Marketing Management 2017 : Keep Your Eyes on the Big Picture


Big picture marketing management

When we set out to write The Marketing Director’s Handbook our aim was to advance marketing management. The challenge has not diminished. It has increased. The digital revolution and associated media diversification adds extra complexity in managing search and social media. But in the rush to embrace digital opportunities, marketers have a choice to keep or lose their heads. In this article we look at some of the key dynamics and success factors for the year ahead. As we are marketers we must start with customers.

Rising digital media consumption fuels online sales

Around the world online access continues to grow. In the UK, 78% homes now have broadband access (1). Some 81% have mobile phones, and some 77% (and rising) (i.e 62% of the total) have smartphones (2). Faster broadband speeds, and increasing availability of 4G, mean more consumers spend more time online. Both in the home, multi-tasking and on the go. In the UK, consumers spend over 4.45 hours/day using digital devices. In 2017, this figure will exceed combined tv, radio and print consumption (3). As a result, online shopping is growing; rising from 15.4% of retail sales in 2015 to 16.8% in 2016. And with no sign of slowing (4). UK consumers spend on average £1760 each online – more per capita, than consumers in any other country in the world.

Internet/online continues to grow share of advertising spend

Globally online advertising spend is neck and neck with tv, with each accounting for 33% and 34% ad sales (5). Though in the UK online is dominant with over 43% share (6). Looking at Google, their share of online ad spend dwarfs all others. Google’s 2016 ad sales in 2016 grew 18% y/y though this masks an increase in clicks of c. 40% less a reduction in cost/click of c. 13% (7) (Figure 1).

The trouble with online advertising

Google remains the elephant in the corner and Bing/Yahoo, and others, relative small fry. Most online advertising is relegated to a few key words. With Google, their algorithms decide what is seen, when, by whom and how much is paid for a few words. Further, an advertising keyword ‘quality score’ bears no relation to the natural search term ranking, and Google and others are unable or unwilling to explain how this works.

Elephant in the corner - Google
Elephant in the corner

While online advertising innovation continues apace new initiatives need careful assessment. Extended advertising text presents an opportunity say more, and while early movers report click-through rates up by 20%, the advantage may be neutralised once all use extended text. Google’s ‘dynamically generated headlines’ are another innovation though only careful reading of the small print reveals both ads and keywords are automatically generated based on the content of your landing page. What Google omit to say is that keyword settings are over-ruled, effectively removing all control from the advertiser.

Google Analytics innovations also continue apace. There are now more data than ever to analyse website and advertising performance. Though key data remains missing. Many searches are omitted as are details on the searchers (customers). An entire search engine marketing and optimisation industry has grown-up second guessing Google and trying to analyse the data despite the significant gaps. Planning and management of digital advertising remains shrouded in ‘fog’ and obfuscation appears self-serving.

The advertiser has to make sense of it all

The last couple of decades have seen a continued rise of digital agencies and separation of functions; from media buying, planning, creativity, sales promotion, and a plethora of digital specialisms. Media is often planned and bought separately. It is usually managed in silos. As a result, few see, measure and manage the ‘big picture’. Agency heaven takes some finding and the buck stops with the advertiser who has to make sense of it all.

New media opportunities

Looking to the future, ever faster download speeds, and more powerful technology and devices, continue to fuel media consumption. Both in real-time and time-shift at home and on-the-go. Online search/social media advertising, though mainly display, grew 20% in 2016 (Figure 1) (7). We estimate 2017 growth at a slightly slower pace (8). Video offers more opportunities than plain words to build brands, and a growing range of media offer video advertising. You Tube raised over $5bn from video advertising in 2016 (c. 7% Google total), Facebook/Instagram projects $4bn video advertising revenue in 2017 and Snapchat nearly $1m. We estimate that video advertising will account for over 10% online advertising spend in 2017.

Global search and social media advertising spend 2015-2017
Global search and social media advertising spend 2015-2017

While traditional media has been dented by the growth in online display and video advertising, opportunities abound to buy wisely in both traditional and new online media markets. But there is also a need to see and think clearly to avoid traps set for the unwary. The savvy marketer will not go far wrong by developing and running creative campaigns via ‘reasonably high’ impact media offering ‘good value’ cost per thousand (CPT) impacts.

 Marketing Inspiration

1. Customers are increasingly busy and time-poor. They wish to make best use of precious moments. Digital devices offer speed and convenience to live life on the go. Also access to extra value in the online world. Build these insights into your product and marketing strategies.

2. Building enduring brands seldom happens by accident. Rigour and creativity are both required. We recommend a 5-step marketing management approach (Figure 2). Starting with analysis then creativity to find an idea and message that engages rationally and emotionally. Prefer pictures, videos and multi-media experiences to words alone.

The Marketing Directors' Marketing Management Approach
The Marketing Directors’ Marketing Management Approach

3. To select media to get your message across, understand your customer and customer journey, media landscape, and engagement drivers and barriers. Then use the objective and task method to plan your campaign, and assess which media offer best value. Look beyond digital media and marketing hype. Remember the story about the emperor’s new clothes. What’s new or big is not necessarily the best media option.

4. Don’t just rely on return on marketing investment (ROMI) to measure and manage performance. This risks short-term at the expense of the long-term gain. Use a broad range of metrics to measure customer engagement including brand awareness, interest, usage, preference and loyalty. Then test, measure and learn and test, measure and learn.

What do you think? Let us know.

And to review and enhance your marketing management methods ask The Marketing Directors for help. We’ll match our team to your needs.

References

(1) and (2) Statistica.com
(3) eMarketer.com
(4) Retail Research.org
(5) PwC Global Entertainment and Media Outlook 2016-2020
(6) AA/Warc Expenditure Report, April 2016
(7) Latest company reports and accounts, eMarketer.com (Jan 2017)
(8) TMD estimates based on published sources

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s