How Long Does a CMO Live?

The Book, What Sticks, Why most of the Advertising Fails and How to Guarantee Yours succeeds by Rex Briggs and Greg Stuart, says that a CMO tenure is getting shorter every year. His career, not due to stress from business, as a Chief Marketing Officer, is an average of 2 years.

Not a good thought for aspiring marketing professionals.

Increasingly, CFO and CEO are professionals with Finance background, and therefore the approach towards marketing has changed. Marketing needs to be more accountable (read predictable) and linked to balance sheet to forecast figures to the shareholders. Marketing effectiveness or Marketing ROI is the buzzword, each dollar spends needs to be accountable and marketing more scientific and metrics driven.

Hmm so there is an important question does a good Marketing ROI bring Marketing Effectiveness? Does linking Marketing to finance create the robust marketing environment, on which CMOs can jump to be CEO and be business drivers? The answer doesn't lie so much in semantics and formula equation. It requires the understanding of what does what.

I was reading an article- "Marketing Effectiveness. It's more than ROI" by Gordon Wyner, EVP Milward Brown. Great article which helps to define Marketing effectiveness. He states the following as the limitations of ROI...

1. ROI has two important components "R", and "I", Investments. Both should have proper definition and we know that the reality is otherwise. And even when "R" & "I" can be pinned down precisely, there would still be some decision that will have to be made, such as strategic decisions, macro environment impact.

2. Segmentations is one of the three pillar of marketing. The segmentation decision is extremely important and should be financially driven. However, measures of current use, purchase, revenue, and profit can always predict the Lifetime Value (LTV) of a customer.

3. It is very difficult to predict the consumer behavior change, new trends and extract the financial implication.

4. Product Designs can defy ROI calculations for several reasons. And as such only manufacturing cost can be determined.

Even if we best approximate the ROI, one won't be able to deduce the whys was the ROI bad. An ROI analysis that focuses only on the end result would report a financial failure, but will not shed light on why it happened.

The concept of ROI is straight forward. Whether expresses as a percentage of investment or as NPV (Net Present Value) of cash flows overtime, ROI is an important component of the overall process of linking marketing to Finance. But it is not a substitute for a great understanding of how marketing works to achieve business objectives.

Financial Results is not what you see on the Balance sheet/Powerpoint presentation but in the field and it is that moment of truth that decides the result.

Maybe more CMOs need to go out in the war zone, where the real battle of share is and not just appreciate a good presentation in his swank cabin. Maybe this moment of truth will help them fight the battle harder!

Cheers!

Where the suckers moon!

Fortune lies not in the deep

But in the shallows

Where the suckers moon.
These are opening lines from Randall Rothenberg's epic on traditional advertising agency. The great book is aptly titled- The life and death of an advertising campaign.

While you ponder over the opening lines of the book (WTSM is about Wieden & Kennady's account- Subaru), let me bring you to the moot point- how will does one evaluate a digital marketing agency.?

Traditional marketing agency's performance could be linked to market share, volume growth, top of mind recall; the point is it can be tracked to the business performance matrix. How does one link digital marketing agency to business? Why would you one digital marketing agency the other?

Lets take a traditional agency for example. A typical pitch will provide following range of services...
1. Brand Planning or Account Planning: high level strategy to connect macro environment to consumers and business reality.
2. Communication development/Campaign creation: Theme based TV Films, Press ads, Outdoor etc
3. Competitive and consumer information (Hmm, too much to ask for the retainer?)
4. Media Planning and Buying
5. Below the line expertise
The agency is marketing extension to translate the strategy into effective communication and get the message across the consumer. Traditional agency is the brand custodian, creates cutting edge brands. Hence the performance of such agencies in very good FMCG companies will be linked to market share, volume growth and consumer related recall. There can be a science to choose a traditional advertising agency.

What about a digital agency. What I quickly did a random poll on linked to find out how should one measure the performance. I received many answers, but only to confirm my suspicion that there is no formula to evaluate a digital agency. But here are some salient pointers from the poll (there are only execution led)

1. The digital agency must have both capabilities- marketing and technology

2. Should be good with numbers (read analytical). If there is a proprietary tool, it is great as it will help to align and measure objectives.

3. The agency should be able to deliver some good-looking work.

4. Passion for digital.: there is other school of thought as well. I have seen a number of guys coming into this field due to the tendency to try "something new".

5. Media Buying

These are few good pointers to start with for a digital agency, and this is it. Believe me there won't be other parameter. Maybe CTRs, media value ads etc.

