“Data-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Jared Belsky, CEO at 360i.
In most marketing organizations, brand and performance are pitted against each other, and budgets are chopped up accordingly. It’s an ingrained practice that ultimately gives large swaths of media budgets a free pass.
Cliches about marketers on both sides of the divide are unfortunately often true. Brand marketers get excited about brand integrations and seven-figure YouTube masthead buys that grab a lot of attention, while performance marketers are overly obsessed with measuring every dollar.
Over time, each side seems to slide deeper into its comfort zone. This often results in teams jockeying to secure more spend, regardless of whether their respective channels are delivering results that justify more investment.
As we head into 2020, conditions that allowed the brand and performance divide to persist are finally shifting, and marketers can take action. Here are three drivers that will render this antiquated way of operating obsolete:
1. Today’s platforms require an integrated approach
A siloed direct-response marketer might give short shrift to the importance of creative and customer experience, while a classical brand marketer might overlook the importance of custom audiences and analytics.
To maximize the potential of Google, Facebook and other platforms, marketers need to have mastered both brand and performance. In the case of Instagram, for example, success depends on understanding how to import custom audiences and set up rigorous measurement testing, but brand will be nowhere without beautiful creative.
Look to examples of high-growth direct-to-consumer companies that are killing it at both disciplines. For example, Glossier became an Instagram phenomenon by cultivating brand ambassadors, resharing user content to build community and smartly deploying targeted ads.
2. Marketing orgs are being shaken up
I’ve heard about numerous instances of global brands tapping management consultancies to review the structure of their marketing organizations, which has resulted in lower headcounts, fewer silos and greater budget fluidity and accountability in many cases.
CMOs are fed up, and fiefdoms defined by budget and territory are finally being torn down.
3. A slowdown may be looming
Should the economy stall, companies will obsess over every dollar spent on marketing. The 2001 and 2009 downturns led to decelerations in ad spending, along with an embrace of more accountable mediums. (Paid search, for example, grew 2.2% in 2009 while spending on most other channels declined.) Should a downturn hit, 2020 will be no different.
To ensure we don’t allow big portions of budgets to get stuck in this tug-of-war, brands need to push for measurement of things people insist are hard to measure. This isn’t to kill creativity but to propel sustainability. Push influencer marketing to be accountable by tagging it. Push OOH by using location-tracking technology to better understand how it moves people into stores. Push the media mix to be more iterative, cheaper, faster and more granular. Push more of linear TV budget into addressable or OTT to better understand true cause and effect. Push. Question. Push.
Companies also must embrace zero-based budgeting. Instead of starting 2020 with essentially the same media mix as always, with a percentage or two shaved off one channel’s budget and reallocated to another’s, throw out the formula and evaluate each channel’s performance rigorously, with fresh eyes, before allocating a single dollar to it. It’s scary but you will love the outcome.
Finally, I’d take it one step further and implement what I’m calling “zero-based org construction,” which means evaluating an organization rigorously to determine how best to use its headcount and set up teams. Imagine slotting people into roles based on where the greatest needs lie instead of being handcuffed by an existing org chart.
Further, consider the notion of eliminating brand and performance silos altogether, or at least ensuring there’s some unifier of the two orgs below the CMO level. Organization design leads to behavior change – in this case, by redirecting dollars to channels and tactics that deliver the greatest value.
Ultimately, if it sounds like I’m arguing against branding because it’s harder to measure, I’m not. (The dangers of over-reliance on performance metrics have also been documented.) I would argue that brand marketing is more important than ever, as is creativity. But with all the tools and technology at our disposal, there’s no excuse for billions of dollars to be misspent out of habit.
The good news is we’re already moving inexorably toward greater accountability in media. Just think of how much more measurable TV has become in the last decade. Sixty-four million US homes can now be reached via household-specific (addressable) targeting, and ad spending on addressable is expected to reach $3.37 billion in 2020.
Let’s get ahead of the downturn, take down fiefdoms to meet modern CMOs where they are and start demanding accountability. It’s a new world where all are welcome, brand and performance folks alike. As we head into 2020, let’s pledge not to give a free pass to any media dollars, nor let a single dollar get stuck in the territorial battles between “brand” and “performance.”