ANA Marketing Musings

ANA's Marketer's Constitution

Today I will talk about ANA’s 100th Anniversary Marketer's Constitution. The constitution is a series of fundamental principles that we believe will apply to the marketing industry. Our hope is that these principles will carry us forward, helping us to build our brands and businesses. This is part one of a three part series.

It’s there in black and white…

Marketers will always have an affinity for print advertising.  It’s one of our most valuable targeting and reach-extending media. It has shelf life, and it’s extraordinary in its ability to match the advertising message with the editorial content.

However, the media landscape has evolved – and continues to evolve with lightening speed.  For print to remain competitive within our marketing mix, we offer 10 “pleas” to get the print industry to the head of the class. The following were presented at the June 16 ANA Print Advertising Forum held at the Grand Hyatt in New York City:

1. Help marketers understand print’s cause/effect contribution to generating results and building brands long-term. We need to understand more why print is the medium of choice for marketers to achieve their near term and strategic objectives.

2. Give us issue-specific circulation and cumulative data that show how an audience builds over time. Identify how that data is most specifically relevant for our brands target audience. Data is great – but it must be relevant and have targeted focused value.

3. Give us reader involvement insights that help us understand the unique connections publications have with readers. How do readers “get cozy” with the publications and show us how that affinity cascades to the advertised brands.

4. Tap into the creative energy that permeates editorial pages, and give advertisers some new, innovative, branded ways to sponsor publications. The relationship with print has to become broader, more integrated, more involved with a range of communications alternatives. We have to leverage them together to create enough “punch” to cut through the clutter and deliver an “embracing” message.

5. Reduce the long lead times to secure space and submit materials to monthly magazines. There really is no excuse for not making this happen. Publications need to examine their internal process chains and find ways to cut needless time out of their production cycle – to make it more accommodative to advertisers.

6. This one’s for agencies.  Find new, cost efficient ways for us to test print creative – and to test more frequently. With technological advances and the ability to transfer digital images of the web, there are clearly ways of expanding cost effective opportunities to understand the effectiveness of alternative print creative.

7. This one’s also for agencies. Raise the creative bar.  Put some of your senior talent on print advertising.  We want intelligent, visually exciting breakthrough print campaigns. This one has been talked about for years – and I just don’t get why print is always taking a back seat to electronic media. Recognizing the size of the investment in print vehicles, print creative must take a prominent stance in the minds of the agency creative management team

8. Either justify or end the practice – once and for all – of absurd bleed charges. Enough said. Let’s make this happen and let this old, antiquated legacy cost die a quick and painless death. They have no place in today’s marketing cost structure – particularly as the emphasis on marketing accountability has taken front and center position with CMO’s and CEO’s.

9. Either justify or end the practice of surcharges for national newspaper advertising in local editions. Fees should be based on value delivered – that’s why this doesn’t make sense.  

10. Get with the digital program!  Print media should be the leaders – not the followers – in this exciting realm. There is an expanding bundle of opportunities that will open up new vistas for everyone in the communications business – particularly those in the print arena. Do it now and make the world safe for the world of opportunity.

Marketing Accountability – Finally Taking Hold

Of course the journey is very long – but the principle of marketing accountability seems to be finally getting a grip on the overall Marketing Supply Chain. And I am thrilled!

Several recent examples I would like to highlight:

* Ad-ID and E-biz for media are both starting to gain traction. Ad-ID is the new digital coding system that acts as the industry’s UPC code. By applying this to all advertising assets, companies can digitally track, traffic and transfer assets and messages across the entire chain of communications – from advertiser to media delivery. 250 companies are now using Ad-ID. E-biz, or EDI as many of us remember, provides two way digital information flow for television and radio – with applicability to other media as well. Through digital communications, paper and people can be removed from the advertising asset management process. This eliminates costly rework and agency labor, greatly improves accuracy and champions marketing and media accountability. Great progress has been seen – particularly in the local television and radio industries.

* The XMOS studies represent an important step forward in making media management decisions. XMOS literally helps companies identify optimum asset allocations but can also do so within the context of changing creative -- which is the wild card that has largely been viewed as less controllable. This gives companies the latitude to explore different media options to optimize revenue generation down at the brand level. Several “big-name” brands are leveraging this tool to make important brand / media management changes.

* Project Apollo represents a big step forward in consumer research. Apollo is a “single-source” research model that provides critical learning about actual purchases in response to exposure to radio and television media. Measuring “cause and effect” represents a significant leap in learning – providing marketers with increased knowledge about the implications of changing marketing spending and media allocations.

* Procurement departments have certainly proved their worth to improve agency accountability – even though they have elicited pain for marketers and agencies. Having this “third-party” group involved has elicited greater discipline among all parties improving the evaluation and decision making processes.