However, since there are no great case studies on effectiveness of digital marketing campaigns and lasting impact of creatives, digital looks likely to remain at the bottom of the priority chain. What digital agencies lack is the planning approach like the traditional agencies. This would mean integrating consumers, measuring impact of the communication and coming up with traditional media and digital media synergies.

What could make a bigger impact is the utilisation of research (such as dynamiclogics, which I spoke about in my earlier post), real consumer trend mapping (such as twitter) and measuring the buzz. Go beyond the CTRs and ROIs, and measure consumer opinion (social media marketing).

Maybe, we would also need clients who can support and appreciate the digital marketing efforts. I guess a wishful thinking!

Till then we will only keep things simple- where the suckers moon !

Cheers!

One Billion Users Now!

An encouraging trend, which I noted on eMarketer article; these are the actual quotes from the article (Lisa E. Phillips, eMarketer senior analyst)...

“China has taken the lead in the number of Internet users worldwide, and today only about 20% of its residents are online. While China will continue to lead the world in Internet users, look for India to eventually overtake the US, Japan and Germany.”

The second billion will come from India :)

Cheers!

And The Award For The Most Intrusive Ad Format Goes To...

In the times of Oscar Fever, I wanted to talk about an entity, which is equally exciting and I got to know few days ago. Courtesy my wife, Priya, who recently went to Millward Brown conference.

Dynamic Logic (DL) is one of the lesser known services of Millward Brown. DL focuses on ad measuring effectiveness in this ever complex world of online and offline media. You may recall, MB is a leader in Brand Measurement Studies, Brand performance monitoring and marketing accountability.

Dynamic Logic, has three specific products to help the Internet marketer's brand prerogatives...

1. AdIndex: Test and Analyse digital marketing campaigns


2. Cross Media Research: Evaluate Multimedia Campaign (TV, Print, Internet etc)

3. LinkSelect For Digital: copy-testing solutions.

The best part about DL the cross-media behaviors and the resultant brand impact. As such, there would be very few research agencies, which can put this as specialisation in the service list.
I read a few insights from their book and found them extremely interesting. I would like to share one such report, an extract of Dynamic Logic's Beyond the Click Study done in April 2008 on the subject of Consumer's perception of Ad Formats (and across different Medium).

The study found the following ad which respondents rated as the most negative ....

Telemarketing (72%)

Non-opt-in Emails (46%)

Ads on Mobile Service (37%)

Direct Mail (17%)

Opt-in Email Ads (14%)

Cinema Ads (14%)

Online Ads (13%)

Online Search Ads (13%)

Product Placement (13%)

Radio Ads (7%)

Outdoors/Billboards (8%)

TV Ads (6%)

Magazine Ads (5%)

Newspaper Ads (4%)

(Basis Dynamic Logic's Adreaction Survey, n=933, US, respondents fielded 2007)

The most intrusive formats (not very surprising!) are the Telemarketing and ads on mobile services (72% & 46%, respectively). Whereas, Newspaper, Magazine and TV ads are the ad formats with least negativity (4%, 5% and 6% in that order). What is surprising is that the online banner ads and online Search ads have similar negativity associated with it (7% each). One would have expected Search to be more acceptable format (maybe indicating the impact that the medium would deliver the brand association), however that not the case. Online ads are perceived more intrusive than the Radio and Outdoor Billboard ads.

This was a surprise to me, as we are in the world of web 2.0. The control of the web is with the browser, but the current perception is far from this fantasy. Maybe Online publishers efforts to deliver more inventory to the advertisers are now showing its effect. Do you remember the days of pop-ups and blinking fake-HTML like banners? Irritating and bad it was. However, what this seems to have done is to limit the engagement of the online brand with its consumers and therefore its impact on its overall imagery.

This also has bearing for all of us internet marketers, to be as engaging with the browser as possible, not to focus on click through rates (CTR) and optimise the creative to deliver the best ROI. Maybe also the usage of formats which enhance the engagement such as rich media, gadgets and viral marketing. Maybe start measuring the performance through new matrix such as engagement per click (an aggregation of referrals, time spent, roll overs and clicks).

Maybe, digital marketing still has to go a long way till it starts impacting the consumer consideration set.

Cheers!

S T P (?)

I came across this inspiring note by Norm Rose, the 26 years travel industry veteran. His blog is compendium of interesting articles on travel technology, emerging trends and latest happenings. In this particular article, Mr Norm has covered Expedia's new approach (basis Dara Khosrowshahi's address at PhocusWright conference, Nov 2007). This might not sound rocket science but pretty much what we have always been discussing about. Though written in Nov 2007, but is still valid..

