The last 2 years have changed the relationship between marketing expenditures and revenue generation. Just like human relationships, brand-consumer relationships are also tested in times of stress. Image: Shutterstock
Some in business and marketing circles say 2023 will be the first normal year after a gap of recent years. In my opinion, nothing could be further from the truth. The perfect storm is brewing and several marketing organizations are ready to go on the other side.
So here are some important questions CMOs should ask themselves when evaluating their marketing readiness for 2023:
1. Am I aware of a new link between my marketing spend and brand sales?
The last 2 years have changed the relationship between marketing expenditures and revenue generation. Just like human relationships, brand-consumer relationships are also tested in times of stress. And regardless of the outcome, there are usually surprises. Here are some observations:Big brands spend too much:
Many top brands have emerged from the pandemic knowing they had overspend in the past, meaning the spending cuts caused by the pandemic have not impacted sales. There are good reasons for historically high spending levels: data-driven marketing, marketing mix models, media inflation, media fragmentation, competitive business, and more. There's also an organizational truth: no one has ever seen an ambitious marketing director ask for a smaller budget. The point is, big brands have lasting momentum at little or no cost. What's the next level for your brand?Unknown brands received overnight:
Brand building has never been as modular as it is today. Find offers, outsourced products, outsourced production, distribution and logistics, packaging design and internal marketing. Recent years have accelerated this trend and leveled the playing field for new players. The emergence of strong micro-brands in the watch industry is a prime example of such a modular business model. In household and personal items, it's even easier. If new members can handle such low volume, what can I learn for my brand?2. What does digital marketing actually do for my business?
Questioning the value of digital marketing is heresy in many marketing organizations. Only strong-willed people have the discipline to objectively question each element of the marketing mix and ask the tough questions: What have you been doing for my business lately?Marketing means more than digital marketing:
Battalions of young marketers and energetic CMOs of top brands don't hesitate to embrace digital technology. Yes, digital can work wonders for lower and mid-channel businesses (training and sales), which is why newcomers can build a business so quickly. But high reach is still important for big brands selling to hundreds of millions of consumers every month. The digital approach to brand building at scale is an unsolved challenge. Unsurprisingly, some of the biggest mass ad spend (Superbowl, IPL, anyone?) are for emerging digital/tech brands looking to build awareness quickly at scale.See also: How has marketing changed in the last half century?
Digital Marketing: Sugar versus Protein
Lower funnels and performance-based digital marketing are great as long as you keep shopping. As with sugar, you stop and have to feed it again. What is the protein part of your digital marketing plan that can generate and sustain advertising and revenue? Content-based digital marketing and commerce have rapidly evolved into a complete digital marketing option.3. Do all of my senior management have the same marketing knowledge?
The dramatic consumer fragmentation in recent years has created an equally serious marketing problem. A fragmented consumer base has more access and choice when it comes to brands; and exponentially more difficult for marketers.The marketing director has an equally important internal task
Reaching out to the fragmented world of consumers and building a business is no easy task. The Chief Marketing Officer currently faces the added challenge of working closely with many other partnering agencies and getting relevant internal stakeholders, each with their own unique marketing vision, on the same page. What are you doing to ensure everyone understands the same marketing terms for today's fragmented consumers?Guatam Kiawat is Professor of Management Practice at ESSEC Asia Pacific.
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