Turn on your television this time of year and chances are good you’ll stumble onto Charles Dickens’ “A Christmas Carol.”
Believe it or not, that got us thinking about marketing, and how Dickens’ ghosts provide a good frame for looking at marketing’s role 12 years into the 21st century.
Not that we’re comparing marketers to Scrooge, but the allegory of a crossroads fits well with where marketing is today.
Dickens used the Ghosts of Christmas Past, Present and Future as a cautionary tale to show how the past informs the present and how, with foresight, one can have the opportunity to sow the seeds for a brighter future. For marketers, the narrative differs but the same moral applies.
The Marketing Ghost of Christmas Past would not have to travel too far back to find a time when companies depended on marketing to drive growth and marketing relied on creative to deliver it. Ad-men, the good ones, were viewed as shamans.
Remember “Plop plop, fizz fizz” and “B-O-L-O-G-N-A?” Who else could get you singing about antacid or deli meat? Those jingles made Alka-Seltzer and Oscar Mayer household names and every company wanted a piece of that kind of marketing magic.
For those of us in marketing back in the ’80s and ’90s, the formula was simpler: big campaigns (The Pepsi Challenge) across one or two marketing channels like TV or radio, in a predictable media landscape (three television networks), with similarly reliable audiences.
As the ad business went, so did marketing, and industries beyond consumer products rushed to build out marketing departments. Unlike say M&A or operations, marketing and creative were considered more subjective and less measurable – yet critically important. But so long as people were buying, absolute precision wasn’t quite so critical.
Enter the Ghost of Christmas Present. If this ghost were to take today’s marketing executive to spy on C-suite conversations, that marketing chief might not like what s/he heard. Today, marketers spend a total of $1 trillion per year, or between 1-2 per cent of global GDP.
But where that money goes and the returns it receives are often open questions, ones the C-suite are increasingly pressing marketers to answer. Many are unable to do so. That’s because nearly two-thirds (62.8 per cent) of marketing projects fail to use marketing analytics to inform decisions and 57 per cent of CMOs don’t use ROI analysis to shape their marketing budgets .
To be fair, the environment has changed radically. Organic growth has slowed; competitive intensity has increased; marketing channels have proliferated, and the new digital/social world has completely reshaped the consumer landscape.
But as budgets come under greater scrutiny and marketing programs struggle to show bang for the buck, the marketing function’s reputation has begun to erode. One study found that 72% of CEO’s say marketers are always asking for more money, but can rarely explain how much incremental business this money will generate.
This lack of data-driven analysis makes it hard to assess what marketing delivers to the health of the business. Sure, that blockbuster ad may have been seen by 10 million people and generated gazillions of on-line comments, but what was the conversion rate to sales – both short term and long term?
Remember, though, that Dickens’ ghosts don’t just highlight problems; they suggest solutions. While digital has complicated marketing’s job, it has also created an array of opportunities.
The volume of data that digital delivers can help marketers better understand their customers, connect directly with them, and engage them across a host of powerful touch points.
Cue the fog and the Ghost of Christmas Future. Left unchecked, marketing could see itself shunted aside, with smaller budgets to work on communications or media buys. But we see an opportunity to shape a very different and exciting future.
We see marketers armed with big data and advanced analytics that demonstrate the value across all their spending – from TV to digital to sponsorship. And when they discover something doesn’t pay out, they reallocate the money to something else that does work, or return the dollars to the bottom line.
We see a marketing function that not only proves the value of what it does, but one that provides powerful consumer insights to the rest of the organisation. And we see CMOs re-emerging as the rightful owners of the growth agenda.
That’s because analytics are now at a point where marketers can account for almost every dollar spent and can better direct that spending where it does the most good. One large insurance company, for instance, increased demand generation across all channels by 15 per cent/yr from 2009 to 2012 even as budgets stayed flat. And they’re not alone.
Our experience shows that improved analytics results in an average savings of 10-20 per cent. Applied to a global spend of $1 trillion, and we’re talking $100-$200 billion in global reinvestment potential. Imagine how a CFO would react if their CMO came in with all the metrics to show the equivalent return on investment?
In this vision of the future, marketing isn’t just about driving ad campaigns but first and foremost about driving business value. To make it happen, marketers need to harness analytics to measure performance and guide decisions that drive real growth.
Not even Scrooge could say Bah Humbug about that.
 According to a CMOSurvey and the 2012 BRITE/NYAMA survey, respectively.