Posted by We can talk community. We can talk loyalty. We can talk brand value. We can talk 30-second spots. We can talk Social Media. All of that is fine and dandy, but for Marketing to truly be respected, it’s going to need one thing and one thing only…
During the two-day summit that was the Canadian Marketing Association (CMA) National Convention last month (full disclosure: I sit on the Board of Directors of the CMA and act as the Co-Chair for the National Convention), both Avinash Kaushik (the Analytics Evangelist for Google and author of Web Analytics – An Hour A Day and Web Analytics 2.0) and Ken Wong (the esteemed marketing professor from Queen’s School of Business) pointed out that as long marketing does not focus (with a red laser’s eye) on profit and the overall economic value that it brings to the company, brand, products and services, all is lost.
Economic value and profit is more important than creativity… it’s sad (but true) to say.
Kaushik actually remarked that it is "God!" If Marketing does not focus on the overall economic value that it adds to a company’s bottom-line, we’re simply going to be referred to as the people who make those cute commercials or the folks who put the pretty pictures around the products and services (and let’s face it, none of us want to be regarded as the people who are "on Twitter and Facebook for us." That’s just depressing). The fight for the c-suite boardroom, where some companies do have Chief Marketing Officers (CMO) – and some don’t - is an important one for marketers to rally around. Let’s not forget about about The Four P’s of Marketing. They’re more important than ever and they’re critical to the overall health and wealth of the company.
Sometimes, marketing does focus on the wrong things.
The first step of solving the problem is in admitting that we have a problem. We are all a little too quick to get excited about logos, commercials, online social networks and iPhone apps versus looking at a P&L or sitting through the revenue generation meetings. Perhaps if we became a little more bold and focused on the left side of the brain as much as we tend to focus on the right side of the brain, there would be that much more respect for Marketing (in the boardroom and in the mass media‘s eyes as well).
We can do this.
Thinking about the business first. Focusing on the numbers and the overall economic wealth of the company might not stifle the creative sparks. In fact, being acutely tuned in to the overall business might force Marketing to get that much more creative. I get where both Kaushik and Wong are coming from. It can’t all be Converse Chuck Taylor’s and Beer Friday. We’re going to have get more serious about diving in the analytics of this all. Even the basic website analytics that are being stored within a finger’s reach aren’t being capitalized on the way they should. We’re still too busy looking at unique visitors and traffic spikes versus running multivariate testing to see which landing pages the customer prefers. That doesn’t kill creativity, that makes creativity more creative. Instead of designing one page (and hoping our gut instinct is right), we’re now able to experiment with multiple pages and then use the data and analytics to optimize.
This will push creativity.
Instead of seminars on brand management and how to market your company on Facebook, maybe there needs to be a marketplace for courses on profit and economic value? How many Marketers do you know that would attend one of those seminars? We’re going to have to push Marketing in this direction. It’s the one thing all of the other business units are paying attention to, and it’s probably one of the few things that – when done right – will really put Marketing where it deserves to be in the corporate food chain (think: close to the top).
Who is with me on this?
Never another podcast episode or article 
I agree with you in most every sense here, and honestly, when I took my first marketing class during my MBA, I didn’t like it that much at first because my marketing profs were hardnosed about metrics. I came into it expecting it would all be about creativity, message, branding, etc…and they made me realize that all of those things have to either contribute to profit or cut down on costs. Otherwise, they are not valuable.
I think the problem we run into right now though is that you can trace social media efforts back to dollars in many cases, but the path is generally not direct (unless you’re using coupon codes and the like). Without that direct path, it becomes much more difficult for marketers to justify those efforts…but then maybe the extra work that it takes to justify them is what separates the great marketers from the just okay marketers.
Spot on Mitch!
At the end of the day, the agency’s role is to help businesses meet their business goals, solve business problems, and overcome business objectives. And it just happens that many of the goals, objectives and problems have a monetary value attached. I’m a founder a creative company, and have been hiring business-minded individuals to bridge the client and agency gap, and the responses have been positive and great.
In a typical ad agency model, the chief creatives end up working with the client to translate the objectives and direction to the team, and this is often done with a creative mindset, often missing the key business objectives (bottom-line, roi, figures, etc)
I think media and creative companies would be in a better place, dollars well spent, and happier clients, if we embrace this approach and continue to push Marketing in this direction. At the end of the day, it’s about the client and their needs.
@Eric Pratum – I’m not sure that we can effectively track social media efforts and provide concrete numbers, yet. This might be one of the reasons why companies across the globe are having a difficult time to justify shifting their ad dollars from traditional to social media. But, if you were to pull social media efforts at a brand that currently engages online through social channels, there would be a measurable dent in their bottom-line, even thought we can’t track the upfront efforts.
