The Evolution of Marketing

Like the plate tectonics that reframe the earth’s topography, recent shifts in the marketing sphere are dramatic and permanent. According to Winterberry Group, U.S. ad spend grew 4.3% from 2011 to 2012; the bulk of that growth came in the form of digital ad spend (e.g., mobile, email, search), which increased 14.9% in 2012, while “measured media” spend (e.g., TV, outdoor, print, radio) grew only 1.5%. Winterberry expects 2013 growth to be similar, predicting a 19% increase in digital advertising, but only 0.4% growth for measured media.

This shift reflects in part marketers’ reactions to changes in customer behavior and preferences, as more consumers look to online and mobile as key brand touchpoints, desire a seamless experience regardless of channel, and expect real interaction with their preferred brands. These changes have also spurred an increasing interest among marketers in mastering omnichannel marketing and bolstering customer engagement.

Fortunately, marketers aren’t alone in adapting to these changes. Their agency partners are transforming their businesses, as well. Fifteen agency leaders share their views on marketing’s evolution and how the role of the agency is and should be changing to support their marketer clients and meet the demands of today’s exacting customers.

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Zihla Salinas, CMO, RAPP

The biggest change we’ve seen is an increased emphasis on the customer experience. In 2012 three out of every four organizations told Forrester Research that their goal was to “differentiate on the basis of customer experience.” But in real life most brands were ranked as “OK” or “poor” in Forrester’s 2012 customer experience index. Only 3% were ranked as “excellent”—punctuating a sharp decline that started in 2007 and is now at an all-time low. Brands are now recognizing the need to extend their focus beyond cross-medium advertising, digital included, and take a hard look at the experiences they’re delivering to customers. At the same time, customers are demanding more than just good products and good advertising. They’re seeking multidimensional value in the form of dynamic, technology-enabled, and culturally relevant experiences. Modern agencies need to be at the forefront of this trend by voraciously consuming technology, data, and culture to create these connected experiences that provide meaningful value beyond traditional marketing communications.

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Stewart Pearson, Vice Chairman, Chief Client Officer, Wunderman

It’s time to reinvent marketing for the way people will live tomorrow. The brands of the future aren’t being built through positioning strategy or advertising. The brands of the future anticipate [customers’] needs and behaviors, and create real-time experiences and services that connect people on their terms, as individuals and in their communities.

Consumers are ahead of marketers in adopting smartphones, social networks, and Big Data. The biggest change is their trifecta. The brands of the future will create experiences and services that are so compelling that people will share their personal data and social graphs with them through their mobile devices. Digital data means we know the customer today as a critic or creator, conversationalist or champion, and not simply as buyer.

In this reinvented marketing, customers are the power and brand. The role of the agency is to be the advocate of the customer everywhere within the client enterprise.

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Michele Fitzpatrick, Executive Vice President, Strategy and Marketing, The Agency Inside Harte-Hanks

Connected consumers and mobile platforms have driven significant evolutions in marketing. Digital marketing messages are viewed continuously and simultaneously across multiple digital and mobile platforms, in real time, and at the convenience and preference of the consumer to research, buy, use, and engage with brands. The result is the rapid convergence of multiple agency disciplines, a transformation to an organically integrated model across four disciplines: brand, direct response, database, and digital. The goal is to meet the connected consumer wherever and whenever he or she interacts with the brand, and it all comes together in new forms of analytics and strategic insights. Consumer insights gained in one channel now inform marketing decisions for all touchpoints in terms of content, preferences, cadences, etc. Brands and their agencies that “get” the connected consumer concept, and act on it in smart ways, will win. Those who don’t, well, they’ll be left behind.

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Brian Fetherstonhaugh, Chairman and CEO, OgilvyOne Worldwide

Data is the engine driving the transformation of the direct marketing landscape. Every day consumers are communicating with us via digital body language in the form of data about their intentions and preferences. By skillfully reading these insights and marrying them with big, creative ideas, we can orchestrate personalized and relevant interactions at every touchpoint. The goal is to create compelling experiences that win more customers and make them more valuable.

Data also is fueling the emergence of a new breed of agency. Forrester calls it the Customer Engagement Agency and defines it as agencies that “focus on defining customer-oriented business strategies. They help clients maximize customer profitability and optimize customer experiences by applying data and analytics to every interaction.”