And, of course, I could go on and on. These “cases” are simply the tip of the iceberg for a “movement” that is well underway – but has a long way to go. We will not let our foot off the accelerator as we convene ANA’s Marketing Accountability Forum in July and ANA’s Annual Conference in October.

Great Marketers Market Great

So what are the common denominators for successful marketers in today’s rapidly changing environment? How can leaders best respond to the challenges of putting consumers in charge … and for making marketing investments more accountable?

I see six distinct platforms that are the foundation for consistent, top notch marketing performance in any industry:

1. Continuous product innovation or reinvention. If you’re not new … or you’re not perceived to be fresh and relevant … then you’re old news … yesterday’s business. Marketers must maintain their relevance in consumers’ minds or get blown away by fast-moving competition. Simply look at what Jet Blue and Southwest Airlines have done to reinvent the airline industry. By simply adding a few television screens and by offering consistent, understandable low fares, they’ve surged past the legacy carriers with sustainable, high quality business performance.

2. Product and service quality is the next critical marketing platform. Consistently being the best-in-class -- year-in and year-out -- is undoubtedly a fundamental component for long-term profitable success. Starbucks is a classic example of winning in the marketplace by consistently exceeding customer expectations … and accomplishing that without the benefit of a sustained communications program.

3. Offering flexible and fair value is an unbeatable way to win consumers’ hearts and minds. I think that one of the best and most recent examples of this marketing platform was Wendy’s extra value meal campaign. Not only was their offering reasonably priced, it was highly flexible. It provided consumers with the appealing choice of substituting a salad, chili or baked potato for the standard French fries offering. This was a stroke of brilliance and ingenuity – and was very useful to blunt the flood of food advertising criticism coming from Washington and special interest groups.

4. Marketing cost efficiency and streamlined marketing processes are paramount. Marketers are consistently looking at their own cost profiles to ensure they are getting the best return for their marketing investment. They need to know whether their marketing supply chain is as efficient as it can be. That’s why procurement departments are becoming increasingly involved in so many decisions, including agency management and media negotiation. It’s also why marketers are becoming more directly involved in functions like talent payments. In fact, the ANA Production Management Committee has just released guidelines for effectively managing television talent payments. And the Committee is encouraging advertisers to meet with their agencies and production consultants to discuss how these guidelines might help maximize efficiencies.

In addition, marketers are working to understand the effectiveness and efficiency of their media buys. Looking to maximize weight against working media, advertisers are striving to reconfigure their marketing mix to improve overall cost balance and to optimize revenue generation. American Express is one of the most visible examples of a marketer shrewdly redeploying its marketing mix.

5. Measurements and Metrics. Perhaps the most profound change in marketers’ behavior is the intensified focus on measurements and metrics.  Driven by the old adage, “you can’t manage what you can’t measure,” marketers are seeking greater precision in assessing the outcomes of their actions, as well as deeper knowledge of alternative communications disciplines. Indeed, the desire to transform marketing into a “science” is one of today’s hottest trends.

6. The final platform – and perhaps the most important transformation for marketers -- is making direct Consumer (or customer) Connections. Today, one-to-one connections are more feasible than ever thanks to targeted or addressable media – whether over the Internet … through the emerging arena of wireless … with the growing opportunities forged by cable TV … via enhanced forms of e-mail marketing … or in the new realm of blogging and other such alternative communication forms. In many respects, marketers are finding that “mass marketing is not dead,” it’s just undergoing an exciting transformation to “Mass Marketing – one customer at a time.” The proliferation of communication channels that we have demonized as “Media Fragmentation” has actually become the foundation for abundant new opportunities created by “Media Diversity.”
The pathway to each of these six platforms is through technology, innovation and experimentation. And importantly, they all recognize that marketing has dramatically shifted -- from a focus on the masses, to a focus on the individual. Marketing will continue to evolve -- ultimately, I believe, becoming a true “One-to-One” discipline. Consumers have enormous leverage and power to determine what they want to see and hear. We marketers must determine how we’re going to get invited to the table because in essence, marketing is becoming “By invitation only.”

Television Has a Great Future – Believe it or not

In my last blog posting, “Who’s Killing Television”, I focused most of my remarks on key issues that the Television industry needs to address in short order. At ANA’s Television Advertising Forum yesterday, I reiterated those concerns – and, in fact, added one or two more.

However, despite my concerns, I am, actually, quite optimistic about television’s long-term health and well being. Over time, I believe television will retain its “championship status” as the preferred medium-of-choice by marketers for a number of very important reasons:

* First and foremost, I believe the convergence of high definition TV and the digital power of the Internet will flourish in the years ahead. This is such a “natural” and will lead to a cavalcade of exciting opportunities for all advertisers and marketers. Brian Roberts of Comcast pretty much said that in his speech at the 4A’s media conference earlier this month.

