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SapientNitro Global Marketing Series: Part One - CMOs Reveal Obstacles To Global Marketing
SapientNitro Global Marketing Series: Part One - CMOs Reveal Obstacles To Global Marketing
Obstacles
tO SuCCeSSful GlObal MaRketinG
article
exeCutive SuMMaRy
CMOs are struggling to adapt to a world that is fundamentally different from when they started their careers. Disruptive digital technologies and the new expectations of the global consumer are forcing global firms to adjust and innovate. At SapientNitro, we have made a significant effort to understand how these changes are impacting large global organizations. What we found was surprising: just 15% of senior marketers are prepared to deal with the rapidly changing consumer, and just 8% believe agencies are succeeding in their support of global brands. This should be a wake-up call for global marketers. To further develop an understanding of the causes and implications of these trends, we have conducted a 6-month study of 114 CMO-level marketers, including oneon-one interviews with former or current CMOs including The Home Depot and Intercontinental Hotels. Our research has culminated in three articles. The first is focused on identifying the obstacles, and understanding the implications of these new challenges. The second posits a new Global Marketing Mindset of the future CMO one more comfortable with technology, consumer insight, analytics, and multi-disciplinary strategy teams. The final article explores the implications of these trends for agencies how agencies can better support large global brands; it also points out major areas where they are currently failing. Together, these pieces represent our perspective on the future of global marketing. While it is a challenging future, it also is full of opportunities for innovative, adaptable, and entrepreneurial leaders and businesses.
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intROduCtiOn
Global CMOs and senior leaders are facing distinctive new challenges, which have arisen just in the last few years. Amid this wave of disruptive technology and its application to building multi-channel experiences, marketers are reinventing their tools and approach. In our research, we identified five significant and new challenges: disruptive technology, the connected consumer, the localization challenges of digital, the challenge of global multi-channel projects, and a mismatch of organizational structures. In total, these trends are driving a new marketing environment, which is dramatically more difficult than even five years ago. For example, it is much more difficult to manage your global brands across disruptive technologies of social media, mobile apps, and in-store digital experiences. recent developments in multi-channel digital experiences offer opportunities to grow revenue and connect with consumers, but require investments much too large for a single market. It is clear we live in a time of major new challenges for global marketing. In the following sections, we will explore the nature of the challenge, and also note the implications of each.
Gartner 2012
FIGure 1:
FIGure 2:
43%
45%
88%
15%
50%
32%
82%
9%
FIGURE 1 The core challenge for todays global marketer: global marketing is recognized as more important than 5 years ago, even as global and local marketing distinctions break down. Source: Q2 2012 online survey to 114 senior marketers with global responsibilities
FIGURE 2 To survive in the new marketing world, marketers must be flexible. yet a minority of marketers feel prepared to deal with integrating their marketing activities to reach these consumers. Source: Q2 2012 online survey to 114 senior marketers with global responsibilities
The implications of these new disruptive technologies are clear. First, the new global CMO will have to be much more knowledgeable about technology in the future. In our survey, we compared CMOs who assessed themselves as technology-savvy with those who did not. What we found was that technology-savvy marketers felt twice as prepared to manage these changing consumer trends as those less savvy. In addition, we saw differences across the board in how these new CMOs thought about their marketing opportunities. They placed a higher importance on global campaigns, they recognized the importance of centralized IT infrastructure investment, and they appreciated the interconnected nature of the consumer. It goes beyond understanding these new technologies the future senior marketer must also assemble the right team to use analytics and deep consumer insights to make the right decisions that drive the business forward.
For example, viral marketing, social media, online communities, amplification, and buzz management are designed to spread as widely and broadly as possible. As a result, many assets designed for one country or one consumer are now rapidly shared around the world. Mobile apps, creative imagery, and regionalspecific prices all are now visible globally. Consumers are even ordering products from one country, and then reselling them locally. The implication of these obstacles for global marketing is significant. Global marketings core challenge has traditionally been delivering relevant messages to the local market. But digital tools and platforms make this more challenging additional assets, more campaigns, and faster change only add to the complexity. Digital marketing platforms 2 meant to boost efficiency also impose constraints. The new global consumer requires a delicate dance of local, regional, and global campaigns simultaneously.
2
For more on digital marketing platforms, see the article Digital Marketing Platforms: Taking Back Control by Dan Barnicle.