I think the leading edge has shifted from getting traffic through search, social etc. to both getting AND converting it. Just as SEO became ubiquitous over the last three years or so, I think conversion rate optimization (CRO) is the next big thing. Get in early while you can, right?
Sergio Zyman, in his book “The End Of Advertising As We Know It”, which is about 10 years old, defines marketing and advertising as “”selling more stuff to more people more often for more money more efficiently.” I am a focus group moderator, and am amazed at how much of what is discussed in focus groups does not relate to this definition, or the fact that many research briefs fail to mention basic profitability as a goal of the research.
I think you are stating the obvious, but with all the noise around marketing lately, a lot of people are running around getting connected instead of getting new customers.
ROI, has always been the corner stone metric, what return am I getting for my advertising dollars?
Companies advertise to increase sales and therefore profits, marketing can increase sales, but the company is responsible for making sure those sales are profitable.
For almost 20 years I have worked in client-side of Marketing Departments in positions ranging from Product Manager to VP of Marketing. The only thing I don’t like about your article is they danced around what needs to be said. Return-on-Investment. It is all that matters. Anytime a marketing person subsitutes branding or “we can’t calculate” for ROI, means there is no ROI. Which means it’s not marketing. Which means you are wasting your company’s time and more importantly money (see profits). Now that I am on the agency-side of the business I am amazed by how many agencies simply avoid the ROI question. Trust it’s the only thing that matters to those sitting in the C-Suite.
It think the basic premise of what you have to say is true. Creativity for its own sake doesn’t do any client any good. For years in the advertising world, a basic principle always held true: those pieces that won the creativity awards rarely were effective communication tools for the brand. Yes, they were funny, but no they didn’t help drive sales.
I believe as marketers we all should put as much time into preparation as we do execution. Like going on any great journey (not to get too philosophical), you have to figure out where you are headed before you begin. Marketers need to develop a goal at the outset, and if possible, a goal tied to revenue. Figure out where you have to go first, then figure out the path to get there.
In marketing, creativity is not cool colors and designs. It’s not witty headlines and engaging copy. It’s solving a problem. And for me, this is where the true creativity lies. The figuring out of the puzzle. How do we get from point A to point B? Problem solving is the core to all creativity.
However, I think it is erroneous to think that all goals are going to be able to be tied directly to revenues. There are always going to be road blocks.
For example, a multi-million dollar building system is not going to be able to be sold online, or through DM, or a print ad. With these products/services, marketers are then relegated to defining success parameters in a different way. And more often than not, those usually are focused on lead-generation rather than revenue production. In this scenario, there is nothing we can do to affect revenue growth through our best marketing efforts. We can only bring the client to the door, but it’s up to them to get through.
But I agree that we should be pushing our ourselves to be thinking of how our solutions can directly (and measurably) increase revenues, or how they can position the client for revenue growth when certain factors are beyond our control.
I attended day two of the CMA conference. It’s funny to see the community distinguishing between marketing and the rest of the corporation. In the marketing focused organization nothing has really changed except access to more empowering data. The best clients still see finance, operations, product development, HR and promotion as complementary efforts to get product to market. This kind of tension is usually a good sign. It means we’re evolving and innovating.
Matt,
I also made the client to agency switch. One of the most surprising things in creative briefs is the desire for ‘hits’. I’m in your camp. If it doesn’t jingle, it doesn’t have an ROI.
Ultimately the end goal is profits. Without profits you don’t exist. However, if your products or services aren’t usable, are difficult to understand, are not priced appropriately, or don’t contain that magic zing to catch the customer’s eye then you won’t sell it.
I’m sure the following products were profitable if they had demand:
* New Coke
* Those MP3 players that pre-dated the iPod
* Web Van grocery delivery
I agree with you that your end goal is profits. But you have to know how to work the softer skills or you’ll just grow inventory of unsold product. The danger with a hyper-focus on products is that marketers have a tough time detaching themselves to implement the softer skills. It’s a warning to us all. Play smart out there!
-Bob
@Andre How is it that you would not be able to track the upfront efforts? We did it at my last agency for Microsoft, Razorfish, etc on a huge level, and we do it for nonprofits at my current agency. Time & resources invested measured against coupon code redemption, clickthroughs, hard impressions from web analytics, & estimated impressions from compete data, etc, etc, etc…basically all of the response that you can directly measure and/or get a more solid measurement of than you would through traditional channels that use really fuzzy numbers like Nielsen ratings, billboard impressions, etc.
What does a click really say about the quality of the click, in other words – the user? How can we measure the quality.
Looking at hard data is a classic quantitative approach. And there’s always validity with numbers. But, how do we measure the quality of the data? Certainly we can make educated interpretations of the data, but this will only clarify the big picture by minute increments.
I’m a firm believer in numbers and concrete data. I use it. Numbers cannot lie. But numbers are representative of quantity, and not of quality.
