Reinventing the Marketing Organization: Five Critical Components
Faced with increasing demand for accountability and greater pressure from a changing media landscape, marketers are being asked by senior management as never before to address organizational issues: Is your marketing organization set up for success? Are you aligned with key stakeholders across the business? Can your organization provide the nimble response you’ll need to be able to manage your marketing investment?
Yet a recent survey conducted by Forrester Research and my company, Marketing Management Analytics (MMA), for the Association of National Advertisers (ANA) showed that many marketers are coming up short when it comes to answering those questions. Of 135 senior marketers surveyed, only one in three said that they built their marketing plans based on knowledge of the spend required to meet corporate goals. Only 20% were satisfied with their ability to define, measure, and take action on ROI for marketing tactics. Stunningly, a mere 13% were confident in their ability to forecast the sales impact of their marketing programs.
A lot of the problem can be explained in how marketing organizations are structured and how they manage. Jim Nail, previously principal analyst of Forrester Research and now chief marketing and strategy officer of media measurement company Cymfony, explains it this way: “Marketing organizations are still lagging behind technical capabilities they have at their disposal. They are still too focused on messaging, positioning, and channels, as important as they are, and not focused enough on what the data is telling them, what the consumer is interested in, and what the consumer responds to.”
The good news is that there are solutions to the problem. To be successful in a world where consumers have begun to take direct and active control of their “message consumption” and where the path to those consumers is highly fragmented, marketing organizations need to reinvent themselves and move away from the silos that have been built up over the years. In breaking down the barriers, they need to create cross-functional links that allow marketing to affect the entire organization.
“At the end of the day the biggest issue is the organizational impact on the decision process,” says Jim Gabriel, vice president of business strategy and insights for McNeil Consumer & Specialty Pharmaceuticals. “You need to influence the organization’s ability to bring information to bear at the time decisions are made.”
McNeil three years ago created a business strategy and insights group that includes the entire company’s research function as well as its technology marketing group and strategic planning. under the direction of Gabriel. “The idea is to provide insights that lead to action that drive growth,” says Gabriel. “We determine what the right analytics are and what the best way to take action is. The result is that we’ve turned a corner because we’re influencing decision making.”
Similarly, Kraft Foods created a special liaison role to bridge departments such as marketing and finance with what it calls a marketing analytics planning manager. Part of a hybrid team of consumer insights (CIS), marketing, finance, and sales staff, this position entails “analytically integrating plans, audiences, and any adjustments across all stakeholders including finance,” says Sudeep Haldar, senior director, global analytics and strategy. “The marketing analytics planning manager often is central to understanding the impact of historical performance of marketing levers and changes in the plans on the business.”
If, like Kraft and McNeil, you want to reinvent your marketing organization for success, there are five key concepts you need to embrace:
Alignment. Measurement in the absence of agreed-upon objectives is akin to working in an organization in which each person speaks a different language. During the alignment phase of the planning cycle, all stakeholders need to agree on the marketing objectives to be assessed and on each team member’s roles and responsibilities. The marketing planning manager then establishes the analysis plan with the internal team and an analytics supplier. “The worst thing you can do is have a supplier create a black box that no one buys into,” says Haldar. At Kraft, this cross-functional team is involved right from the start until all the deliverables have been executed.
Championship. Along with clear objectives, having a champion, particularly one who is influential with senior management, helps ensure buy-in at all levels of the organization. “Senior management needs to be able to leverage insights and forecasts derived from the analyses in the most effective way" Haldar says. “Success is achieved with the correct application and interpretation of the analyses that address key business questions. A champion helps make that happen.” A champion also helps ensure that the analytics become a standing part of the management system, rather than a periodic, perhaps sporadic, report. The champion needs to be high enough in an organization that he or she has direct influence on the majority of the stakeholders.
Visibility. The proof is in the numbers: How well is the business performing? What is the CFO getting for his or her money? Does marketing know which vehicles and campaigns are most effective? Creating a set of metrics and supporting analytics for all business stakeholders is how marketing achieves visibility–and affects the organization. “What’s important is the ‘so what’ of measurement,” says McNeil’s Gabriel. “It’s showing people within the organization the value of what works and what doesn’t work.” Having these metrics and analytics in place gives ongoing visibility into marketing program performance.
Actionability. Decisions can be made two ways in business: with data informing a decision or by the clock. It’s important to make sure that information is on hand during the “window of actionability” for each major decision point in the business process. So not only must all stakeholders agree on the metrics and analytics, they also need to agree on what action to take and how and when to act. Otherwise the information will just sit on the shelf. For example, if trade dollars are underperforming and media dollars are overperforming, an organization can’t just swap dollars. Commitments have been made that are often six months out. To ensure that action is taken, processes need to be in place so that everyone knows how all the parts interact.
Learning. Marketing organizations today are often a game of musical chairs. The brand manager leaves after 12 months and his or her replacement is starting anew. Most organizations rely on tribal knowledge and oral history for establishing lessons learned and instilling best practices. Companies need to create learning organizations where knowledge is captured and actively managed. This involves a cultural shift. At for JP Morgan Chase & Co., for example, they have created a culture where learning and risk-taking are valued. “You need to have a culture where failures are not viewed as such as long as everyone makes a valiant, intelligent effort,” says Mike Eichorst, Chase vice president of marketing analytics. “Instead failures need to be seen as learning. Otherwise everyone is just spending money on the tried and true, and you’re not responding to shifts in the marketplace.”
At the end of the day, marketers need to transform their organizations to address the new challenges if they want to truly affect a company’s decision making and bottom line. Management and shareholders are demanding it.
Ed See is the chief operating officer of Marketing Management Analytics (www.mma.com), a Wilton, CT-based analytics services provider.
