Speaking at the latest Marketing Forum, marketing sage Philip Kotler raised some eyebrows with his dismissive remarks about TV advertising – “a waste of money” – and the need to rethink budgets in favour of other avenues, such as word of mouth and PR.
Later he warned that companies’ current approaches to innovation, which work mainly within pre-existing market definitions is leading to their “hyperfragmentation”, resulting in slow growth and “thinly sliced” profits.
In short, the marketing establishment’s most respected figure was effectively saying: “It’s official: marketing isn’t working any more.”
Bored, anyone? Heard it all before? Perhaps. But that’s because we’re still only scratching the surface of this issue – as a BT InsightExec debate next week on this subject intends to show*.
Most explanations of our problems revolve around three basic themes. The first is that the media revolution means it’s getting ever harder to get the right messages to the right people, cost effectively. You know the mantra: “Twenty years ago, three minutes of prime-time TV would reach 80 per cent of our target audience at the cost of X. Today, to achieve the same reach, we would need hundreds of spots at an astronomical cost.”
Second, audiences are getting less receptive to marketers’ messages. They’re more marketing literate, sophisticated and so on. Again, you’ve heard it all before.
Third, we’ve got a crisis of measurement and accountability. Proving how effective a campaign has been is the be all and end all for marketers.
If there is an emerging consensus about possible ways forward, then it looks something like this. We need more and better customer insight; more engaging, entertaining, creative communications; media-neutral planning and integrated communication strategies; plus, of course, better financial models and measurement systems.
So here’s a suggestion. This emerging consensus is wrong. It misses the point. It gravely underestimates the deep, structural nature of this crisis.
It assumes, for example, that the essence of the problem lies in the communications side of marketing, and not the actual value companies bring to market.
It assumes that the solution can and will be found within the current balance of power between consumers and companies – where the seller exercises effective monopoly control over the entire marketing process, including the subject and content, channel, timing and purpose of all communications.
And it assumes that the measures that matter are those that focus on the sellers’ goals. We are obsessed about the return on investment (ROI) we are achieving for companies, but we don’t stop to ask what the ROI is for consumers. We want to know, down to the finest detail, how effective we have been in finding customers for our products, but there aren’t any measures to calibrate how effectively the same activities help consumers in their search for value.
Each of these assumptions is questionable. In markets characterised by product parity and choice overload, branding is more about hiding sameness rather than articulating difference. One reason why “marketing isn’t working” is because there is nothing “New!” or “Improved!” worth marketing in the first place. The problem lies on the value side, not the communication side. The measure that’s really driving things here is consumer, not corporate, ROI. What reason do consumers have for investing their precious time, attention and energy in the company’s marketing activities?
Where the problem lies is on the value side rather than the communication side, Kotler’s warnings about over-narrow new product development strategies move to centre stage. In many companies the “customer focus” mantra has degenerated into little more than a disguised form of seller-centric narcissism. A customer is somebody who buys what we make. The more we “focus on the customer” the more we focus on what we make. In which case, “customer focus” is just another way of regarding our own products and needs in a mirror.
So what about the communications side? One overall effect of the digital revolution is to extend the processes of choice from products to information. Increasingly, consumers are in a position to choose what sorts of information to access, from which channel, when and for what purposes.
As it unfolds, the emerging infrastructure of internet, mobile telephony and so forth, points to the end of sellers’ former monopoly control over marketing communications content and processes. We are moving from “top down” to “bottom up” messaging; from sellers saying “here we are, this is what we have to offer” to buyers saying “here I am, this is what I want”. These emerging mechanisms and processes take us way beyond “media neutrality” and “integrated marketing communications” while also raising fundamental questions about the role and contribution of communications creativity.
They also pose a new challenge for companies: not only how to align “what we make” to the needs of consumers, but how to align “how we go to market” to the changing go-to-market priorities of buyers. Hence the emerging challenge: how to make our marketing – as well as our products – worth buying. (This is more than a neat phrase. The finance director may hold the budgetary purse strings, but the people who actually pay for the company’s marketing are the consumers who buy its products. Marketing should, therefore, be “accountable” to them.)
In her new book, New Consumer Marketing, Cranfield School of Management researcher Susan Baker sums up these “tectonic shifts”. “New fault lines are emerging with sudden clarity,” she writes. “We are moving from a production-driven to a consumption-led economy, where the nature of exchange is different, and this difference is exacerbated by the force of the internet and e-commerce.”
Baker argues that many business-to-business marketers are well placed to adapt to this shift (they are used to “taking orders” from their customers – in both senses of the phrase). But consumer marketers “face a daunting prospect: quickly undergo profound change, or undergo certain death”. Is it really as stark as that? Next week’s debate won’t provide a definitive answer, for sure. But it does look set to raise some interesting questions.
* BT InsightExec Debate on ‘Why marketing isn’t working… or is it?’ October 7, Central London. For details contact Jane Johnston, 01256 816181.