Over the past 2 years, the relationship between marketing spend and revenue generation has changed. Like human relationships, brand-consumer relationships are also tested in times of stress.
Some business and marketing circles suggest that 2023 will be the first normal year after the failures of the past few years. In my opinion, nothing could be further from the truth. A perfect storm is brewing, and few marketing firms are ready to come out strong on the other side.
So, here are some key questions CMOs should ask themselves when assessing their marketing readiness for 2023:
1. Am I aware of the new relationship between my marketing spend and brand sales?
Over the past 2 years, the relationship between marketing spend and revenue generation has changed. Like human relationships, brand-consumer relationships are also tested in times of stress. And regardless of the outcome, there are usually surprises. Here are some observations:Big brands cost too much:
Many top brands have come out of the pandemic realizing that they spent more than they should have in the past so that spending cuts during the pandemic did not affect sales. There are good reasons for high costs: data-driven marketing, marketing models, media inflation, media fragmentation, competitive activity, etc. Then there's the organizational truth: No one has ever seen an aspiring GMO on a shoestring budget. The bottom line is that big brands have momentum that can keep them going longer for less/free. What is the next level for your brand?Unknown Brand Accepted Overnight:
Brand building has never been more modular than it is today. Find offers, outsourced products, outsourced manufacturing, outsourced distribution and logistics, custom packaging design and marketing. The past two years have accelerated this trend and leveled the playing field for new players. The emergence of powerful micro-brands in the watch industry is a good example of this modular business model. It becomes easier in household and personal matters. If new entrants can handle such small volumes, what can I learn for my brand?2. What does digital marketing actually do for my business?
Questioning the value of digital marketing is heresy in many marketing organizations. Only strong people have the discipline to objectively question each element of the marketing mix and ask the tough questions: What have you done for my business lately?Marketing means more than just digital marketing:
Battalions of young marketers and young CMOs of well-known brands are relentlessly going digital. Yes, digital tools can do wonders for mid to low level work (training and sales), which is why startups can build a business so quickly. But mass public reach is still important for big brands that sell products to millions of customers every month. A digital approach to building a brand at scale is an unsolved challenge. Unsurprisingly, the biggest spend on mass advertising (Superbowl, IPL anyone?) is for new digital/tech brands looking to build awareness at scale.See also: How has marketing changed in the last half century?
Digital marketing sugar vs squirrel
The bottom funnel of performance based digital marketing is great as long as you keep buying. Like sugar you stop and feed him again. What protein parts of your digital marketing plan generate and maintain visibility and revenue? Digital marketing and content-based commerce are fast becoming a full-fledged digital marketing option.3. Are all my top managers equally good at marketing?
The dramatic fragmentation of consumers over the past few years has created equally serious market penetration challenges. A fragmented consumer base has more access and choice when it comes to brands; And it's exponentially more difficult for marketers.CMOs have internal issues that are just as important
Dealing with a fragmented consumer world and building a business is quite a challenge. Today's CMOs face the added challenge of working with a large number of partner agencies and engaging relevant internal stakeholders, each with their own unique perspective on marketing. What are you doing to ensure that everyone understands the same marketing language that is relevant to today's fragmented consumer?Guatam Kiawat is Professor of Management Practice at ESSEC Asia Pacific.
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