To grow their scale beyond borders, marketers must negotiate a maze of channels, data and cultures
still-shaky global economy and consumer confidence.
However, marketers are doing what they can to meet the challenges given the opportunities in specific markets. The World Bank projects that GDP will grow 6% annually in developing countries through 2012, including in countries such as China and India, but increase by less than 3% in the U.S. and 2% in Europe. Researchers' projections about global ad spending tell the rest of the story.
According to media agency ZenithOptimedia's latest report, developing markets are expected to grow their share of the global ad spend by 4 percentage points to 34.9% by 2013. While the U.S. remains the largest market in advertising investment — at more than three times the size of the second-largest market, which is Japan — its growth rate is eclipsed by the emerging markets.
Through 2013, the North American ad market will grow 3.3%, while Western Europe will experience a 2.8% uptick, according to ZenithOptimedia. By contrast, Latin America is expected to grow 7.1% in the same period, and Central and Eastern Europe are projected to rise 10.4%.
Those growth markets are where brands want to be. Accountable direct marketing strategies encompassing channels including postal mail, email, mobile and social media — coupled with an intensified focus on data analysis, measurement and performance — are helping them establish a beachhead in these parts of the world.
"Global marketers are more accountable around the world, and we live in world where marketers must clearly demonstrate the return on investment," says Tim Suther, SVP and CMO of marketing services firm Acxiom Corp., which serves clients in the U.S. as well as Europe, Latin America and the Asia-Pacific region.
Another executive agreed. "There's a lot of demand on marketers to be much more performance-based: how marketing is affected and how learning is shared around the globe," says Caroline Worboys, managing director for the U.K. of global database marketing firm KBM Group, a subsidiary of WPP's Wunderman. "These are the really big factors driving this need for marketing to not so much be turned into a global activity as figuring out how one can get synergy between the local and global factions."
Data diving across datelines
Analytics are at the heart of today's domestic and global marketing efforts — something Worboys understands intimately. The appointment this past August of Worboys coincided with the integration of Wunderman U.K.'s data management resources into those of KBM Group to create for clients what the company calls "a broad, customizable spectrum of the data and marketing services that are critical to today's digitally oriented marketing campaigns."
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Key to the global marketing process today is clearer, closer communication between agency assets across borders about strategy and data, Worboys says.
"One of the things we're doing a lot more of is sharing knowledge — a campaign that worked in Thailand someone would think wouldn't be relevant in the U.S. or the U.K., but how to determine whether the campaign worked well in Thailand versus the U.S. takes a vast amount of data and measuring against a consistent framework," she explains. "We're all working with big data, and big data that is real-time. The sheer economies of scale of managing that data and using it to make comparisons across territories is incredibly important."
Other agencies are doing the same in terms of managing the data. "For a number of our global clients, we've built an infrastructure to show how individual markets perform," says Sean Muzzy, senior partner and managing director of Neo@Ogilvy, OgilvyOne's digital unit, which works with global brands including IBM Corp., American Express Co. and Kodak. "That's very important, because while there are local differences, having that data infrastructure in place enables them to get a bird's-eye view of what's happening," he says. "We've also leveraged our global network for clients to make sure we're transferring knowledge about what's happening across different regions."
The global marketer and the global consumer, with technology as the common driver, have obliterated borders. As Steve Longley, CEO of Philadelphia-based marketing firm TPG, a unit of Omnicom Group's Diversified Agency Services, puts it: "What we're seeing are brands that transcend borders, and where we find commonality is that an advocate [for a brand] is an advocate. Attitudinally, we have to identify cues that make one an advocate and tie into those and figure out how to leverage them. The simple answer is, it's all about building community."
However, despite the fact that social media and digital gadgetry have served to make the world a smaller place, Longley says it is tried-and-true traditional direct marketing that remains core to marketing programs in much of the world, notably developing markets.
"[For example] in Poland, traditional direct marketing tactics perform better than anywhere I've ever seen," he says. "When a family there gets mail, they're excited to see the coupons and discount offers. Culturally, there's a very different sensibility, and the concept of direct mail is new to much of the emerging world."
Multilingual meets multichannel
Employing efficacious direct marketing techniques in markets outside the U.S. is much the same as here at home, according to Longley: that is, the successful blending of a range of traditional and digital tactics.
"Where brands still lag and suffer is when they look at all the touchpoints too vertically," he says. "You have to look at how TV supports direct response TV, direct mail and display." Longley says despite cultural differences across markets, the same rules about integrating channels apply.
Muzzy agrees. "In the past, we might have been very siloed," he says. "Marketers might have left the hardcore direct marketing to the telemarketing or direct mail experts. But as a consumer, marketers can see me interact with them not only in those channels, but across mobile and online. It's forcing marketers to think about these things more holistically in terms of consumer touchpoints."
Marketing across borders, while a complex enterprise requiring expert knowledge of market-by-market laws, consumer preferences and cultural distinctions, can be made less so, Muzzy contends. He says it can be accomplished by simply "asking the right questions and trying to make sure that, with whatever you're putting into market or trying to communicate with your customer, you state your objectives up front, prioritize against their impact, and have a strategy in place."
