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Published: November 30, 2004

 
 

Making the Perfect Marketer

A study from the Association of National Advertisers and Booz Allen Hamilton suggests five ways to make marketing more relevant than ever.

Illustration by Bob Goldstrom
It is no secret that marketing organizations are under pressure. Chief executive officers are "growing impatient with marketing," wrote distinguished Northwestern University professor Philip Kotler earlier this year. "They feel that they get accountability for their investments in finance, production, information technology, even purchasing, but don't know what their marketing spending is achieving."

His colleague, Don E. Schultz of Northwestern's Medill School of Journalism, is even more severe. "The marketing function is being pushed lower and lower in the corporate hierarchy," Professor Schultz wrote in 2003.

To investigate the truth behind these assertions, the Association of National Advertisers, the leading U.S. marketing trade organization, partnered with the global strategy and technology consulting firm Booz Allen Hamilton to discover whether marketing is in fact disconnected from companies' leadership agendas, to determine the causes of any dysfunction, and to uncover the best practices of superior marketing organizations.

After analyzing the results of an online survey of 370 marketing and nonmarketing executives at more than 100 companies in nine industries, which was supported by in-depth interviews with marketers across multiple industries, the research team arrived at a surprising conclusion: Contrary to the prevailing wisdom, the marketing function is more important now than ever before. But marketers, the men and women charged with running and operating the function in product and service industries, are having a hard time keeping up.

Specifically, the study -- the first part of an anticipated two-phase inquiry into structure, competencies, value, and accountability in contemporary marketing organizations -- identified three dichotomies hindering the effectiveness of marketing organizations:

  1. More than 75 percent of marketers and nonmarketers say that marketing has become more important to their companies during the past five years. But at more than half of all companies, marketing and the CEO agenda are not aligned.
  2. Higher expectations for marketing have driven nearly 70 percent of all companies to reorganize their marketing departments during the same period. But a major component of many such reorganizations, the position of chief marketing officer, remains ill-defined.
  3. Measurable outcomes are now expected for marketing programs -- 66 percent of executives say true ROI analytics are marketing's greatest need. But most companies are still using surrogate metrics, such as awareness, instead of ROI measurements.

Fragmentation Follies
Today's marketing quandary stands in stark contrast to the 1950s and '60s, the era when the modern marketing organization was born, and when many of its current leaders grew up. For the most part, it was an "Ozzie and Harriet" world of intact nuclear families moving into new homes in expanding suburbs. Everybody read Life or the Saturday Evening Post, took an a.m. and p.m. newspaper, watched the Big Three television networks, gleefully greeted the latest fast-food restaurants, and washed clothes with the same brand-name detergents.

Around 1980, this cozy, centralized conformity began to shatter. The second oil embargo ushered in a severe recession -- and the recognition that economic growth had become punctuated and inconsistent. The birth of CNN heralded the rise of cable television and the continuing technologically induced fragmentation of media, markets, and consumer attention. The Iranian hostage crisis forced Americans -- and the rest of the world -- to confront globalization firsthand.

Today, all businesses are grappling with the problems posed by continual, discontinuous change. Globalization, the Internet, and rising information transparency have led to an increasingly mobile work force, fickle customers, and disruptive technologies and business models, which make firms less able to predict, let alone control, the near-term shape of their markets.

Few functional areas have been hit as hard as marketing. Across sectors, customers are able to demand and receive progressively more customized goods and services. Meeting such demands, in turn, has boosted companies' complexity and cost of doing business, and put pressure on marketers, in particular, to understand customer needs, seek real profits from each segment, and measure outcomes. In the face of growing customer choice and market transparency, the shift in marketing's emphases has been profound:

 
 
 
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Resources

  1. “The Customer-Centric Organization: From Pushing Products to Winning Customers,” Booz Allen Hamilton, August 2004; Click here. 
  2. Leslie H. Moeller, Sharat K. Mathur, and Randall Rothenberg, “The Better Half: The Artful Science of ROI Marketing,” s+b, Spring 2003; Click here.
  3. Gary Neilson, Bruce A. Pasternack, and Decio Mendes, “The Four Bases of Organizational DNA,” s+b, Winter 2003; Click here.
  4. Kenneth C. Bator, “Why Marketing Should Report to the CEO,” ABA Bank Marketing, Jan.–Feb. 2004, Click here. 
  5. Philip Kotler, “Marketing and the CEO: Why CEOs Are Fed Up with Marketing,” Strategy, May 3, 2004
  6. Don E. Schultz, “Marketing Gets No Respect in the Boardroom,” Marketing News, November 24, 2003