$137.8B U.S. ad spend for top 200 advertisers
When it comes to digital marketing, marketers are like trapeze artists trying to grab the next bar without letting go of the last one, and the results could be embarrassing or dangerous as Kimberly-Clark Corp. Chief Marketing Officer Clive Sirkin sees it.
Despite growing investment in digital marketing, marketers are still clinging to methods and models better suited to analog TV advertising, Mr. Sirkin said in an interview, previewing his keynote speech at the Advertising Age Digital Conference April 1.
Kimberly-Clark, maker of Kleenex and Huggies, is a top-100 advertiser in the U.S. with measured spending of $404 million on advertising in the U.S. in 2012, the last figures that are available to Ad Age Datacenter.
Among those outdated concepts is the effort to keep the ratio of so-called "working to non-working media" constant, Mr. Sirkin said. In this notion, paid media is "working," while the staffing, agency, production and research costs used to create advertising for paid media is "non-working."
"You still hear about the 80% working to 20% non-working" ratio," Mr. Sirkin said. "And that's ludicrous, because that's impossible.
The definitions that separate the two no longer-apply, he said, since production costs for digital and social media content are integral to creating content people want to share, which leads to distribution. Generally, digital and social media have lower media costs and higher production costs relative to TV, so hewing to the old ratio as budgets shift to digital becomes ever harder.
Some marketers, such as Unilever, have been vocal about efforts to raise their ratio of working to non-working media despite growth of digital and social media in their budgets, cutting the number of ads they produce to accomplish the goal. And while agency executives such as Bryan Wiener, chairman of 360i, have criticized the notion, Mr. Sirkin is a rarity among high-profile packaged-goods marketers in taking the stance.
Many marketers also fail to truly embrace digital, he said, because they "hold themselves hostage to the assumption that they must have mass broadcast media to drive mass awareness" and use digital for "activation" or promotion, such as coupons, contests or other efforts to close the sale. Such thinking has led to digital marketing that runs parallel to the core effort rather than being part of it.
Don't start with TV
"I'm not saying we're going to get out of TV," Mr. Sirkin said. "We're going to release ourselves from the constraint that you have to build your model from a TV mass base."
That entails budgeting without set percentages for media. In a related effort to evaluate all media in a similar way, Kimberly-Clark has outfitted all of its locations with "smart walls" with monitors that display data feeds not just from social or digital media but also tracking offline media and sales.
"The value is in the synthesis, not the optimization of individual pieces," Mr. Sirkin said. Growing efforts to optimize media on the fly and lessen reliance on TV is making Mr. Sirkin rethink the value of upfront TV buying, he added.
Reshaping K-C for a digital world also means investing more in "digital IQ" for everyone from new hires to senior management, he said, with Chairman-CEO Tom Falk among the most avid learners.
"We need to change the way we screen and hire," he said. "We're changing the expectations of what a front-line marketer does so that [digital] is not seen as an exercise done by a small group of experts."