How is the present system failing the CMOs and the way forward – Part 2
It is given that CMOs need to be equipped with tools and techniques that enable them in their decision-making process during the planning stage, but a lot of legacy methods’ approach the solution like trying to fit a square peg in a round hole.
Here is why many of the existing techniques provide only a partial solution and not a comprehensive one.
A. Siloed Planning
The planning of all marketing channels is done independently, be it TV, Radio, Digital, Print, and Outdoor. The choice of selection of channels and programs is the basis on the efficiency of the channels and program in question and not based on the effectiveness of the respective choice.
Lack of understanding of the combined and cumulative impact of all media and their effective results in sub-optimal outcomes, wastage of marketing investments.
B. Siloed Measurement:
Marketing generates ROI when multiple components of the activity mix work in cohesion. Even if one element doesn’t perform it will impact the optimal ROI. Everything is interconnected and nothing is independent of each other. But the existing systems treat each variable as an independent variable creating an inherent flaw in the whole methodology.
C. Existing methods are incomplete
Most of the popular measurement techniques like MMM (Market Mix Modelling ) developed in the ’70s, MTA (Multi-Touch Attribution for digital) and Unified Measurement (MMM + MTA, a hybrid mix) are flawed as they assume that all media activities and marketing activities are independent and completely unfit for an interconnected consumer world.
For example, in an interconnected world, an ad seen on TV can trigger some action on digital or a positive mention in social media can result in e-commerce initiation”
D. Not Agile:
In a world of dynamic changes, agility is becoming one of the Key factors determining the success of the planning.
Having on-going control over one’s marketing mix becomes critical as we move towards making agile marketing decisions and be ready to respond quickly to the market needs.
According to consulting firm Bain & Co. and Twitter, which included feedback from approximately 650 U.S. marketing executives, half of the executives surveyed said this “make-or-break period” has gotten shorter over the past five years, which the researchers suggest has made planning and reacting in this narrow window more of a challenge.
The present nature of planning and measurement is static. It is done infrequently, say, once a year or twice a year. It doesn’t offer the agility of learning real-time such that real-time marketing decisions can be made.
E. Aggregate view Vs Granular actionable insights:
Imagine an investor allocating the investments broadly by categories to invest and select stocks basis the cheapest available and not by growth prospects? Isn’t that sub-optimal?
Presently planning is done at a very aggregate level of “medium-level”(say TV or digital or events etc.). The important decisions on the micro elements within a chosen marketing channel is primarily driven by efficiency alone (what rate am I getting it a and what would be the cost per contact metrics) and perceptions. The “impact” of the inputs on the outcome KPIs (Sales or app downloads or profit margins et al.) is most often missing!
In sum, a planning process that is supposed to be bottoms up ends up being top-down.
Because of siloed planning and measurement as well as the lopsided top-down approach, there are huge inefficiencies that could be identified at the planning stage itself, instead of feeling bad about the wasted investments, post facto.
Good news to marketing decision-makers:
A new paradigm of planning is required to address siloed, static top-down, spreadsheet-based approaches of the present process with a dynamic, interconnected, bottom-up approach.
The new paradigm should mark the beginning of the end of a broken 70s system and create a perfect solution that is eluding marketers for decades. Our next article in the series will explore the new age solutions which can deliver this.