Whiteboard

The past year has seen some shifts in companies’ attitudes towards marketing.

When recession hits activities that do not deliver direct to the bottom line, such as marketing, corporate social responsibility and training, these activities are often cut back drastically or even stopped completely.  This was certainly the case in the recession of the early 1990s.

However, this time around, when faced with average internal cuts of 20%, marketing departments appear to be working hard to re-focus their efforts so that they deliver a far more visible return on investment. It is not just a case of slash-and-burn but stop-and-think.

The pain in the market may not be all that it appears – instead of cuts that will simply see a catch-up in funding when recovery comes, we may be seeing a re-orientation of effort.

More cash may be being removed from conventional agencies than the reported gross budget cuts imply but funds may equally be being redirected into the learning curve required to manage participation in the new communications technologies. As things stand, the evidence is still largely anecdotal.

Nevertheless, recent Forrester research highlighted that, faced with these cuts, Chief Marketing Officers were shifting away from traditional plans and diverting marketing spend into different channels in order to communicate directly with customers.

Even the best of us cannot claim to understand perfectly how the new channels work to build sales or brand or how different channels can be integrated together. There is a lot of suck-it-and-see out there and experimentation means some caution on spending to offset the emphasis on multiple risk-taking with ideas and projects.

Forrester’s research was no surprise to us. These findings echo conversations with our own clients. Many have not stopped marketing - they are just doing it differently. The change in approach might be attributed to two factors:

• self-evidently, marketeers need to demonstrate a better return on investment in the current climate and old media are beginning to look expensive compared to their upstart rivals; and,
• they need to be able to communicate more effectively in a market where customers have many more choices of channel for their own information needs.

Marketeers need to deliver measurable results quickly on a reduced budget while cash remains the main concern of the finance department.

For many, it is about unlocking the hidden value in their existing customer base (rather than seeking out new investment-heavy markets) and strengthening their brands so that customers choose theirs rather than seek to exploit the current situation and drive down prices or go to ‘cheaper’ alternatives.

It is a strategy that Pendry White has also been pursuing. Pre-crisis we would do a lot of face-to-face networking. Now we are complementing these efforts by building up our networks online through B2B channels such as Linked In. 

For us, the virtuous circle lies in content distributed through new channels that reach our current networks (and their networks) more effectively. These networks then create debate and discussion that generates new content that … and so on.

We are a business based on consulting in a rapidly changing world and this contains inherent risk for us. Fortunately, many of our competitors seem locked into systems more appropriate for a world of heavyweight print media and centralised command-and-control. Since both of these aspects of communications are under threat, we feel confident that we are ahead of the game here.

We have also changed the focus of our previous direct contact programmes. We have long since given up on direct mail , costly, difficult to tailor and slow to reach the intended recipient.

Instead, we have been sending out email bulletins and getting instant responses because we make sure that they are not just e-versions of the printed page but are geared to the new media. Useful content (not the usual sales patter) is reachable through a click to the web with minimal glossy photography and design that slows down read-time on receipt. Our brand here is our thinking process. The prettification of our service is less important than having the service in the first place.

Above all, we have concentrated on this virtuous circle of content -> channel -> target. We have been leveraging the benefits of blogs (not just Whiteboard but that of our political and international affairs associate As It Happens and private LiveJournal, LinkedIn and Facebook presences), filtering the content through to our networks, groups and followers online. We are not afraid of having different Twitter accounts targeting not volume followers but followers relevant to our market. We even have an internal guidebook that makes it clear how they are to be used.

Our aim is a direct conversation with our own clients and prospects, a friendly conversation where it is safe to raise almost any problem or issue with us and know that we will not try and grab it willy-nilly but will give best advice – even refer it on to others.

This raises an important issue of business integrity. The very complexity of the new channels and their community ethos means that the old system of selling at someone, taking the business and hoping you can service it with a bit of intelligent ducking and diving is now far too risky – errors will get publicised. Nothing can be swept under the carpet any more.

While investing in new or non-traditional channels may be uncharted territory (we know that we are wasting some time, though little capital, in our experimentation), this investment is certainly something that everyone in the marketing industry will have to embrace at some point in the near future. We do not mind at all being in the experimental vanguard.  

Is this a marketing revolution? We think this revolutionary aspect is being exaggerated by over-enthusiastic special interests. Whilst marketers are changing the way that they do things, the new channels will (at least for a while yet) complement rather than completely replace traditional channels.

Print media, for example, are in serious trouble and their future is dire but information provision through online media is not so drastically different in style while broadcast looks set to strengthen its hold on the market both with the broadband revolution and the integration of home entertainment and the internet.

The new tools, especially those related to networked online communities and to new forms of global messaging, will be added to the communications mix. They will complement existing activities.

All in all, this is a major change, a massive correction, in marketing communications but, when the dust has settled and what may be a painfully slow recovery has got under way, the new marketing landscape will be different but it will be well within the ability of marketing professionals to manage and exploit. We’ll see you on the other side!

If you would like to discuss the issues raised in this posting, please comment or contact Roger White on rwhite@pendrywhite.com