Delivering with Precision

Marketing Effectiveness and Efficiency

Robert Shwetz

When $1 doesn’t equal $1

If the often repeated adage by the creator of the American department store
Wannamaker is true, that 50% of my advertising spend is wasted, then over $4
billion is wasted in the Australian media marketplace, based on an annual spend of
over $8 billion.1 Most organisations focus on the implementation side of marketing
communications, with the majority of budgets going towards media and creative.
Demands are now being placed on Marketers to be more accountable, and deliver a
quantified number as to the return they are generating for what may be one of the
largest line item expenditures for an organisation. Added to this a much more
complex environment has been created with a highly fragmented marketplace,
multiple channels, brands and customer touchpoints, along with consumer cynicism
about advertising.

With this myriad of marketplace variables, plus intangible brand variables, models
for marketing ROI can only be very subjective. These models can also be
constructed to place the expenditure and the return generated in the most positive
of light, building a case for additional funds. However, often it is not additional
funds that are required, but a greater effectiveness and efficiency with which the
current funds are being allocated.

1
AFR, April, 2004
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Not all marketing dollars are created equal, and the greatest challenge of today’s
marketer is to drive efficiencies and generate greater effectiveness with their
current allocation.

As a result, the most progressive Marketers are ripping apart the marketing value
chain, and re-examining the traditional marketing model. The new focus is on
precision, and as a result rapidly moving budget allocations to the segments of the
chain that are delivering the greatest business value – both strategy and
measurement.
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Here are six key areas in which you can achieve greater efficiencies throughout the
value chain, including strategy and measurement, to deliver an immediate impact
which ensures your marketing budget is much more effective.

I. Evaluating Marketing Focus

Developing a clear and meaningful focus for any marketing team ensures less
expenditure ‘wastage’ and greater precision in execution. Clearly this focus must
centre around what will deliver towards the bottom line – a clear understanding of
the consumer needs, behaviours, attitudes, and a prioritisation of these target
groups. More often than not, internal agendas begin to cloud this focus with
operations, finance, and other non-consumer focused silos driving what should be
delivered to the market. The consumer ‘bullseye’ must be generated, and provide
the strategic foundation for the marketing team, and be advocated throughout the
organisation.

Questions to ask and issues to raise when creating a greater focus for your
marketing team:

Do we fully understand our target consumer needs, behaviours, habits, living

patterns, and can these be fully articulated by each and every member of the
marketing team?
Have we prioritised our consumer segments, understanding what share of
wallet we can obtain, what value they represent to our category, and how our
competitors excel in engaging with these consumer groups?
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Do we look at our marketplace in the same way in which our competitors
do, and is there a more effective and efficient way to view this window to our
consumers?
Do we have advocates of our consumer groups in each of the functional
divisions in our organisation, and are they able to provide a consumer voice
within their silos?

II. Systems and Processes

Often viewed as a creative inhibitor, particularly within the communications and

advertising world, systems and processes are vital. This ensures that roles and
responsibilities are clearly defined, accountability is clearly communicated and
understood, and goals and objectives are aligned from functional and cross
functional roles, from board level down to individuals.

Developing marketing systems and processes requires a full understanding of the

business planning processes at the most senior level, and how that process will
ultimately drive the goals and objectives for the basis of the marketing plans.
Bottom up zero-based budget planning and forecasting will impact the marketing
groups processes quite differently from top-down mandates for incremental growth
year on year. Environmental factors may also impact these processes, from boom-
time economic conditions when a higher proportion of funds should be allocated to
R&D versus promotion, to recessionary times when the proportion should be
reversed.
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Yearly planning processes with monthly and quarterly checkpoints ensure that all
team members, both internal and external, are on board with the vision and goals,
and are empowered to deliver on these objectives.

Improved efficiency in these planning processes and the systems to support will
maximise all resources, minimise wasted time and money, and provide a clear and
focused direction.

Questions to ask when looking for efficiencies in the planning process:

Have we ever had to completely rethink/revisit/redesign a

campaign/logo/package due to issues that have only arisen at the
executional stage?
At the beginning of the year/quarter/month are we completely clear, and
have we bought into what needs to be accomplished for the upcoming
year/quarter/month? Has that been communicated clearly to my team?
Have our external suppliers ever discussed having more time to deliver
better quality, or expressed frustration at not being involved at an ‘earlier
stage?’

