Marketing Needs Real Innovation From Agencies
According to Advertising Age, he then outlined five things that the industry needs to address "to truly fulfill the potential of our contribution to driving the business" for clients.
Herein is the limitation: The five things were in the marketing communications box. When will agencies and media companies start thinking outside of "their" boxes? When will they start thinking about big "marketing" ideas, not just communication solutions? They represent some of the most powerful resources for innovation, yet they subscribe to self-imposed limitation. Why?
The classic marketing mix consists of the 4Ps: product, place, price and promotion (PR, personal sales, promotion and adverting). And as the consumer's world moves from 30-second spots to total brand immersion, the impact on all elements of the marketing mix is more important than ever before. Yet in reality, we rarely use our agencies' unmatchable creativity in these areas. And marketing needs real innovation from its agencies.
Recently 24/7 Wall St., an equity-investor website, looked at several major systems to determine brand value. Its analysis suggests that the top U.S. consumer brands are Amazon, Avon, Blackberry, Ford, Google, McDonald's and Nike. While all have very strong "promotion" (see definition above), this contends their total brand marketing mix is even stronger: affordability, distribution, variety, convenience, margin.
Fast-forward to March at the 4A's call for marketing innovation as business-driver. If this is the challenge, how can we better leverage our agencies' creativity? How can they help create the steak, not just the sizzle? How can agencies unleash all of their "creativity" for marketing innovation, not just communication innovation?
Service. Years ago, Walmart conducted research that suggested their customers would like more product help and assistance -- like a Home Depot, the expert in the orange apron. Instinctively, the apparent solution was to add staff -- but that would also add significant incremental labor costs. Through strategic brainstorming and additional research, they found that if they could "own" the lowest price, customers would forgo the help. This lead to "Always low prices," their highly effective, 19-year branding campaign, but it was founded in a product problem/opportunity.
Distribution. Y&R, Dr Pepper brand's first and long-time agency, felt it was very important to understand the bottler's perspective on the business. To facilitate, they conducted yearly, in-depth interviews with executives, all the way to the route drivers.
Interestingly, this research revealed that Dr Pepper was an afterthought for the mainly Pepsi and Coke drivers who also delivered Dr Pepper. It also revealed that the drivers were lacking any type of entertainment in their vehicles. Connecting the two facts, Dr Pepper gave each of their Pepsi and Coke drivers Dr Pepper radios -- greatly appreciative, the drivers now almost always "tossed on" a couple extra cases of Dr Pepper, and because it is a highly distribution-driven business, sales grew significantly with very little incremental cost.
Product. When Donald Tyson took over the family poultry processing business from his father in 1971, it consisted of buying chicks from local farmers, raising the birds, dressing as whole broilers and trucking them to grocery stores. As Tyson looked to grow the business, the answer came not in advertising or increased awareness -- it came from a motto that someone posted on the company bulletin board in Springdale, Ariz.: "Do more with chicken."
"We were just processing raw chickens when we first started," Tyson told Robert B. Tucker, marketing consultant, in a 1998 interview. "Then we started making chicken patties, that opened up a whole new area of business for us because people could have chicken sandwiches. We tapped a new market is what we did. Then, of course, we evolved into doing all sorts of things."
Margin and affordability. California's voters passed Proposition 103 in 1988, mandating auto-insurance premium roll-backs and introducing other reforms. Reeling from significant reduction in margin, one company, Progressive, saw an opportunity. Research revealed that the earlier a claim was settled, the lower the cost, especially with significantly reduced litigation. Progressive decided to settle all claims with its clients on the spot, no matter when the accident happens, 24 hours a day, seven days a week. And as they expanded distribution, they had a differentiating savings advantage to pass onto the consumer. Additionally, by settling on the spot, their client satisfaction scores improved dramatically.
These are four simple yet effective examples of innovative "marketing" ideas, driving results. Marketers need real innovation from their agencies.
First, we need to engage with our agencies -- we must establish an atmosphere of welcomed partnership, of openness, of collegiality and respect. We need to actively create access to senior executives and cross-functional departments. We need to promote the frank sharing of information, concerns and even fears. We need to embrace change.
Second, our agencies must be more proactive. As David Ogilvy once said, know your client's business better than they do. How many agency executives can say anything close to that today? CMOs would love to spend more time analyzing industry trends, reviewing their CREST and Nielsen data, visiting their stores -- but they simply don't have the time. They need their agencies to be equal and proactive partners in their business.
As an aside, it is noteworthy that most agencies do provide strategic thinking and planning, however, again, with self-imposed limits. My experience finds that all too often it is applied to the communications and branding, not the overall business. That's a vendor, not a partner.
Finally, we need to change the DNA of our agency's participation -- let's not limit our expectations to only the advertising, or the media, or the tactical elements. Invite them to unleash their creative impact on our total business. Don't let them be time-tellers; encourage them to help build the clock.
Disruptive ideas, intrusive innovation, unexpected reasoning: This is where agencies can add so much more value. Of those 23 big clients who are seeking marketing innovation, I wonder just how many are looking to their agencies for help. Or are even inviting their participation. Marketing needs real innovation from its agencies.
|ABOUT THE AUTHOR|
Mark Chmiel is Denny's former chief marketing officer. He is currently advising private equity in the restaurant space. He can be contacted on LinkedIn.