Pulizzi called Killing Marketing.
If I said that the marketing leader in business should be of the same stature as one would regard the most advanced practitioners of art, science, law, and/or medicine most people would probably laugh.
Today, while perhaps sexy on the outside, marketing for most businesses is in a depressed, average state.
Marketing is that activity that most companies wish they didn’t have to do. For many businesses, it is simply a “tax” on the system, and the focus is putting as little investment into it as possible. Most businesses are striving for what I call “minimum viable marketing”. One CEO I spoke with directly said “marketing is a tax. Therefore I’m going to cheat sometimes, cut it frequently, and always use all my power in order to pay as little for it as possible.” For many business-to-business (B2B) companies there really isn’t a strategic marketing leader in the organization. It’s simply a collection of people who do marketing-like-things. It may report to sales as an “internal agency”. Or if there is a leader – their sole focus is to pour more leads and opportunities onto sales teams.
On the business-to-consumer (B2C) side, marketing is apt to be taken more seriously, but is still “the department that simply finds ever more clever ways to dispose of what the company makes.” And, as the quote from marketing legend, and professor Philip Kotler says “marketing is not the art of finding clever ways to dispose of what you make. Marketing is the art of creating genuine customer value. It is the art of helping your customer become better off.”
Some Companies Are Good At This
Now, this isn’t to say that there aren’t some firms that have clearly defined ideas of what marketing is and how it works. Companies like P&G, General Electric, LEGO and Apple have excelled in producing some of the world’s leading strategies. In fact, P&G is legendary for its approach to marketing training. P&G marketing alumni include former Microsoft CEO Steve Ballmer, HP CEO Meg Whitman, General Electric’s CEO Jeff Immelt, current Estee Lauder CEO Fabrizio Freda and Unilever’s CEO Paul Polman.
But for every P&G or General Electric, there are hundreds of thousands of other companies that are struggling to identify the strategic nature of their marketing efforts. The rapid growth of digitization and new business practices have simply swamped these companies, to the point where today’s marketing departments are chasing technology in order to try and digitize traditional processes rather than create new strategies and figuring out how to digitize them.
And The Basic Practices Haven’t Changed All That Much
The basic practices of marketing have not changed in 60 years. Most marketing departments, despite the fact that they now have a twin department called “digital marketing” these days are still focused on the same functions. They create, run, and iterate temporal campaigns across traditional (read expensive) media flights and hope for improving results on getting their message to resonate in front of rented audiences. Then, simultaneously, they support other efforts – from sales to eCommerce to public relations and other departments with creative assets that can feed those department’s time-based campaigns. As we said in the beginning of the chapter. This has always been the job of marketing – maximizing the reach of our message across campaigns, and minimize the frequency with which we have to do it.
But, its efficacy – or at least the perception of efficacy – continues to degrade over time. In a recent interview in The Marketing Journal, Bernie Jaworski, the Drucker Chair in Management and the Liberal Arts at the Drucker School of Management for Clairmont Graduate University said:
“I think there’s a lot of ambiguity about where and how marketing can best add value to the organization. 50% of the CMO’s role is not marketing. Furthermore, in many situations companies have lost “control” of their story.”
Consider two trends. In the 2016-2017 CMO Spend Survey, research firm Gartner found that marketing budgets increased to 12% of company revenue. This was the third consecutive year of budget increases. The biggest increases were in digital, where content, digital commerce and digital advertising were the biggest categories.
Should we see this as good news? Well, possibly – but you can also make a strong argument that this is chasing good money after bad. Sure, we’ve adopted the new technologies, the new language, speaking in 140 characters, become customer-centric, and diversified our investments to address the fragmentation of audiences. But as has been the case for more than 100 years, our marketing investment is still almost entirely predicated on our current relationship with the media.
Marketing departments are still wholly dependent on the relationship that media companies have with audiences in order to periodically gain access to them and put our message in front of them.
The investment math is very simple. We try to maximize the reach of our message (the thing we want to persuade audiences with) and try to minimize the frequency (or the inherent cost) of doing that very thing. In other words, our job is to reduce the friction of cost of reaching and influencing an audience. And we’ve used the same approach to doing that since mass media began. Whether it was print, radio, television, public relations, SEO, digital advertising, or native advertising it was all about maximizing the reach, while minimizing the cost of frequency.
And while our marketing investment portfolio, and frequency of trading has shifted over the years – the fundamental philosophy has stayed the same. We base our marketing and advertising investment on whatever our current relationship is with the media. Why? That’s where the access to audiences are.
What Kind Of Investor Will We Be
Unfortunately, this speed and technology has evolved marketing into much more of a day-trading investment rather than long-term value investing. Businesses now routinely expect return on their investment in months, weeks, days or even minutes. We’ve invented real-time marketing where technology and research companies promise to “unlock your data” so as to provide you with return on investment in “real time”. Marketing departments are now fascinated with predictive analytics, artificial intelligence and machine learning – where we can theoretically know what the results will be before we even begin. Now that’s return on investment.
Thoughtful strategy has given way to execution. Deep insight has given way to failing fast. Innovation has given way to acceptable inefficiency.
Consider this: in 2014, the Internet Advertising Bureau (IAB) – the standard-bearer of digital advertising – stated that because of ad blocking technology, advertising click fraud and other technology issues that marketers should “aim for 70%” viewability on their ads. This would be the new standard of acceptable viewability of an advertisement.
Think about that for a moment. As marketers, we have come to a place where, as renters of media access, we have done the calculus and determined that a 30% “tax” on a media buy is less expensive than doing something completely different. Perhaps this is the reason we’re seeing digital ad budgets go up. It’s not that it’s more effective, it’s simply becoming more expensive to maintain the effectiveness we’ve enjoyed.
This focus on speed and execution has grown so bad that at a recent workshop that Joe and I were teaching an attendee – a marketing director for a large food brand – came up to us and recounted the story of his latest job interview.
He said that he had met with the marketing team at another food brand to see if he was appropriate for a new digital marketing director position. In the interview, the team asked him what he might do in his first few weeks on the job. He proceeded to outline how he might work with the team to develop a new content strategy to apply to marketing, content marketing and social media. The team cut him off and said “what if we don’t have time for that?” He asked, “you don’t have time for strategy?” The team said, “no, we need to deliver ROI. We don’t have time for analysis. We just need you to come in and start getting results with social posts and email. How would you do that?”
He didn’t get the job.
What If We Killed Marketing – And Restructured It Completely?
What would happen if we completely flipped the idea of the marketing function on its head? What if:
- instead of starting with trying to figure out the features and benefits of the products we offer for sale, what if we approached the whole structure and function of marketing to leading from our media strategy. What if we went from campaigns where we try to reach (with frequency) customers and persuade them to “buy now”, to an editorial strategy approach that created valuable experiences for audiences that actually want to hear from us?
- what if instead of trying to figure out how our owned media can support our advertising campaigns, what if we started with how paid media advertising can support our owned media original content strategy?
- what if spending all our time trying to optimize digital advertising to make it ever- cheaper, we ceded that creating original content requires different talent, is a more expensive endeavor, but can add more and different kinds of business value than simply clicks, conversions and sales.
What if we looked at marketing as a business model, rather than as a functional cost center?
Wouldn’t that be interesting?
Stay tuned for more on this.