Now we are in the year of 2017. But the challenges for marketing professionals remain the same. Here are three usual suspects:
* More and more 90s generation (people born in 1990s) or even 95s generation have become targeted audiences/consumers. You don’t know their idols, don’t read their favourite (often online) novels, even don’t understand their slangs. They have become increasing immune to messages produced by traditional brand communications machines;
* Your company has (finally) worked out the content management work flow for brand’s WeChat accounts. Once in a while your account can have more than 100 monthly new followers. But you were just told that WeChat subscription accounts are so yesteryear channel. The new buzz is Wang Hong livestream and short video. However, you don’t know where you can get the money to try those new channels, because the budget for HTML5 hasn’t been approved yet.
* Internet video sites/apps have successfully lured young audiences away from traditional TV channels. AirBnB/Xiaozhu are revolutionizing travel accommodation sector. Didi, which merged Uber and Kuaidi in 2016, changed the landscape of taxi but is itself challenged by governments’ stricter policies and share bike apps such as Mobike and OfO. No one knows which industry will be disrupted next. Is your brand well prepared to withstand the storm? Have CEOs seen the value of your brand to weather the challenge?
What is the root cause of these issues?
As the world enters the digital/social media era, the marketing environment has changed dramatically. In-house marketing organizations, such as marketing and PR departments, have to become more proactive and adaptive. They have to go out to help shape consumers’ perspectives about the brand, even the world, to earn a fair share of whatever little attention consumers still have, so as to make sure their brands can stand out in consumers’ minds.
Being a professional brand and marketing consultancy team, Kantar Vermeer’s vision is to help clients improve their strategies on branding and marketing. Recently, we have noticed that brands have invested heavily in launching more compelling products and being more creative to attract consumers. But many of them have overlooked the fundamental flaw in the structure of their marketing organizations. This structure, invented in the industrial era, usually divides marketing teams into different silos based on their functions.
Unfortunately, this structure has already become outdated. It has made things more difficult for marketing teams to respond to the challenges they’re facing. Marketing organizations found it hard to connect brands with consumers, the very role assigned to them. In day-to-day operation, it also created problems for them to properly carry out the strategies that the CEOs have drafted.
Usually the problems appear in three areas:
1. When facing outside audiences, marketing organizations rely on numerous third-party vendors to obtain consumer insights and execute branding and marketing campaigns (even digital marketing teams rely on vendors to do most of the work). It makes perfect sense to harness the expertise and resources of third-party vendors, but if purely rely on vendors to “feed” them data and insights, brands will gradually lose the ability to sense the shifting of consumers’ needs and hence the ability to communicate with them effectively;
2. Within marketing organizations, each small teams will focus on the specific tasks assigned to them, such as media management, digital marketing, consumer insights, etc. They rarely step out of their silos to align with what other teams are doing. As a result, it’s never rare to see conflicting messages from a same brand, repeated investment and duplicated work;
3. At the company level, marketing organizations are expected only to carry out brands’ strategies and push messages to consumers in a one-way traffic. More often than not, the market feedback or insights that marketing organizations accumulated during their work were considered merely useful in external brand communications, which failed to fully unleash the value hidden in them.
Change is happening.
More brands are now thinking of how to restructure their marketing organizations to lift their abilities to match the reality again. Kantar Vermeer explained this trend in the Harvard Business Review cover article“The Ultimate Marketing Machine”. We have been following this by monitoring leading brands’ responses to embrace the digital/social media era’s challenges. Here are two increasingly obvious trends:
First, constantly improve in-house marketing organizations’ abilities to communicate directly with consumers.
In traditional brand communications pattern, in-house marketing organizations talk to consumers through various layers of intermediate agencies: obtain consumer insights, draft creative ideas and eventually push messages, etc. So in the industrial era, the definition of a powerful in-house marketing organization is based on its ability to manage and combine the expertise of outside agencies.
However, in digital/social media era, messages are created, spread and consumed in much faster paces, through many more channels and towards more fragmented audiences. This means marketing organizations have to engage end users more proactively and directly. Every link on this reaction chain – market insights, content creation, message communication and interaction with consumers – has to be online 24*7 and run at the highest gear, so that the brands’ messages will always be relevant and effective.
The extreme cases being the likes of Xiaomi, which runs a “brands as agencies” model. For most brands, a more practical approach is to build up the ability to directly communicate with consumers through the current structure, such as Unilever’s new content centres: U-Studio and U-Entertainment.
U-Studio focuses on what it calls "needs content" – content sought out by consumers that meets an immediate need related to a brand or product, according to a Campaign report.
U-Studio is joined by U-Entertainment, which is focused on "passions content" and will work to pair Unilever’s global brands with partners in the entertainment industry to create content the company will co-own, the report said.
Pepsi, Mondelez and Huawei have taken similar steps.
Secondly, enhance marketing organization’s position in company’s strategic decision making process.
In traditional marketing organization structure, each small team focuses only on their assigned task and rarely talk to each other. The same is true with the outside vendors that work with each team. Everyone works like isolated leaves on a big tree’s branches.
For example, many brands’ WeChat subscription accounts is an ideal channel to collect feedbacks from consumers, employees or partners, which are extremely valuable to other departments, such as R&D, HR and business development. However, marketing departments, whose social key performance index usually is the page views and likes of each article published, rarely forward these feedbacks to other departments.
If we can turn back the clock and go back to the time when the role of marketing organization was invented, it was meant to be the key link between company/brand and consumers. In digital/social media era, consumers have an unprecedented amount of channels to get information and are more independent in forming their opinions about brands. Marketing organizations have never been more empowered, and in a better position, like today to obtain market insights for top CEOs to draft strategies. Marketing organizations should no long remain a passive undertaker of strategies – they should be an essential member of a company’s strategic making body.
To adapt to the digital/social media era, marketing organizations should also largely improve their internal and external cooperation to work more proactively and nimbly to both advance companies’ agenda as well as serve consumers’ daily needs.
Leading companies, such as Unilever, Nike, Coca-Cola and Haier, have set up cross-department “centres of excellence” to share resources and encourage horizontal cooperation. They tap inside and outside talents to staff short-term task forces for specific initiatives around certain projects. CMOs and other marketing leaders increasingly operate as orchestrators.
To summarize, digital/social media era has forced marketing organizations to reinvent their role between brands and consumers as well as within companies. Winning companies are continuously upgrading the working pattern of their marketing organizations: not just to improve their efficiency but also expand their influence: externally to directly talk to end consumers on their mobile phone screens or social news feeds and internally to closely advise CEOs in boardrooms. As a result, we can see more CMOs have become the second most powerful executive under CEO, such as ex-chief brand officer of McDonald’s Steve Easterbrook and ex Vice President Marketing of Mercedes Benz USA Stephen Cannon (both have moved on to become CEOs).
By creating closer and more direct links with end consumers and participating in drafting company business strategies, winning marketing organizations are actively creating a brighter future for their brands. Maybe digital/social media era is a hotbed for challenges, but is it at the same time creating more opportunities for visionary marketing organizations and their leaders?