ANA Marketing Musings

GROWTH – IN TOUGH TIMES

The past decade has truly been transformative for marketers. Technology has given us an expanding array of media alternatives including display and search advertising, mobile, digital outdoor, brand and company websites, podcasting, blogging, social networks and more. Supplemented by a resurgence in sponsorship and event marketing and public relations, marketers have an incredible arsenal that go well beyond what traditional television, radio and print have historically provided. And now, with a healthy devotion to marketing accountability, marketers have an increasing sense as to the return on their marketing investments and an opportunity to make better marketing and budgeting decisions.

 

So, what's wrong this picture? Well, with all of our progress, marketers are cutting budgets in the face of economic slowdown. In a recent ANA survey, 53% of marketers polled say they will be reducing budgets during the next six months. While this is not surprising, it is very disappointing. Every marketer worth his salt knows that marketing builds brands. And strong brands have empirically performed better in the short and long term. According to a 1998 PIMS study, companies that increased marketing spend during a recession achieved an average return on capital employed of 4.3% compared to 0.6% for those that maintained marketing spend and -0.8 % for those that cut. In the face of this data, many marketers are making the wrong decision by retrenching instead of increasing investments.

 

Some marketers have, in fact, paid attention to fundamentals. And those marketers are the ones that are likely to succeed. They are the ones that are most committed to achieving "growth". At ANA’s upcoming 2008 Masters of Marketing Conference, we will showcase brands that have decided to invest in their business and build new platforms for growth. Such companies include American Express, Hewlett Packard, Nike, e-Trade, Zappos.com and many more. These companies determined that continued investment in solid fundamental brand building principles was the only path to short and long-term success. And they have been rewarded and will continue to be rewarded regardless of challenging economic conditions or the aggressiveness of competitors.

 

That is why the data from the ANA survey is so disappointing. One would have hoped that CEO’s, CFO’s and CMO’s would have come to the realization that the path to growth is through sustained investment – and not through cutting and trimming and slicing and dicing. What this means, in the end, is that we have a lot more work to do to build brand championship in all corners of the corporation. More to come.

Anne Finucane, CMO of Bank of America, Discusses How to Drive Business Performance

As chief marketing officer for Bank of America, Anne Finucane is charged with transforming the brand from simply one that “everyone knows” to one that everyone wants to use — a destination brand. To make this happen, she is tightly integrating the marketing department with other corporate functions — a directive she knows many other CMOs are dealing with. “Today, corporate marketing organizations are undergoing major transformations and are increasingly fulfilling a significant role in driving business performance,” she says.            

At the upcoming conference, Finucane will discuss how she approaches that challenge, and how it is changing as marketers attempt to harness the power of new media and move closer to customers. That, she says, is at the heart of Bank of America’s latest positioning campaign, called Bank of Opportunity.    

A longtime attendee of ANA conferences, Finucane says she is eager to share her insight with fellow marketers at the unique gathering. “The ANA’s Annual Conference creates an impactful forum for companies to share their success in confronting the dynamic new marketing landscape,” she says.

(As appeared in The Advertiser)

Andrew Robertson, CEO of BBDO, says, "Build your business by focusing on rituals"

Andrew Robertson, president and chief executive officer of BBDO Worldwide, wants ANA members to think about the rituals that shape a consumer’s day, specifically “what they are, how to understand them, and how to use them to build business,” he says. Those rituals include getting ready for work in the morning, reconnecting with loved ones over a meal in the evening, and primping for a night on the town. A study titled “the Ritual masters,” conducted in 2007 by the Omnicom agency, examined and analyzed the daily rituals of more than 5,000 people in 21 countries.

Robertson says his presentation will be based on the results. He declined to say which rituals he would focus on — he doesn’t want to ruin the surprise, after all. “We’ve looked in greater detail into the five biggest rituals, and by biggest I mean those that are practiced most often by most people,” he says.

This year marks the fourth consecutive year of participation in the ANA Annual Conference for Robertson, who looks forward to the event for its eclectic mix of marketers and its collaborative atmosphere. “It gets a fantastic turnout of very senior people who are able to put their competitive differences aside for a few days and focus on the challenges and opportunities that exist in marketing,” he says. “It’s one of the best conferences there is.”

(As appeared in The Advertiser)

Q&A with Tony Hsieh, CEO, Zappos.com

As the ANA's 2008 Annual Conference, Masters of Marketing, approaches, we will be posting Q&As with some of the speakers right here on Marketing Musings.  They will be glimpses into what attendees can expect to hear from the podium in Orlando - so keep checking in.  First up, Tony Hsieh, CEO, Zappos.com:

Q: What can you tell us about your presentation at the Masters of Marketing?

The presentation that I'll be giving, "Building a Brand that Matters", will talk about building a brand in a completely different way: by focusing on company culture and customer service, instead of on traditional marketing and advertising. In the long run, our belief is that your culture and your brand are just two sides of the same coin. By focusing on company culture and customer service, Zappos.com has grown rapidly over the past 9 years.  In 1999, we had virtually no sales. This year, we are on track to do a little over $1 billion in gross merchandise sales. The #1 driver of our growth has been from repeat customers and word of mouth, and I'll be sharing our philosophies and growth strategies.

Q: What do you see ahead in terms of growth for e-commerce? What are the challenges and opportunities ahead?

I think e-commerce will continue to see a lot of growth over the next 5 years, and a lot of web sites will dominate different niches because they are focused on the best customer experience for those niches. This is a huge opportunity for niche Web sites, and a big challenge for larger web sites because it will be hard for larger web sites to serve all the different niche web sites well.

Q: How do you see your own organization evolving over the next decade, especially as it relates to fueling growth?

I think with any growing organization, making sure that the company culture doesn't go downhill as it grows is the biggest challenge, and the same will be true for us at Zappos. This is why we've made focusing on company culture our #1 priority. Our belief is that if we get the culture right, most of the other stuff (including great customer service and our brand equity) will fall into place on its own.

Q: What companies, in your mind, have been the most effective at growing brand equity?

I think that In-N-Out Burger and Apple have both done a really good job at growing their brands by focusing relentlessly on the customer experience.  Both of those companies also have really strong cultures.