Marketing is in flux but is by no means dead
Marketers and brands are facing unprecedented challenges as the digital economy continues to disrupt the way we engage with consumers.
In Asia-Pacific there’s an opportunity for marketers to leverage data to secure long-term customer relationships. The diversity of the region is another factor that increases the need for Asia-Pacific chief marketing officers (CMOs) to ensure they deliver a consistent brand story that targets the right audiences.
This has strong potential to transform marketing’s role as the architect of a business’ long-term vision. There has never been a more exciting time to be a marketer. Digital technologies may be arming marketers with new tools to deliver their strategy, but it is the deeper shift towards a digital economy that demands a more fundamental resetting of a brand’s long-term strategy than many appreciate.
To help understand how brands can win in a digital economy, Dan Aegis Network, a leading communications and media company made up of 10 global network brands, conducted a major global survey of 1,000 CMOs and senior-level marketers from across 10 markets and across industry sectors. The study revealed that marketing investment is on an upward curve, as marketing’s role as the primary “growth antennae” for organizations is strengthened using data. CMOs are in a unique position to turn consumer insight into the next commercial opportunity and new sources of revenue.
The CMO Survey 2018 revealed these significant findings:
Marketing is in fluidity, but continues to fight. Most CMOs expect their budgets to increase over the next 12 months. But the composition of that spend is changing. Those able to adapt quickly enough to the realities of the digital economy will be the winners.
2018 has generated plenty of gloomy headlines for marketers within global brands. It seems like marketers and brands are facing unprecedented challenges as the digital economy continues to disrupt the way we engage with consumers.
Many commentators have judged that the traditional marketing funnel is fundamentally broken — at both ends. There are doubts about the effectiveness of advertising mediated through digital media platforms and even questions about many of the assumptions by which marketers have navigated for many years.
High-profile consumer packaged goods companies are radically pulling back how much they spend on ads. Big-name consumer goods brands have made public their commitments to cut marketing spend in response to slowing market growth, increased competition and investor pressure.
Six out of 10 marketers globally expect marketing budgets to rise in the next 12 months. However, it is the marketing budget increases among larger corporations that stand out, with 43 percent of respondents planning for increases of five percent or more, and just one in 20 expecting to see budgets fall. Confidence is highest among technology, automotive and financial-services CMOs.
Globally, marketing spend is expected to increase across most markets and industry verticals. Technology CMOs are mostly likely to be increasing their budgets; food & beverage and automotive CMOs are most likely to be cutting their budgets.
Digital trends are disrupting marketing. There has been much debate in recent years about the impact of the digital economy on marketing. Some commentators accuse brands of embracing digital for digital’s sake. Others suggest that brands have not embraced digital enough.
Vital technologies have helped erode barriers to entry and create the conditions of near-perfect competition between producers and consumers. In this demand-led economy, growth is emerging from unexpected quarters as brands step out of their traditional industry. For example, technology companies such as Apple, Google and Uber are now making forays into the healthcare industry. In that context, it is perhaps not surprising that CMOs see the primary role of marketing as being about growing the business. After all, this has always been its main objective. But, in recent years, many brands have perhaps become distracted from this mission by the rise of multiple digital tools and online marketplaces.
As a result, many brands have since appointed “chief growth officers” to join the C-suite. They are either alongside or there instead of the CMO to ensure that this critical role does not get lost in the noise and complexity of the digital era. As competition intensifies, the role of marketers as the growth antennae of their organizations will only gain in importance. However, not all CMOs agree. For example, in the telco sector, CMOs see the main role of marketing as developing the overall customer experience, with business growth someway down the pecking order.
Innovation ranks at the bottom in terms of being identified as a key marketing role. This puts the ability to meet the demands of the digital economy at risk. However, a significant number of CMOs in China (63 percent) and Australia (56 percent) see marketing’s primary role as developing the overall customer experience. CMOs are facing significant challenges as they attempt to balance the opportunity to build new capabilities and enhance their role, with the risks and challenges driven by data and the digital economy.
Data unlocks new growth opportunities. The volume and precision of consumer data continues to grow. But the ability to draw actionable insight from that data is what really makes the difference. It enables brands to build up a more accurate picture of consumers and helps them meet consumer needs more effectively.
With the increasing volume and sophistication of data-led marketing solutions comes a downside risk. Headlines over the last year have been full of stories of data breaches and use of customer data in ways that have unnerved customers and policymakers alike. Data may be the big marketing opportunity of our times, but the strategic risk that concerns marketers most, by some margin, is a data breach or misuse of consumer data.
Investment is expected to rise, but the survey reveals changing priorities. This reflects the increased focus data as an enabler of growth. Investment in digital media, in-housing of marketing capability and a growing role for specialists are all high on the investment agenda.
How can brands create these perfect moments of marketing? Five ingredients stand out in the survey:
1. Create experiences. Creating ideas and campaigns that connect emotionally and endure will be critical if brands are to attract consumers to them, rather than pushing more traditional messaging to them.
2. Target real people. The use of data to target real people rather than proxies will be important in maximizing the value of consumer relationships. Adapting to a fluid regulatory environment and flexing capability across people-based, device and panel data will be key.
3. Rethink media. The definition of media is changing and has moved beyond distribution channels alone. CMOs also choose to define it more broadly across technology, content, distribution channels and data. Each of these provides a potential source of consumer insight and a more holistic way of using media to reset strategy.
4. Close the brand commerce gap. Maximizing the potential value of consumer engagement requires brands to ensure that each point of interaction can potentially result in a sale.
5. Embrace authentic brand purpose. Connecting brands to social impacts was an important way to engage consumers. As younger generations take an active interest in the social and ethical performance of brands in their decision-making, this capability will only increase in importance.
Arvind Sethumadhavan, chief strategy and innovation officer at Dentsu Aegis Network Asia Pacific, said, “There’s a clear shift, as senior marketers adapt to a digital economy characterized by customer-led demand and an appetite for delivering a superior customer experience for their businesses. CMOs are aware of the need to embrace digital transformation that orientates around a deep understanding of customers to deliver business growth.”
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