* Second, convergence will be channeled through one of the most important future tools for marketers – the set-top box. This virtual in-home computer will become the advertisers’ best friend and will be the foundation for lots of positive change for television advertising. In particular, the data that cable and satellite companies will be able to provide to advertisers will – for the first time -- deliver important measurements and metrics and facilitate the level of accountability so needed by the marketing community.

* Third, television advertising inventory will continue to expand with the proliferation of channels and programming. With more channels and, theoretically, more content to fill those channels, the laws of supply and demand just may tip the scales back in the direction of marketers. Advertisers will be able to use television more selectively, hopefully moderating the growth of CPMs and bringing them in line with more reasonable measures.

* Fourth, television sponsorship will continue to unfold in new, creative ways with consumers giving greater permission to advertisers to engage them. Specifically, I am pointing to the evolving opportunities afforded by branded content as well as the development of video-on-demand. These vehicles will provide alternatives to the traditional 30-second spot by generating more personalized advertising and content specifically focused at target consumers.

* Fifth, the quality of programming will continue to improve – particularly at the networks. I think this year is one of the strongest we have seen in a long time. If the networks keep getting it right, opportunities will abound for advertisers to cost effectively reach the millions of eyeballs they expect from the television medium.

* Finally – and what I am most excited and interested in -- is the technology enabling more consumer targeting. I believe this trend will continue to accelerate and proliferate. Whether it’s the targeting technology offered by companies like Visible World or the addressable alternatives available through set-top box management, marketers will gain increased ability to zero-in on their core consumers, bringing greater efficiency and effectiveness to their marketing planning and execution. Of course it is incumbent upon marketers to collect consumer information in a fair manner that takes into account legitimate personal privacy concerns.

The television industry has some of the smartest and savviest people in the marketing community. They are very much aware that television is no longer the bedrock for brand communications. That’s why they need to move aggressively to mitigate their structural issues and leverage the spectacular opportunities they have before them – and do so with purpose and passion. If they need a wake up call, they need look no further than the Pepsi One re-launch – which has no television commercials in its marketing plan.

It’ll be interesting to see how the “drama” plays out. Kind of like a soap opera – don’t you think?

More thoughts to come from the ANA Television Advertising Forum…

What’s In Store for 2005?

In Monday’s issue of MediaPost’s MediaDailyNews, Joe Mandese asked for my predictions for the upcoming year. Along with marketing colleagues such as Laura Desmond, CEO, MediaVest; Steve Farella, CEO Targetcast TCM and Betsy Frank, executive vice-president research and planning, Viacom’s cable networks; I had the opportunity to reflect on where the industry is headed in 2005. Here are some of my thoughts:

• "Measurement takes a big ramp-up next year as Project Apollo, Nielsen commercial ratings, the Radio Advertising Bureau's Media Effectiveness Lab, the Advertising Research Foundation/Interactive Advertising Bureau's Cross Media Labs and overall technology play a critical role in this important developmental arena."
• "Marketing Organization Design will get on the drawing board as an important priority for the marketing community."   
• "CEOs and CMOs will move closer and get their agendas aligned."
• "The advertising marketplace will be more robust than expected with overall spending increases across all media at better than 7 percent."

A recent Wall Street Journal article, “The Ad World's Message for 2005: Stealth” (unavailable online) made an interesting point about the challenges facing our industry:

If marketers learned one key point over the past year, it is that reaching consumers by traditional means -- TV, magazines and newspapers -- is getting harder. American spenders are moving targets. They are seeking information from a broader range of sources than ever and, in the process, filtering out messages that don't resonate or speak to their specific needs.

Along with the strong vision of ANA chairman, Jim Stengel, global marketing office for Procter & Gamble, we have already begun to work on key themes to focus on this year including: marketing accountability, harnessing the power of the marketing organization, and leveraging marketing technology.

As a sneak preview, here’s what the ANA has planned in 2005 to meet these marketplace needs. Look for the ANA to: strengthen communication between the CEO and CMO through informative and content driven conferences, continue with our corporate marketing training program including industry accreditation, develop new conferences like the Law and Business Affairs Conference to discuss topical industry issues and support technological advances like Ad-ID.

We know that the marketing environment is changing- it’s our job to move forward and stay ahead of the curve.

Is the CMO Really Necessary?

In a recent blog post I noted that accountability is the cornerstone of the ANA. It is our driving force, our core mission, our reason for being. And the table was certainly set for us earlier this month at the ANA Masters of Marketing Conference where presentation after presentation demonstrated that the underlying theme was most definitely “Accountability.”

The topic echoed throughout the conference from presenters Larry Light of McDonald’s to Mike Winkler of Hewlett Packard -- everyone in attendance was in agreement that marketers are under intense pressure to demonstrate real value for their investments. Marketers are ravenous to deploy new and relevant accountability tools and are voracious to grow their brand building knowledge.