Expedia has 3 focus areas...

> Email: Make it more focused and targeted. Email has tremendous potential of upsell opportunity

> Segmentation: content based segmentation. Premium groups, no cancellation/change fees or other services

> Search Experience/Personalisation: New algorithm will send people to a specific hotel property, therefore increasing the likelihood of conversion.

Thus Expedia's leap from being impersonal to a more personalised interaction. I saw lot of Amazon in their approach, emailing, algorithm, personalisation etc. You can read his full article here.

As an emarketer, I'm sure most of us have always been smitten with the Google bug, Search Optimisation Search Engine Marketing other display related communication to reach out to our target consumer (talk about segmentation, targeting and positioning). I'm also sure that very few of us would have looked internally, at our own database, our own consumers and found effective ways of marketing.

Banking folks are a great example and market according to clusters lifetime value etc (alas, they might be around for long). However, the other service industry players such as travel and retail e commerce still have to long way to go.

Truly, in the context of e-Marketing, the three pillars of marketing strategy- Segmentation, Targeting and Positioning (STP, as we call it) has a new P- Personalisation. Practicing this formula on Search (whether SEO or SEM) is relatively easy. All we need to do is to marry the keyword (read as search intent) to the product offering. But, what Expedia is talking about is the next level. This will marry the customer level data (from CRM) to the content to enhance conversion. And we don't have to look elsewhere, but our own data and integrate this to deliver the lasting consumer engagement. I'm reminded of a scene from minority report, where Tom Cruise, while walking in a mall is offered a proposition basis his Retina scan.

Sounds very simple, eh! But who cares, as long as, we have Google :)

Cheers!

Nielsen Audience Measurement

Finally, Nielsen is here. And we have another choice of getting the audience data in addition to comScore. I'm keeping these links handy in case you want to explore the details...

AgencyFaqs: http://digital.afaqs.com/perl/digital/news/index.html?sid=23283

Alootechie: http://www.alootechie.com/content/nielsen-online-enters-india-karthik-nagarajan-head-its-india-operations

The big daddy's of audience measurement have put India on the map and have announced their online venture in India. TAM, Television Audience Measurement, is also a Nielsen Tool, and is used extensively by the Television folks to get meaningful business insights and innovate to better engagement. However, barring a few top online publishers, I haven't seen any instances of such research being utilised to its fullest. I say this, because a an internet marketer, I never get to hear the comScore/Nielsen data as a support for for any media presentation.

But things may change soon.

Before we get more optimistic, one other entity associated with audience measurement is a usually an impartial industry-wide central body. They are important from the view of the authority, auditing and impartial validation and hence the universal usage of Data. These are bodies such as ABC (Audit Bureau of Circulation) for print media, IAB (Interactive Advertising Bureau) for US, IBS (India Broadcasting Society for television) is equally important to initiate the approach. I'm sure IAMAI (Internet & Mobile Association of India) is taking a note of this as they have a job at their hand in educating a number of us on this subject.

Cheers!

Are you on Facebook, eh!

It was 26th January, the date I started to recieve a number of B'day wishes. I got about calls, each of these callers had a common source- Facebook. I'm not a very active facebook user (as I have mentioned in my other posts), but I would have been one of the first guys to register on Facebook.com. Since it was a new site, I registered with a dummy date of birthday (26 Jan). I guess my non-sociable attitude, laziness and unmanageable application are the root cause for this paranormal behavior. However, the other folks feel otherwise.

Facebook, though a very popular website, in India is behind Orkut by a big margin, 12.6 Mln (Orkut) Vs 4 Mln (Facebook). The difference is even more stark when one compares the audience duplication between the two sites. The duplication between Orkut & Facebook is to the tune of 3 Mln (therefore, it means facebook has only about 1 Mln unique visitors compared to 9.7 Mln of Orkut. However, the growth of Facebook is impressive about 150% growth in Dec'08 when compared to Dec'08 (which means Facebook is only next to Blogspot now).

The numbers might be small, but Facebook has a huge impact on the friends community. Recently, during my younger brother's wedding, I was asked by a 50 year old Auntie- when will you put up the pictures on Facebook? Impressive indeed, Facebook has a great word of mouth. Thanks to the folks at comScore for the data!

Just stumbled upon this link on HindustanTimes.com.

Not trying to prove a point :)

Cheers!