III. Resource Allocation

Resource allocation need not be a guessing game. Business goals and objectives
based on a strategy developed through robust qualitative and quantitative analysis
should be the key driver to allocate these resources: financial, human and time.
This driver should provide the focus of allocation – where and how do we get the
biggest bang for our buck?
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Questions and issues to raise when allocating resources:

Are resources matched to the skills required for delivery, or is it more

economical to outsource to a specialist skill set?
What proportion of the budget or our time is allocated to strategy versus
execution?
Have we re-evaluated our channels to consumers based on changing needs,
new technology, and more effective channels?

IV. Assessing Strategic Partners

Part of a marketing director’s reputation is based on their ability to manage external

resources. The ‘churn and burn’ mantra of some directors in going through external
suppliers often results in challenges down the road regarding sourcing the ‘best of
breed’ partners. Alternately, tables have recently turned as a Singaporean-based
advertising agency recently culled clients when they were not able to generate a
profit margin of 10%.

All strategic partners, from R&D to communications and promotional, should be well
versed in the goals and objectives of your business, and be able to translate these
into pragmatic and measurable action plans. A partnership philosophy based on
transparency and strict corporate governance, while ensuring fair and equitable
profits balanced with performance and the systems to monitor these will provide the
foundation for a win-win relationship.
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Questions and issues to raise when seeking to optimise the relationship:

What is their policy regarding open book accounting and spot-check

evaluation?
Do our communication partners understand our priority consumer needs,
and tailor recommendations around these?
Are they willing to recommend alternate methods for reaching and bonding
with our target markets, or do they automatically provide ‘same-old’
recommendations?
Do they proactively seek to provide initiatives, efficiently use resources, and
provide recommendations which are aligned with our business objectives?

V. Executional Efficiencies

Have you ever gone through an audit to collect all printed collateral and estimated
the waste in replicating production processes? Often, with the left hand not
speaking to the right, a multitude of duplication occurs, and in some organisations,
this represents the quickest win in terms of cost reduction, while also increasing
efficiency. A communication and promotional audit can quickly gather
requirements from all stakeholders, and develop a standardised set of tools and
frameworks. With the goal of reducing duplication and increasing time to market,
this promotional knowledge management system can quickly enable all sales and
marketing teams.

Questions and issues to raise when looking for efficiencies in execution:

Do standardised templates exist for all collateral, and are these templates
being utilised?
What proportion of our budget is production versus media versus strategy?
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How are ad hoc communications managed, and what work flow is in place
to ensure efficiency?
Do our strategic partners work with us to streamline production processes,
even down to paper size and colour use?

VI. Measurement and Evaluation

This is possibly the most challenging exercise in the marketing value chain, as the
results are so often subjective and no industry accepted measurement model
exists. Models must be tailored, as measurement metrics and benchmarking
standards are category and industry specific. This resulting dashboard, which
should have a balance of fiscal and ‘soft’ measurements, will close an ongoing loop
to feed back into planning processes. Or in highly competitive environments such
as Telcos, provide intelligence to make immediate and swift decisions.

Questions and issues to raise when establishing a measurement and evaluation

tool:

How are we using tools, such as econometric modelling or other quantitative

methods, to drive intelligence on media performance into our marketing
planning processes?
Are the measurement and evaluation tools pragmatic and actionable? Do
we walk away from an evaluation presentation with a clear picture of items
to action?
How are we integrating multiple channels, and are these integrated
campaigns working to achieve our objectives?
How are the measurement mechanisms captured into ‘corporate knowledge’
so past learnings build on future campaigns?
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Market segmentation, rapidly evolving consumer needs, fragmented channels are

driving the need for more efficient approaches to linking with your consumer, based
on a solid consumer focused strategic foundation. From business strategy, to
marketing strategy, down to implementation and measurement, the value chain
needs to be ripped apart and rebuilt to deliver greater value. If you are not getting
the result, its because the pieces in the puzzle are in the wrong order, or the focus
is on the wrong piece.

For more information on ‘Marketing Maximiser’ Delivering Efficiency and

Effectiveness from your Marketing Budgets contact:

Robert Shwetz
Principal
BBDO Consulting
Tel: +61 3 8601 1161
M: +61 (0) 400 509 667

robert.shwetz@bbdo-consulting.com.au

www.bbdo-consulting.com.au