More with less: a marketer’s mantra on efficiency
Marketing efficiency is a top priority. How can it best be achieved?
The term “frugal innovation” describes a significant shift occurring in the business world: the drive to deliver high-quality products and services at affordable prices.
In marketing, it often means working smarter with fewer resources, and though it was first coined in reference to products designed for low-income consumers in developing countries, the idea has taken root as a guiding principle for marketers the world over looking to improve the customer experience.
For many of them, the need to do more with less is hardly an idle concern: a survey of global marketers showed only 52% planned to increase marketing budgets last year, the lowest proportion since 2012. A separate survey of US marketers showed spend on international marketing dropping from 22% of overall marketing budget to 17% from February to August of last year.
Yet the number of channels marketers must address continues to grow. The need for transparency and marketing efficiency is clear. How are marketers planning to work smarter and do more with less?
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Putting Tech to work
One answer is technology. In a poll of senior-level marketers, 80% said they plan to increase spending on digital marketing last year, while 91% of marketing-agency executives anticipate greater client outlays on it.
Big data is a major part of this, with nearly 60% of global marketers in a survey calling it “critical” to their or their clients’ current marketing and advertising efforts, while nearly 65% said either they or their clients will increase data-related spending in the coming year.
While achieving a better understanding of customers is one aim, targeting budgets more effectively is an equally compelling rationale for greater investment in data.
Digital tools such as marketing asset management systems are also being used to reduce the cost involved in production and management of assets and to boost efficiency by encouraging reuse of assets across markets and brands.
David Roman, chief marketing officer at computer maker Lenovo, says that web-based asset production and distribution has made marketing faster, cheaper and easier. “The cost of web content per piece has come down dramatically,” he says, specifically citing web video, the cost of which is “very low compared to traditional commercials”.
One reason for this is crowdsourcing, in which the general public contributes stories, images and other pieces of marketing arsenal. This can help reduce the cost of asset creation by turning the customer into a member of the creative team. Its use is growing rapidly, with top fast-moving consumer goods firms like Unilever particularly keen adopters, boosting their crowdsourcing efforts by 30% from 2013 to 2014 and 27% from 2014 to 2015.
Getting buy-in for automation
Technology is also being used to streamline internal operations, as firms turn to solutions like automation software, which is increasingly viewed as a crucial component of a more efficient marketing function, allowing firms to make informed decisions on where to invest based on data. Its use among marketers is booming, according to a recent survey, in which 76% of respondents called it “very important” to the overall performance of marketing.
Many marketers are now facing the challenge of convincing boards to invest in such solutions, which can lead to reduced risk and reduced cost, according to Synthesis, a communications technology firm. Unsurprisingly, the internet is now well-stocked with articles on how marketers can sell automation to the C-suite (not least, of course, by purveyors of automation tools).
Centralizing and simplifying
Centralization and simplification are also part of the new mantra. This may be particularly relevant for global firms which often launch initiatives based around a core insight which still must be tailored to regional markets.
The key to this, says Lenovo’s vice president for worldwide brand, Quinn O’Brien, is to recognize that global campaigns still require some degree of centralized control. “Without that,” he says, “local markets just go and do their own things, and tend to market the product rather than do something that also builds the brand.”
Simplification can mean many things, whether it be streamlining partnerships or achieving more by doing less. Consumer-goods firm P&G is doing all of the above.
The company has cut in half the number of agencies it works with to spend nearly $8bn on advertising and marketing related materials annually. It has also focused on fewer but better advertising and marketing campaigns for several brands, saving $620m in the process, which it has shifted to media and sampling activities.
The agile imperative
Many of these efficiency-boosting tools fall under the umbrella of “agility”, which has become a guiding principle for marketers the world over. Marketing entrepreneur Joel York describes agility as “the ability to adjust supply to meet changing demand”—when customers want something different than what’s currently on offer, an agile firm will deliver with minimal disruption to internal processes.
In marketing, harnessing agility means the product a marketer delivers—a message, a meme, an asset, whether tangible or intangible—can shift easily with the prevailing winds. This requires smart prioritization of resources and the flexibility to deploy them well.
To take one example, Transport for London (TfL), a British government body, is constantly adjusting its service offerings to “improve the customer experience and brand reputation at relatively little cost”, according to Chris Macleod, TfL’s marketing director, as quoted in an recent article in Marketing Week. These tweaks include making transport information available for free to third-party companies that develop travel apps and using social media to provide real-time travel updates to customers.
In action, agility can increase revenue by 20-40%, according to recent analysis by McKinsey & Company, a consultancy. The most important aspect they cite is, perhaps unsurprisingly, the human one—“bringing together a small team of talented people who can work together at speed”. This may involve outsourcing some functions, particularly when it comes to content production, data and analytics.
In today’s rapidly-shifting landscape and increasingly global playing field, efficiency matters in gaining an upper hand. However it is achieved, the innovation that can result from the need to gain more bang for the buck may often be more about slow, incremental change than bursts of inspiration and flashes of marketing genius.
Written by The Economist Intelligence Unit
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