FIGure 3:
NON-TeCH SAvvy
% who strongly agreed
DIFFereNCe
55%
29%
+25.4%
43%
24%
+19.5%
FIGURE 3 Much of the new breed of CMOs emphasizes the importance of deep technology knowledge on top of marketing expertise. How do these marketers think differently from traditional marketers? Most notably, according to our survey, they recognize that the importance of managing campaigns globally is much more important than it was just five years ago. They are impacted by these changes more than nontech savvy marketers. They also note the importance of global funding of back-end infrastructure and the challenges on changing consumer behavior. Finally, theyre less concerned about creative capabilities when selecting agency partners relative to non-tech savvy CMOs. Source: Q2 2012 online survey to 114 senior marketers with global responsibilities
The interconnectedness of todays consumer is breaking down the barriers between global and local marketing. Our global marketing organization is prepared to deal with rapidly changing consumer trends around digitalization and globalization. Building our brands Social Media communities is best managed at a global level.
40%
24%
+16.3%
23%
12%
+10.9%
28%
18%
+10.4%
How important are each of the following capabilities when selecting agency partners?
Cross-channel expertise in both digital and traditional commerce
46%
24%
+22.7%
4
:)
Best-in-class creative
52%
71%
-19.0%
Tech Savvy is defined as those who agreed or strongly agreed to the statement I consider myself to be very knowledgeable about technology (e.g. the back-end infrastructure for marketing programs)
WE WATCH TV ONLINE
FIGure 4A:
39%
49%
89%
deSpite MuCH talk Of a GlObal COnSuMeR, tHeRe iS nO SinGle MOdel Of GlObal beHaviOR
FIGure 4B:
Q: What are the most important global trends in marketing that will impact your business in the next 3-5 years?
explosion of Social Media
46%
#1
The regional flexibility has to be there. We have to support localization due to consumer differences, or brand equity maturity differences The trick is to find the sweet spot where a campaign is only partially planned.
Senior Latin American Marketing Director, CPG, experience: North America, Central America
44%
#2
And tensions between local and global organizations challenging for 82% of senior marketers are not making it any easier. recent developments in digital platforms have, in many cases, placed local marketers on the defensive; once masters of their own digital domains, many are increasingly constrained by these tools. And theyre pushing back. Perhaps this is why 38% report that tensions between global and local organizations regarding roles and authority will be more challenging in the next three to five years.
41%
#3
Clearly, digital marketing platforms are both a solution and a constraint. But other internal challenges exist, which include a lack of strong in-house digital expertise to customize campaigns locally. The implications include an increased investment in new digital tools such as the digital marketing platforms and increased efforts to consolidate global agencies. Localization remains critical, but these new tools are becoming essential in order to optimize the local and global customization of campaigns.
3
FIGURE 4B Managing global campaigns in the new global and digital world was identified as a key challenge. In particular, social media, and blending online / offline experiences were key global marketing challenges. Source: Q2 2012 online survey to 114 senior marketers with global responsibilities
Culture Clash: Globalization Does Not Imply Homogenization, Millward Browns POv, May 2009.
FIGure 5:
COpinG witH a GlObal COnSuMeR wHO HaS a StROnG ReGiOnal SubCultuRe iS a key challenge
exPeCTeD CHANGe IN 3-5 yeArS
TODAy
% responding moderately or extremely challenging LeSS Tailoring campaigns to local values/ customs/ norms
MOre
LeSS
MOre
GlObal
78%
13%
35%
8%
34%
Tensions between global vs. local organizations regarding roles and authority
82%
12%
42%
12%
38%
FIGURE 5 Tailoring and customizing your marketing to a local market is moderately or extremely challenging for marketers today. And four times as many marketers believe it will be harder in 3 to 5 years rather than easier. Source: Q2 2012 online survey to 114 senior marketers with global responsibilities
ReGiOnal
lOCal
At a recent Forrester Multi-Channel Conference, Laura WadeGery (executive Director, Multi-Channel eCommerce from Marks & Spencer), noted that boosting the in-store teams comfort with multi-channel was key; she emphasized providing desktops in staff restaurants, and making sure incentives from online sales were linked to individual store performance. The result was a confirmation of the value of multi-channel. Wade-Gery noted the more different touchpoints customers are engaging with us, the more theyre worth
to us, saying that multichannel customers were worth 4x as much as those who connected only with one channel. The bottom line is that too many global marketers have not overcome the challenges in speed, cost, and flexibility of truly global multi-channel marketing. until senior marketers embrace and invest in global multi-channel platforms, they will continue to miss out on the substantial benefits of cross-channel experiences.