Customer Engagement Agencies develop ideas, communications, and services that provoke or invite individuals to participate. They provide a personalized customer experience with the brand, increase customer value, and have the potential to build long-term relationships. They are relentlessly focused on value creation at each engagement point with the customer. They are the future.

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Mark Taylor, COO, Rosetta

The way consumers interact with brands, and ultimately buy, has changed and is constantly evolving. This transformation is powered by three enabling dimensions: technology, data availability, and social behavior (the channel of Me and the channel of Us). As a result, an emerging set of agencies focused on customer engagement has started to define itself on the agency landscape.

These up-and-coming agencies feature a new balance across four pillars of capability: customer insight and strategy, enterprise grade technology skills, creative, and measurement. And isn’t measurement the highest form of customer intimacy?

Marrying each of these skills together creates a different kind of value for agency clients—value based on customer-centric marketing. We call it Personalized Lifecycle Management. In 2013 we expect more than 75% of Rosetta’s revenues to come from customer engagement initiatives. We believe that the agency landscape has changed for good.

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Ashley Johnston, SVP, Global Marketing, Experian Marketing Services

We’re experiencing a sea change in marketing as consumers become more hyper-connected and empowered through social media, and as enabling technologies like tablets and more powerful smartphones continue to proliferate. Marketers must understand that the traditional path to purchase is no longer driven by preference, but rather by convenience. Take the working mom, who had planned to shop in-store for her six-year-old’s birthday gift, but whose flight was delayed. Instead she’ll research gifts on her tablet at the airport then purchase from her smartphone when she lands.

Brands must understand this new paradigm and find ways to engage their customers across channels with consistent messages and experiences that enchant and delight them. I call it “the cross-channel imperative,” and it means connecting with customers through data and insights, engaging them with the right message and through the right channel, and inspiring them by giving them what they want when they want it. Do those three things and you’ll demonstrate true customer obsession.

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Michael Mclaren, President, MRM

There are profound changes sweeping the marketing landscape. With rapidly evolving IT and data capabilities, companies are using advanced technologies to drive maximum value from existing customers and are scouring the marketplace to attract new customers and find new pockets of growth opportunities.

The convergence of IT technology in the service of marketing execution is a steady and pervasive trend.

Even with all this technological advancement, it’s clear that the key to success lies in customer relevance and engagement. The more we know about our customer—their habits, preferences, consumption of media, sources of information, key influencers, and more—the better we can create customized “offers” that are highly relevant and valuable to them.

In doing so we’re creating an experience that customers (and prospects) will value above all others. Developing this deep understanding of the customer—and having the capability to aggregate and structure this information so it can be effectively mined—is the key to modern, data-enabled marketing. We believe this superior customer experience management provides marketing organizations with a true source of competitive advantage.

 

Tim Suther, CMO, Acxiom

More than $500 billion in advertising is spent globally—most of it mistimed, misplaced, and mismessaged. Today, nearly 40% of advertising dollars are wasted, up from 37% five years ago. Worse yet, untold amounts of consumers’ time and mental energy are also wasted in the process. The source of the problem is largely found in the “disconnects” of marketing: online disconnected from offline, advertisers’ data disconnected from their media partners, and awareness campaigns disconnected from performance marketing.

Those who embrace connected marketing are turning information into insights, insights into action, and action into advantage. They’re not just gaining the lead over competitors, they’re dominating. In fact, five of the 10 most valuable companies in the world treat data as an enterprise asset, using it as a central means of creating value. Better connected marketing links people to products, products to brands, and brands to life.

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Steve Dapper, CEO, hawkeye worldwide

This is the era of hyper-connectivity. Today the nexus of social, mobile, and real-time data is not only redefining marketing, it’s also transforming life itself. This is a period where brand experiences matter more than ever before.

Today it’s incumbent on agencies to create differentiated brand experiences that provide enhanced utility and service, and deliver more personalized messaging. All marketing now must amplify the core benefits of brands in more unique ways. This always was and always will be our focus, but now we must be far more relevant to those consumers we want to entice and serve.

Ultimately, it’s about smart, motivating, passionate, informative experiences that leverage data and are delivered across an increasing array of communication and experiential possibilities. To win, brands must create extraordinary experiences. And in my experience, I would say that marketing and advertising have never been more exciting.

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Liz Deutch, EVP, Global Director of Customer Engagement, Draftfcb

There’s been a paradigm shift in how consumers seek out information, how they shop, and how they relate to brands. The dynamic movement of emerging technology continues to give people more accessibility and more empowerment. This, ultimately, changes how we must communicate.

