Marketing is under increased pressure to demonstrate its contribution to bottom line performance. Beyond justifying marketing expenditures, chief marketing officers (CMOs) and brand managers must look for new opportunities to help grow the business. To find these opportunities, many consumer products (CP) companies are finding success by enabling greater collaboration between marketing and IT.
While marketing and IT have historically had a fractious relationship in some companies, the times are changing. As the saying goes, adversity makes strange bedfellows (1). Greater pressure on margins, shifting consumer loyalties, and increased global competition is driving the need for a stronger alliance between marketing and IT – and the technology exists to enable this collaboration with great reward.
Making the case for greater collaboration
An article published by McKinsey & Company points out how natural it is for CMOs and CIOs to team up. CMOs have an unprecedented amount of customer and consumer data. The CIO has the expertise to create the Big Data backbone needed to generate insights that can help increase revenue and profits (2). By working with IT, marketing can leverage Big Data more effectively to identify new business opportunities. In fact, many CP companies are appointing digital marketing officers and people in similar roles who are taking the lead in creating this bridge to facilitate greater collaboration.
The new marketing currency
As the trend in marketing shifts to embrace partnering with IT and greater value is placed on data, perhaps another shift is in order. Namely – how marketing is measured.
Marketing has historically been measured in terms of the amount of money spent on advertising. When launching new marketing campaigns, large CP companies will spend millions of dollars on market research, media buys, and creative development. Perhaps marketing value should instead be measured in bytes (terabytes and in some cases, petabytes) – with data being the new dollar.
Instead of trying to measure reach and frequency and optimize gross rating points, perhaps the better measure would be the volume of smart data generated by a marketing campaign. The key word here is “smart.” CMOs together with CIOs need to identify the right data that enables the right decisions to support bottom line performance and business outcomes, such as sales and margin. This is a provocative idea that drives home the importance of using data more effectively.
Not just any old data, we want smart data
It’s relatively easy to generate an abundance of data. Omnichannel marketing strategies that reach customers and consumer across multiple touch points generate a huge volume of data. But not all of this data is useful. An overabundance of irrelevant data just creates noise. You need to be selective so you can extract meaningful insight that drives business results.
Using the right data and tools for analysis, you can reveal hidden opportunities to grow even when it seems there are no opportunities at a macro level. By taking a closer look at market data at a more granular level, you can identify pockets of growth opportunities. For example, demand in developed markets may appear to be flat. But by analyzing market data by geography, you may uncover some regions of peak demand that rival growth opportunities in emerging markets. (For an example that uses demand for beer in the US market to illustrate this point, see McKinsey & Company’s article: Three myths about growth in consumer packaged goods.)
Enabling technology-led transformation
Through collaboration with IT, leading CP marketing departments are experiencing technology-led transformation. The right technology enables them to collect the right data and run analysis in real time to enable decisions that improve marketing efficacy.
With marketing and analytics solutions from SAP, you can analyze data in real time, derive insight, and make this insight actionable to drive targeted marketing activities. Applying this data effectively enables CP companies to transform marketing processes in fundamental ways that enhance value and create opportunities for growth.
Learn more about marketing and analytics solutions from SAP.
Feel free to share your views with me about this topic in the comments below.
(1) Early 17th-century saying meaning that difficult circumstances will bring together very different people. Oxford University Press. http://www.oxfordreference.com/view/10.1093/oi/authority.20110810104321662
(2) Matt Ariker, Martin Harrysson and Jesko Perrey. Getting the CMO and CIO to work as partners. McKinsey & Company. August 2014. http://www.mckinsey.com/insights/business_technology/getting_the_cmo_and_cio_to_work_as_partners