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FIGure 6A:
TODAy
% responding moderately or extremely challenging
effective global (and regional) marketing in the 21st century is often best done through multiple channels and devices; today the modern consumer is integrated, and multichannel customers generate up to 4x as much as those who shop through single channels 4. But why have marketers been so slow to adapt? First, the global or regional leadership at many large multi-nationals is very comfortable with traditional single-channel campaigns (e.g. Tv). These campaigns remain very effective, can be fairly well measured, and have tremendous reach and scale. Second, digital skills are too often splintered globally across companies and agency partners. A proliferation of specialized partners, and strong organizational silos, result in substantial coordination costs to build sophisticated multi-channel campaigns. Third, many agencies driving global creative and marketing strategies are not as familiar with the digital tools available especially in-store and multi-screen experiences. For example, building the MetLife Stadium experience in which visitors to the NFL Meadowlands Stadium (home of the u.S. National Football League franchisees - the Giants, and the Jets) are able to engage with the brand on 52 LCD displays, enter into various contests and games (e.g. take pictures of themselves with Jets or Giants painted faces) - required knowledge of various touch-screen, SMS, and ecommerce tools. Building these digital experiences is expensive, which further slows the rollout. In the end, it will be a slow process to maturity for executive leadership, in-house digital, teams and agencies, global multi-channel marketing campaigns will be the standard, not the exception.
4
LeSS Coordination of marketing efforts across multiple traditional media and digital channels
MOre
LeSS
MOre
82%
11%
53%
15%
43%
FIGure 6A:
BuT MArkeTerS HAD MIxeD MeSSAGeS ABOuT WHeTHer TO CeNTrALIze Or ALLOW LOCAL CONTrOL
Disagree or strongly Disagree
Multi-channel commerce initiatives are best coordinated at the global level (e.g. e-commerce, mobile commerce, kiosks, in-store, rewards programs).
23%
20%
57%
Local markets should have substantial independence in controlling their marketing mix.
15%
21%
64%
FIGURE 6A/B Operationalizing multi-channel marketing is hard few marketers have figured it out. These data also revealed a central tension the desire for commerce initiatives to be centralized, while local markets should have substantial independence. Source: Q2 2012 online survey to 114 senior marketers with global responsibilities
In fact, among marketers who have a high degree of technology savvy-ness, there is a greater realization of the importance of close collaboration (61% vs. 41% strongly agree among those two groups (tech-savvy and non-tech-savvy respectively)). unfortunately, lack of coordination is quite common. One interviewee at a large automotive manufacturing firm noted completely separate interactive marketing and traditional marketing departments. Furthermore, a third group IT remained disconnected. everything in interactive is run by (reviewed by) the marketing team. It should be a combined marketing and IT team. The combination of silos of expertise, the high cost of digital, and country managers unwilling to adapt shared platforms and standards result in the global marketing team struggling.
83% Of Marketers agree that inVestMents in Digital haVe increaseD the iMPOrtance Of clOse cOllabOratiOn betWeen it anD Marketing.
FIGure 7:
TODAy
% responding moderately or extremely challenging
LeSS Coordination between digital and traditional marketing teams Gaining access to the appropriate skills and people across the organization
MOre
LeSS
MOre
75%
16%
56%
24%
37%
77%
13%
36%
18%
38%
MObile
FIGURE 7 Coordination across teams not just across marketing channels surfaced as a key obstacle to effective global marketing. Senior marketers reported that digital and traditional coordination is much more difficult than it was five years ago. Geography, language, skills and internal politics all conspire to create silos which reduce marketing effectiveness and increase costs. Source: Q2 2012 online survey to 114 senior marketers with global responsibilities
it
stOre
Marketing
SuMMaRy
The global marketing landscape continues to evolve. Senior marketers are confronting old challenges with new tools. In this paper, we identified the core challenges facing these new, technically adept senior marketers. Many of these new marketing methods are increasing the challenges faced by global marketers. From viral marketing spreading beyond the original country, to instore experiences that are too costly to develop country-by-country, to security concerns about sharing Personally Identifiable Information, new digital marketing methods are shaping how senior marketers operate. The future CMO will require a new set of skills and an entirely new mindset to operate effectively in the new global environment. Our second article in this series, The New Global Marketing Mindset, explores details of the five major elements of the new mindset to allow your business to operate effectively in this changing world.