Forrester analyst Shar VanBoskirk recently shared shared her firm’s updated interactive marketing forecast. I don’t pay attention to forecasts, but I thought the directional assertions were correct. Forrester says that advertising budgets, overall, will decline, but investment will pick up in other areas to drive growth:
With dollars moving out of traditional media toward less expensive and more efficient interactive tools, marketers will actually need less money to accomplish their current advertising goals. But reasonable marketers won’t relinquish budget because their programs are running too efficiently. Instead, marketers will allocate unused advertising dollars into investments like innovation, research, customer service, customer experiences, and marketing-specific technology and IT staff, in order to further marketing’s strategic influence within their companies.
I believe that shift is already happening, but it’s a far bigger shift than budget reallocation. It’s more significant than spending leftover pennies from more efficient advertising programs. While probably not in most industry analysts’ frameworks, this important shift is a pragmatic response, and also a cultural one.
First, the pragmatic response: Consider those investment examples of innovation, research, customer service, customer experiences, and marketing-specific technology. Those organizational functions may drive marketing’s “strategic influence,” but the bottom line is, their contribution can be very measurable, and tied to growth. In an era of marketing performance, they often can better prove their contribution relative to traditional advertising approaches. The difference is crystal-clear for organizations that have disciplined tracking and the right KPIs set up. The encroachment of digital marketing systems will only accelerate this trend.
Now, the cultural response: It’s an admission that competitive growth engines are not necessarily rooted in or limited to advertising spend. In fact, it’s an acknowledgment that growth is driven from many or all parts of the enterprise because they all impact customer experience to some degree. Collectively, all parts of an organization create the brand experience. In an age of flatter and more transparent markets, where integrity and authenticity rule, meaningful brand experiences are more compelling and competitive. They are the ones that drive advocacy, loyalty and more profitable customer relationships over the long term. Advertising can’t do that alone, and it’s less able to move the needle as we go forward.
What is the marketing mandate? Most obvious, organizations need proper KPIs and disciplined tracking systems so they can make more intelligent marketing growth investments — often in unexpected places throughout the organization. Equally important, companies need to reexamine their cultural DNA, because it defines and shapes every component of an organization, and greatly influences external stakeholders. When every part influences growth, it’s important they all march in unison and with speed.
In the end, the entire company is the marketing. And it’s up to the marketing department to lead by creating vision, a framework, and tools for all parts of the organization to participate in its growth.
How is marketing driving growth at your company?
(The above also ran in MediaPost.)