How "Broken" Is Marketing at Major Advertisers?

Once upon a time this marketing network operated like a fine Olympic crew pulling on the oars in unison and winning competitive races slicing through the water with nary a splash amp160This is no longer the case amp160The marketing team is broken amp160Cost reductions have replaced investments in marketing and there is a loss of confidence in how to effectively spend marketing dollars amp160Embarrassingly CMOs brag about their muscular cost reductions as if cutbacks in marketing spend were heroic accomplishments rather than symbols of failure in expertise and executionHolding company CEOs complain about the shortsightedness of their costcutting clients and blame holding company share price declines on them ignoring the fact that their media and creative agencies have failed Scopes of Work and media plans have not restored client growth rates amp160Agency creative efforts and media executions have been a bust and agencies have lost credibility further affecting their fees and relationshipsSince 2008 the marketing emphasis has been on quotmore digitalsocialquot and quotmore cost reductionsquot amp160The marketing center of gravity passed to Indirect Procurement whichamp160has driven agency fee reductions increased the number and rate of agency reviews eliminated AOR relationships andamp160explosively increased the number of agencies serving brands amp160This has been accompanied by a shift of strategic thinking from agency to client and increased client investments in inhouse agencies amp160Clients have increased their own capabilities and enfeebled the capabilities of their agenciesBrands have continued to stagnate amp160The marketing network has failed even if in the shortrun it satisfied Wall Street39s need for increased shareholder value through cutbacks in costs amp160Job security disappeared amp160CMO tenure is very short as are agency relationshipsIt39s time for a rethink amp160CMOs need to wrest control of marketing from procurement and create a new dialogue within the extended marketing network amp160 quotWhat will it take to restore brand growth to our portfolio of brands amp160How much better can our brands be if certain things are done amp160What are those things amp160Who needs to be involved to answer the questions amp160What kind of agency relationships do we need to facilitate growth amp160What kind of capabilities do our agencies need to be more effective amp160How should we develop effective media and creative Scopes of Work to achieve our full potential amp160How much spend will this take amp160What are the problems that need to be overcome amp160How probable are the outcomesquotCMOs need to engage their agencies in this dialogue and retain the agencies who can meaningfully contributeDecades ago executives in the US automotive industry threatened by Japanese share gains asked those same kinds of questions and they empowered procurement and their key suppliers to help them find the answersamp160see The Machine that Changed the World by Womack Jones and Roos amp160Procurement went in a new direction with great successamp160reducing the number of manufacturing suppliers turning those retained into strategic partners working to eliminate process inefficiencies and sharing the benefits of quothigher quality at lower costquot with their suppliers amp160They transformed their supply chains from vendorships to partnerships found a rational and fair way to pay their suppliersamp160and eliminated vendorbashing from their vocabulary and practices amp160They recognized that a strong and motivated supply chain focused on improving results could perform miracles in the marketplace amp160Indeed they did so automobile manufacturers reduced their quotnonvalueadded costsquot by 3040 and significantly improved car qualityIronically once these same procurement folks migrated from manufacturing to the agency worldamp160they turned antagonistic agencies were less knowledgeable and much less cooperative than their former manufacturing suppliers and procurement thus reverted to vendorbashing practices They took advantage of their CMOs39 distaste for agency management and turned it into their own private domain amp160Their success can be measured by the dominance of procurement folks who now attend ANA39s Financial Management ConferencesMarketing is very broken amp160CMOs conceded their authority to procurement amp160Procurement followed the quotshareholder valuequot strategy of their CFOs by cutting costs amp160Agencies became willing victims happy for any morsels of income to satisfy their holding company owners amp160Agencies are now the shadow of their former selves understaffed and juniorized overworked and content to execute and take ordersImproved product growth rates cannot be built on cost reduction programs amp160At some point CMOs will have to reassert hegemony over the marketing network and create product marketing programs designed to achieve improved growthIt may take the vigorous support of the consulting firms working with CMOs to help them develop a new game plan unless agencies too wise up transform themselves and flex some strategic musclesCartoon credit Stuart Leeds The New Yorker The Cartoon Bank With permissionClick the social buttons above or below to share this story with your friends and colleaguesThe opinions and points of view expressed in this content are exclusively the views of the author andor subjects and do not necessarily represent the views of MediaVillagecomMyersBizNet Inc management or associated writers

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How "Broken" Is Marketing at Major Advertisers?

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Michael Farmer

FEMA and the Ad Council Encourage AANHPI Communities to Enhance Disaster Preparedness in New PSAs - Ad Council InSites

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How "Broken" Is Marketing at Major Advertisers?

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Michael Farmer

FEMA and the Ad Council Encourage AANHPI Communities to Enhance Disaster Preparedness in New PSAs - Ad Council InSites

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