â€œTraditional marketing â€” including advertising, public relations, branding and corporate communications â€” is dead. Many people in traditional marketing roles and organizations may not realize theyâ€™re operating within a dead paradigm. But they are. The evidence is clear.â€
So writes Bill Lee in theÂ Harvard Business Review, and heâ€™s probably right. We only have to look at the impact Google has had in diverting marketing and advertising dollars away from traditional media and the emphasis Facebook is now giving mobile advertising as a means of raising revenues and placating its new investors.
But even the new social media is no sure bet at getting a companyâ€™s message across effectively. Prospective purchasers, it seems, are more influenced by their peers than flashy ads, and they spend whatever time it takes to research potential buys, often through the internet, and often from sources outside the firm such as word-of-mouth, customer reviews and reviews on social networks.
Those once almighty marketing departments are now coming under increasing pressure to justify their budgets and it is not easy to quantify the success of any marketing spend in the traditional way. Up until recently, it was all about â€˜hitsâ€™ and â€˜eyeballsâ€™ viewing online ads, then it was all about â€˜likesâ€™ and sheer numbers on social networks, but there is increasing pressure for dollar results to be linked directly to marketing outlays.
In his article, Lee also scathingly states that CEOs have lost all patience. â€œIn aÂ devastating 2011 studyÂ of 600 CEOs and decision makers by the London-based Fournaise Marketing Group, 73 per cent of them said that CMOs (Chief Marketing Officers) lack business credibility and the ability to generate sufficient business growth, 72 per cent are tired of being asked for money without explaining how it will generate increased business, and 77 per cent have had it with all the talk about brand equity that canâ€™t be linked to actual firm equity or any other recognized financial metric.â€
If marketing departments were to fall under the same scrutiny and expectations that most other departments have had to in communications service providers over the past few years, we would see a dramatically different picture. Streamlining of operations, controls on capex, emphasis on agility, maximization of existing resources, business assurance tools and metrics put in place to measure their effectiveness are now commonplace across the enterprise. Is the same being done for marketing? If not, it probably will be shortly.
If traditional marketing and social marketing are no longer â€˜cutting the mustardâ€™ then what will be effective moving forward. Deep diving into social media and employing young, inexperienced but social savvy networkers is not the answer either, according toÂ Hollis Thomases at Inc.com. Lee feels that a refined form of â€˜community marketingâ€™ is called for.
Even if the internet is used to research potential purchasing decisions and social media may accelerate a buying trend, people are most likely to ask neighbors or friends â€” their peer network â€” what or whom theyâ€™re using. As Lee puts it, â€œCompanies should position their social media efforts to replicate as much as possible this community-oriented buying experience. In turn, social media firms, such as Facebook, should become expert at enabling this. They can do this by expanding the buyerâ€™s network of peers who can provide trustworthy information and advice based on their own experience with the product or service.â€
It doesnâ€™t stop there. Identifying the influencers can be extremely effective. This does not necessarily mean targeting outside influencers that have massive following online, but more about cultivating key influencers of your own customers. We are now recognizant of the power of â€˜big dataâ€™ analysis and its use in improving the customer experience, and this could be used to find and single out community influencers and give them something good to talk about.
As Lee surmises, this requires a new concept of customer value that goes way beyond customer lifetime value (CLV), which is based only on purchases. For example, how large and strategic to your firm is the customerâ€™s network? How respected is he or she?Â â€œ
Whichever way you look at it, marketing is changing and those that adapt quickly to new models that can be quantified will stay ahead of the pack. Marketing creativity has never been more necessary, despite the risk. It seems to be the CMOsâ€™ turn to take some heat.
First published at TM Forum asÂ The Insider, 14 August 2012