Naturally, you might ask, where is the CMO in this effort to capture marketing accountability? It’s our question too. So, recently we dug deeper into the world of the marketing organization and the CMO by teaming up with management consulting firm, Booz Allen Hamilton. We set out to assess the role and priorities of marketing organizations in a focused study.

One major theme that emerged was that the role of the CMO is poorly defined at an alarming number of companies and that companies expect marketing to provide measurable outcomes like ROI, but current metrics are not up to the task. Nearly 75% of marketers and non-marketers agree that marketing is far more important to corporate success than it was five years ago. But marketing is increasingly disconnected from the CEO agenda with top line growth (52%) being the primary focus for CEOs and marketing efforts focused more on tactical issues such as setting and maintaining branding guidelines (83%).

The landscape of marketing is clearly changing and the Annual Conference elevated this conversation. With each step we take, as an industry, we are sharing our best practices, identifying our goals and shaping new and improved ways to accomplish optimal business models. Jim Stengel, Global Marketing Officer for Procter & Gamble, and the newly announced chairman of the ANA, opened the gates and told attendees that accountability and ROI can be exciting and sexy.

While there is no one silver bullet out there, the collective industry is beginning to move aggressively to increment the level of sophistication and marketing intellectual capital to drive productivity and re-engage our core customers as we build our brands. Marketers are taking increasing control as they are:

* Analyzing internal data
* Conducting original quantitative, qualitative and local research
* Reviewing the use and deployment of key metrics
* Providing more in-depth analyses of syndicated data
* Implementing marketing mix modeling
* Constructing financial models with marketing metrics
* Using brand valuation analyses

Is the CMO really necessary? Absolutely. Marketing accountability and the CMO model are observably linked. The success of each depends on that of the other and it’s essential that this emerging CMO reach out and grab hold of the opportunities within the industry that will ultimately help to drive the marketing accountability agenda.

The Road to Marketing Accountability

Marketing accountability is one of the most important subjects we have in front of us at the ANA – and for very good reasons. Too often, the marketing industry had been blistered by criticism of our inability to connect "the cause" with "the effect." Often, marketers had to struggle and guess at the results of well thought out marketing and advertising campaigns. Trying to understand the impact on brands was even harder to assess.

I am very pleased that the industry has taken the message to heart. Perhaps reacting to impatient CEO's, the industry has been hard at work to bring more measurements and common sense to this arena. Efforts have sprung up in most companies to enhance the level of marketing quantification and valuation. Some companies are well ahead of others – but, importantly, we feel that the movement is gaining important traction – traction that we will continue to fuel at our upcoming "Masters of Marketing" conference – ANA’s Annual Conference – on October 7-10.

We believe so much in this subject that we, at the ANA, will be raising the marketing accountability "bar" at every opportunity. We applaud the work of our comrades at the Radio Advertising Bureau, the Advertising Research Foundation, the Interactive Advertising Bureau and others for their efforts to help the industry raise that bar. For ANA’s part, marketing accountability is one of the leading subjects at our marketing and media committee meetings, it is reflected in our increased survey work with members, and it is the subject of a dedicated conference that the ANA kicked off this year – The Marketing Accountability Forum. At that meeting, Peter Sealey – the CEO of the Los Altos Group and the host for the meeting – brought increased attention to one of the most important innovations to enhance marketing accountability – Ad-ID.

For those unfamiliar with Ad-ID, the quick answer is that it represents the industry's "UPC Code" for digitally tagging and tracking every advertising and marketing asset a company may have – be it television, radio, internet, packaging or print. Created jointly by the 4A’s and the ANA, the rollout of Ad-ID is well underway – currently being used by more than 100 companies – a list that is growing very quickly. By providing a central coding system that is embraced and recognized by all in the media, agency and marketing communities, the opportunities for substantially enhancing productivity are endless. One such opportunity we are very excited about is the integration of Ad-ID with the upcoming rollout of electronic data interchange (EDI). Just think of the enormous productivity that will be generated by the media ordering and invoicing system. Just think about the end of incorrect advertising placements and screw-ups in the billing process. Just think of having the ability to verify what commercial truly ran. Just think about the opportunity to take your media asset and target it more directly to a particular audience segment or geography – and being able to measure its impact. Those dreams are becoming reality. Just recently, the major TV networks (ABC, CBS, NBC, FOX) have become Ad-ID compliant – enhancing the industry’s ability to realize increasing productivity over time.

We really are making strides to guessing less and measuring more. We, as an industry, have a long way to go. But we are on the right track – and we are beginning to make considerable progress. The fun aspect is that we are not far off from making a real dent into understanding the answer to the age old John Wannamaker question "Which half of my advertising is wasted?"