If 500 individuals “like” a post or a page, it is simply 500 individuals who clicked the “like” button. We can assumer that the higher the number, the greater the probability of a genuine click. But this does not give a picture of the quality of the clicks and users.
I’ve just been thinking about this lately; how to measure the quality of concrete data (esp. of online and social initiatives). Any recommendations?
Mitch – a great set of comments and how right you are to reference the 4Ps of Marketing which so few institutions/marketers properly understand the importance of both Pricing and Product.
The moment you have responsibility for Pricing, you hit the Profit line. The moment you own Product, you hit the SG&A.
Pricing is the most impactful, both in speed of impact and scale of consequences. Anyone can launch a duff product, but screw up Pricing and the shareholders (and the CFO!) will want your head on a spike… Maybe that’s why so many Marketers stay in the land of the Creative. Its lower risk and subjective, etc.
Pricing requires a relationship with the CFO, Procurement, Treasury, etc and a really robust process with stakeholder signoff. I have owned and run pricing for many years, inside a Marketing function. Its not without it’s “moments”, both good and bad.
Product also demands a process for “insight”, another science based discipline, as well as an understanding of how the entire proposition works financially, inside and outside the company…
In truth, Marketing requires a balance of competencies across the 4Ps, and in some real depth in each. I agree that too often the more subjective nature of the function can be more appealing (often made so by wonderful creative agency pitches!), and that could be a large part of the problem.
In B2B marketing, its possibly less of an issue, but I still see agencies proferring B2C strategies to a B2B client, and it doesnt help the cause.
yeah, I agree that marketing should ultimately focus on Economic value of the company, sales and profits. At the same time marketers achieve the above said goal by efficiently handling the 4Ps, and definitely marketing involves creativity. But the ultimate responsibility of achieving the above said goal rests with the Top Management and of course marketing plays a supporting role.
Hey Mitch,
I think everyone who reads and comments on this post will agree profits are necessary.
Most agencies and companies, however, focus on “quick-wins” and the “short-term” over and over.
While, at first, this may be needed to build momentum or market share a “long-term” approach to building online content and connecting with people via social, etc. is key.
The catch?
During this time a company might have to surrender profits (short-term) to create a strong foundation (i.e. audience and profits) for the future.
Using analytics & metrics to determine what content people care about will be key in this process.
My 2 cents.
@mitchfanning
Working for an agency, I completely agree with Mitch Fanning on the fact that agencies and companies too often look at the short-term or quick-fix scenarios rather than focusing on solid marketing centric goals and the long-term.
More specifically, online advertising and the use of Social Media channels generally work best with long term strategies.
This is spot on Mitch… Too often do we see people get touchy feely with their marketing, but if the end goal is to make people laugh, than you’re just wasting resources.
Using the metrics really gives the marketer the ability to drive home the message to it’s target, and it helps guide where your creative process goes when making new marketing materials.
For example, if you have a great message and you’re driving traffic to a landing page that simply does not convert, you can use the metrics to get an idea of what type of information people are looking for when they get to that page to make it front and center. Instead of just whining that the entire campaign isn’t working and blaming the system for being flawed.
Analytics, I feel, is the marketers greatest weapon, and sadly it is also the most overlooked.
Great post Mitch, this interests me a lot. If we as marketers have a better idea of the economics behind marketing strategy it would be that much easier to sell to a potential client. Would you suggest to always attach monetary metrics to ideas now? Or as much as one can in a given marketing campaign? I can see how this might be difficult but I think for myself I’m going to need to focus more and more on it.
Thanks a lot for the post!
Jeph
I doubt I can make a recommendation on how to measure quality without knowing a lot about a specific campaign or program, and even if I did, I’m sure the debate over what defines quality could rage on across the internet and beyond ad infinitum…unfortunately. I would love to be one of the first to come up with a quality measurement program that fit most any situation though.
As far as the hard numbers go, I am happy that we can at least get definitive and/or solid extrapolations of social media’s ROI in terms of dollars saved due to answering customer service questions in a public channel (maybe Yahoo! Answers) versus a private channel (maybe phone), in terms of sales generated from channel-specific coupon codes, etc, etc, etc. Not always of course, but in many cases I deal with.
Click quality though is a tough thing to figure in on. Companies like Meteor Solutions have a pretty interesting take. I have not been using it for a current client, but through a mix of other tools, we’ve been able to track sharing of our social media content and, for example, found that the average blog subscriber shares at least 1 blog post per week with 4 friends, one of which becomes a subscriber and shares it on with a further 4 friends. In this case, we only count the friends who actually view the posts. We’re not concerned with how many friends received a Share message, but did not click through. Tracking that has been intriguing. It’s allowed us to test content and look at what types are more effective for sharing vs subscription rates vs whatever else.