The past 2 years have rewritten the relationship between marketing spending and revenue generation. Much like human relationships, brands’ relationships with consumers also get tested in times of stress
The buzz in some Business and Marketing circles is that 2023 will be the first normal year after the disruption of the past few years. In my opinion, nothing could be farther from the truth. A perfect storm is brewing and few marketing organizations are primed to come out stronger on the other side.
So here are a few important questions for CMOs to ask themselves as they evaluate their Marketing readiness for 2023:
1. Do I know the new relationship between my Marketing inputs and Brand Sales?
The past 2 years have rewritten the relationship between marketing spending and revenue generation. Much like human relationships, brands’ relationships with consumers also get tested in times of stress. And whatever the outcome, there tend to be a few surprises. Here are a few observations:
Large Brands were spending too much:
Many established brands came out of the pandemic realizing that they had been spending at more than required levels in the past i.e reduced pandemic spending did not hurt sales. There have been good reasons for historical levels of high spend: Data driven marketing, marketing mix models, media inflation, media fragmentation, competitive activity etc. Then there’s also the organizational truth that no one ever saw an ambitious CMO ask for a lower budget. The fact is that large brands have momentum that can survive long periods of low/no spending. What is that new level for your brand?
Unknown Brands got accepted overnight:
Brand building has never been more modular as it is today. Find a proposition, outsource product, outsource production, outsource distribution and logistics, in-house packaging design and marketing. The past two years accelerated this model and leveled the playing field for new players. The growth of strong microbrands in the watch industry is a great example of this modular business model at work. It has been even easier in household and personal consumer goods. If new entrants can work with so little, what can I learn for my brand?
2. What is Digital marketing really doing for my business?
Questioning the value of digital marketing is heresy in many marketing organizations. Only the strong of heart have the discipline to question each element of the marketing mix objectively, and ask the tough question: what have you done for my business lately?
Marketing does not mean only Digital Marketing:
Battalions of young marketers and younger at heart CMOs of established brands embrace digital without question. Yes, digital can work wonders for middle and lower funnel challenges (educating and selling) and that is precisely the reason that new entrants are able to build a business so fast. But large, mass reach is still critical for big brands selling to hundreds of millions of consumers every month. A digital-only approach for brand building at scale is an unsolved challenge. It’s no surprise that some of the biggest spending on mass reach advertising vehicles (Superbowl, IPL anyone?) comes from new, digital/tech brands looking to generate rapid awareness at scale.Also read: How has marketing changed over the past half-century?
Digital Marketing Sugar vs Protein
Lower funnel, performance driven digital marketing is great as long as you keep spending. Much like sugar, you stop and you need to feed it again. What is the protein part of your Digital marketing plan that can build and sustain salience, as well as revenue? Content driven digital marketing and commerce have rapidly emerged as full funnel digital marketing options.
3. Does all of my C-Suite understand marketing in the same way?
The dramatic consumer fragmentation over the past few years has resulted in an equally large go-to-market challenge. Fragmented consumer bases have wider access and choice when it comes to brands; and they are exponentially harder for marketers to reach.
CMOs have an equally important internal challenge
It is a hard enough challenge to address the external world of fragmented consumers and build the business. Today’s CMO faces the additional complexity of working with many more agency partners and getting relevant internal stakeholders, each with their own unique take on marketing, on the same page. What are you doing to get everyone to understand the same marketing language relevant to today’s fragmented consumer?Gautam Kiyawat is Professor of Management Practice at ESSEC Asia Pacific
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