The golden age of marketing lasted for most of the 20th century, when W.K. Kellogg's invented and commercialized cereals, Coke became ubiquitous, soap operas were sponsored by Procter & Gamble, agencies were run by huge personalities and companies were all about marketing. When did the marketing empire decline and why did marketing lose its crown and what, if anything should be done about it?
There is, of course, no single date or reason for the decline of marketing. But I would suggest that the decade of the `80s is about the time when marketing began its descent. I propose two simple reasons for the decline of marketing. The first was the increase of low-cost competition, in the form of retailer private-label and low-cost imports, combined with the fragmentation of media (and increase in the cost of reach). This combination meant it now cost more to market lower-margin goods, resulting in the decline in marketing-driven profitability.
During the `50 and `60s, when marketing worked as planned, marketers could create brands in a decidedly friendly environment, with limited competition allowing higher prices, and using tools, such as the 30-second spot, that were fast, efficient and effective while dictating terms to the retailers. It was easier to be a marketing hero back then.
The simultaneous increase in competition and decline in communication effectiveness succinctly ended marketing's reign.
The `80s and `90s were characterized by a search for leaders to fill the power vacuum left by marketers. Management fads came and went, from re-engineering to efficient consumer response (ECR) to the balanced scorecard. Each suggested that by doing this one thing results would return to previous glory. While many of these ideas were important contributors to business improvement, none could claim the marketer's vacant throne.
focus back on marketing
The marketing era was characterized by long-term leaders at the head of the most prestigious companies and their ad agencies who often ruled for decades. That era has been replaced by a time of rapid CEO and marketing churn, with leaders coming and going every few years and a rise of non-marketing executives to the tops of the world's most respected marketers. WPP (O&M, JWT and Y&R) was created by a financial wizard. ConAgra is being overhauled by a lawyer. Burger King has had 12 CEOs in 15 years.
Agencies that used to be powerful partners in decades-long relationships now are reduced to stewards of this year's advertising campaign in advance of next year's pitch that very well may be run by a procurement department. Agencies have lost respect.
This article recommends returning marketing to the forefront, despite its lower effectiveness, because a marketing-driven business will over time always outperform businesses powered by financial, legal, diversification or other drivers. Once you stop marketing and focus on other things, the base ultimately falls out from under your business.
A renewed marketing focus can bring a business back quickly. Look at the ill-fated diversification by McDonald's into Donatos Pizza, Boston Market and Pret a Manger. Funds needed for maintaining and upgrading the core proposition went elsewhere while service and quality suffered. A seasoned marketer, it is successfully ridding itself of distracting businesses and upgrading menus and locations.
Look at the Gap. After 20 years of growth based on basics, a disastrous detour into cutting-edge fashion brought it to its knees. A return to basics has reinvigorated business. Sales, margins and profits are all up sharply.
sort out the core
Sort out your core business, stay focused and be consistent with your people, propositions and agencies. Reinstate marketing as your corporate growth engine.
A new breed of marketer is arriving. This is a marketer that combines creativity with marketing accountability. Unproductive investments are measured and are replaced by more productive techniques. Before, marketing excellence was judged solely by the content of the marketing. Now marketing must be judged by its contribution to shareholder wealth.
It is time for marketing to recover confidence and quit being apologetic about increased competition and lower marketing effectiveness. Yes, it's harder now. But marketing is the only way forward. Maybe 15% growth rates are no longer possible, but 10% is achievable, and that is better than the certain collapse related to churn, diversification, inconsistency and trying to lead without marketing. Marketers that can recover their leadership and add return on investment skills to their portfolio will reclaim their place at the head of the boardroom table.
Long live the king.
About the author
Jeffrey Merrihue is global managing partner, Accenture Marketing Sciences, London. In over 20 years of international marketing experience he has worked in Europe, North America and South America.