Mobile, for example, presents a critical shift in how consumers and brands conduct business. It changes the marketing experience and the shopping journey, because it connects users to the world and often is their primary screen. Draftfcb recently conducted a global research study on mobile shopping and found that it’s truly a prevalent and cultural force: 81% of respondents say that mobile phones allow them to shop wherever, whenever; 78% say their mobile phones are useful for getting second opinions. Mobile is the medium. It doesn’t change our role as marketers, but it does change how we go about engaging people.

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Andrew Bailey, Chairman, Proximity North America

“Every day, we create 2.5 quintillion bytes of data; so much that 90% of data in the world today has been created in the last two years alone.” This is a quote from a recent IBM report on Big Data—the topic du jour at every marketing conference. It’s in every trade publication, and it’s difficult to leave a client meeting without talking about it. In an increasingly complex world, marketers are looking for that golden needle in an ever-growing haystack that will drive business results.

The problem and opportunity is this: It’s not about Big Data. It’s about big purpose, and the right data. The focus should be on identifying the business objective—the big purpose—and then finding historical misfires and amplifying successes. Small insights simply are not impactful enough. The idea of mining Big Data for nuggets doesn’t move the bar far enough. It’s a fundamental error to assume that Big Data will discover something so huge that has been completely missed by everyone. It’s just not reality for most marketers. Once the big purpose is clear, it’s about getting the right data—the data that lets us make decisions to move the business.

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Craig Dempster, EVP, CMO and Customer Experience Group Leader, Merkle

The biggest change reflects the transformation of business strategies from product/channel/media-centric to customer-centric approaches. Organizations today look to their agency partners to mirror that initiative; shifting their focus to activating brands at the segment or individual level and becoming true builders of customer relationships that drive business performance. The intersection of customer relationship marketing, digital, and Big Data has resulted in an unprecedented ability to provide individually targeted, personalized customer interactions. Technology and data enable today’s agencies to center their efforts on creating meaningful, performance-driven experiences that resonate with customers at the varying points of online and offline interaction.

One key trend that supports this point of view is increased spending on individual-level targeting platforms like Facebook and display ad exchanges. Another is increased investment in data-driven technologies and tactics, such as: enterprise data management platforms that integrate on- and offline data across the organization to enable individualized experiences; enterprise-wide segmentation strategies; personalization enablement technologies across channels and media; and segment-based, cross-channel media measurement and attribution capabilities.

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Zain Raj, CEO, Epsilon Agency Services

We’ve entered a new world of marketing—one with more complexity and change, even bigger amounts of data, constantly evolving technologies, continued fragmentation of channels and touchpoints, and unbelievably demanding consumers with constantly escalating expectations. This evolution has created a need for a new marketing model; one that isn’t just dependent on maximizing ROI of discrete programs, but is also about delivering sustainable business growth while enhancing brand value. At Epsilon, we call this ROE2.

By delivering powerful experiences that drive deep engagement [marketers can] deliver improved return on brand and business equity. As an example, more than 800 million people watch over three billion hours of video each month on YouTube, making it the destination for brands to drive experience and engagement. Brands like Blendtec have become huge successes with this model. This is the imperative of the future. Get on board.

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Dennis Kooker, President and COO, Customer Engagement, KBM Group

Marketing today is customer, not campaign, driven. Our clients realize that consumers engage with brands across channels and want a seamless, individualized brand experience. Recent client reviews indicate that about 65% have increased channel integration for marketing programs in the past year. Engagement is also becoming more bidirectional, as the reviews showed that about 30% have increased the measurement of customer-initiated channels.

To engage on the consumer’s terms, companies are beginning to coordinate data, insights, and marketing activities across company operations and channels to create a holistic view of and engagement with each customer. An external partner plays a valuable role [in doing so] as an objective consultant, bringing disparate client groups together across an organization in the service of customer engagement.

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Neal Boornazian, President, Wilde Agency

Marketing changes constantly. But as always, all that matters is how people react. The results. Agencies have always focused on encoding communications—and making core components (targeting, timing, message, offer, channel) right. But today that’s not enough. [Marketers] must also focus on how people decode our messages.

Customers rely on shortcuts to decision making. And, these behaviors—while unknown to us consciously—can be triggered. So, today marketers must transcend best practices to leverage appropriate decision triggers; they should use what social scientists and behavioral economists have proven about how people make decisions…to ensure that messages are engaged with and acted upon.

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