Also easing the process of executing a global effort is the automation of marketing processes. OgilvyOne is partnering with client IBM Corp. on its international consolidation of marketing software company Unica, which IBM acquired in August 2010. OgilvyOne Worldwide COO Gunther Schumacher, the agency's global lead for the IBM account, calls it "the world's largest CRM implementation." Unica provides global direct marketing, database and CRM solutions for clients including Disney, General Motors Co., Reader's Digest Association (RDA) and Vodafone.
For its own direct marketing operations across some 60 countries, Reader's Digest had previously relied on a 35-year-old legacy database and outmoded software programs. To streamline the creation of more than 600 yearly campaigns around the world and reduce costs, it employed Unica's enterprise marketing management software suite and an Oracle database, cutting its annual database marketing costs by 35%.
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Unica's international presence enabled RDA "to build a standardized platform domestically that could be rolled out to our global enterprise," says Joe Devanny, RDA's director of database marketing.
Unica also enabled European telecom giant Vodafone, with 206 million mobile customers globally, to better manage customer data, automate campaign management and planning, and execute 120 consumer campaigns and 60 corporate campaigns every month through channels including telemarketing, email and SMS. It was also able to measure campaign results more accurately, according to the company.
"What we see with our clients is not just that they're using a different set of tools to create a complete transformation of the whole process of going to market, but they have much more control of what they are doing," says Schumacher. "A business can get back to making decisions based on business rules: communication with customers and analyzing data and insights. The guesswork is coming out of it much more. There's a greater opportunity to focus your strategy on the audiences you want to go after and how you nurture them along the cycle.
"People used to make judgment calls about what they should and should not implement at the segment level, the country level. It is a very arduous process with a lot of guesswork involved," Schumacher says. "Getting Unica as the underlying platform, the process becomes more transparent. You can react faster to where customers are in the purchase journey, and all of a sudden go to market in countries where you wouldn't have the bandwidth otherwise."
Meanwhile, Microsoft Corp. this year approached the digital marketing firm Metia to design, develop and maintain localized websites around the world to support the launch of its new Microsoft Dynamics CRM product. The project included the rollout of portals across 38 markets and the design and management of an email marketing program. The result was a 318% increase in trials, 254% increase in installations and 176% increase in revenue, according to the client. It's only the latest joint effort between Microsoft and Metia, which has managed global email programs for the marketer for four years.
"We traditionally have individual countries lead the marketing effort, but we had an opportunity with our financial supply chain software to centralize direct marketing efforts, including email, Web and telesales," says Nathan Warner, senior marketing manager at Microsoft. "We've rolled it out in every country in the world [in which we operate], which has led to cost savings and helped free up local marketing managers so they can focus on new customer business."
Relying on locals for expertise, while conventional wisdom, is not always the way to go, Warner says. "A lot of times, many countries and subsidiaries didn't necessarily have the resources in place for marketing efforts. It was done inconsistently," he says. "We were able to give a consistent customer experience, which helps with the overall branding and strategy in terms of providing a good customer experience."
Shopping abroadMeredith Xcelerated Marketing (MXM), a unit of women's magazine publisher Meredith Corp., formerly known as Meredith Integrated Marketing, in October announced it bought a minority stake in London-based marketing firm Iris Worldwide.
Martin Reidy, president of MXM, says that when he ran global networks at agencies such as Publicis Dialog, clients would say they wanted to be "global" but often found it difficult to actually execute their businesses on an international scale. "Within the last two years, the world has really changed, particularly in relation to the direct marketing side," he says.
Everyone points to the power of social media as having brought the global community around one big campfire. But "social" isn't just about Facebook and Twitter and their growing influence across borders, Reidy says. "It's about people's interaction with each other in general — and interaction with products. We have analysis that shows how increased discussion drives sales. There is a direct relationship. What we're seeing is all these programs coming together to get people to talk about your product. That's why email and direct mail are so important."
The acquisition of an agency such as Iris Worldwide was essential in delivering MXM clients the international reach and marketing expertise they're demanding. "Our clients were asking for it, how to expand internationally. We could potentially work with other agencies, but it was very complicated. Iris was the perfect matchup," he explains. "We liked how they thought creatively, and we're more advanced in mobile and social than Iris, so we could transfer that knowledge to them. They can work with clients on a local basis and think creatively on a local level."
Sometimes, those best practices can be fairly traditional. For example, Acxiom is helping search giant Google acquire new customers for its digital services in emerging markets such as India using the marketing firm's expertise in direct mail. The focus of another of Acxiom's clients, Hewlett-Packard Development Co., is customer loyalty and the establishment of a customer preference center that encompasses consumers across more than 100 countries. Suther discovered that e-commerce in China relies heavily on the cash-on-delivery (c.o.d.) model, akin to the old c.o.d. method once so popular in the U.S.
"I started my career in direct mail and then sat through developments in display and search and email, and I always try to step back and not try to reinvent things we've learned in those other places," says Muzzy. "From an analytics standpoint or a direct marketing standpoint, there's still a lot of truth in and belief in the best practices that have been used for a while now."
Still others choose to see the uncharted wilderness out there as an adventure. "The first pioneers, you could describe them as having to fight the cold and wild animals and figure out how to cross the great divide — but you could also say they didn't have to worry about traffic and trucks pushing them off the road or falling asleep at the wheel," says Schumacher. "There are different hazards, and the world is always going to be open for people who want to go and explore. Global marketers are explorers. If you have that mentality, there's more opportunity than ever."