Insight, Analytics and the New Marketing
Organizing for Math Marketing
The image above is “The British Beehive”. 19th century British caricaturist George Cruickshank’s used it to describe the hierarchy of labor in Victorian England. Each profession is assigned an individualized place in the social order. Where does math marketing fit into your organization and how do you organize your Math Marketing efforts? The third chapter In the Math Marketing paper discusses the organizational challenges.
In their book The Four Pillars of Profit-Driven Marketing, authors Leslie Moeller and Edward Landry touch upon an interesting area: how should companies organize themselves to become ROI-driven organizations? The authors claim that being good at analytics is not enough. Though fundamental, analytics is only one of the four pillars needed in order to succeed.
The other three are:
Decision-support tools: tools that automatically make the insights from analytics available to decision makers throughout the organization.
Process: full integration of analytics and decision-support tools in all stages of the marketing process, from target setting to planning to execution to postevent analysis.
Organization: an organizational framework that ensures support and resources are in place in order to implement the process.
The authors are right—analytics is doomed to fail unless the following three ingredients are in place: the tools to disseminate the insights from analytics, the process that makes sure analytics is not an afterthought and organizational support. Most companies would acknowledge this. Very few, however, are actually taking the necessary steps to make sure these requirements are met. In my experience, companies struggle the most with the fourth pillar—the organizational framework to support the ROI mind-set. According to Moeller and Landry, there are three main components to establishing the right organizational framework:
1. Leadership: the ROI agenda needs to be driven by CMOs who are well versed in the science of marketing.
2. Center of excellence (COE) : companies need to develop a COE that is the headquarters of the analytical skills required for marketing ROI.
3. New job definitions, training and hiring profiles : all layers of the organization need to be trained and involved in establishing marketing ROI.
Of the three components above, leadership is often the easiest to put in place. Marketers who understand marketing ROI and analytics are much better equipped to prove the value of marketing to the organization. They are also more likely to speak the same language as CEOs and CFOs. With the average tenure of CMOs now at 28 months (versus 53 months for CEOs), there is increasing pressure on marketing departments to hire more accountable marketers who understand ROI and analytics, and will therefore be the most successful and rise to the top automatically.
Establishing a COE for Math Marketing is difficult, and it may become a lot harder in the future. Most companies have some analytical capability in place. It usually resides within a marketing intelligence group that sits within a broader strategy group, often (though not always) as part of the marketing organization. Most of today’s marketing intelligence groups are heavily focused on market research and econometric modeling. They have grown and matured during the years of mass marketing, when research and econometrics were the primary ROI tools. As mentioned earlier, that has been changing rapidly over the last 15 years due to the CRM and digital revolutions described above, which brought with them an explosion of analytical tools. Today’s multichannel analytics team must consist of at least one web analyst, a website optimizer, a social metrics expert, a database marketer, a search analyst, a quantitative market analyst, a qualitative market researcher, a media analyst, a digital media analytics expert, an audience researcher, an econometrician, a data miner and a PR measurement specialist. I do not know of a single company that has a COE staff with this variety of skills. The diagram below illustrates the variety of analytical skills required in our multichannel world. It is the skills matrix for Ogilvy’s Analytics department, a group of more than 200 Math Marketing specialists worldwide.
Furthermore, with new analytical applications being developed at the speed of light, the COEs need to evolve their capabilities continuously. Add to that the incredible scarcity of analytics talent mentioned earlier and we understand how it is virtually impossible for companies to scale internal capabilities that will be able to meet all the ROI challenges of tomorrow. Although the ROI function will never be able to be outsourced completely, the role of external partners is destined to grow in the future, and the right organizational framework will need to be established to support multipartner relationships.
The biggest challenge companies face is to have all layers in the organization involved in establishing marketing ROI. Even if one were able to establish a COE (internally or virtually through partnerships) that has people with all the necessary skills, its value would be limited if it were isolated from the rest of the organization. The main objective of a COE should be to make decision makers, who usually reside outside of the COE, smarter. The COE should provide them the insights, knowledge and tools to make smarter decisions independently. Therefore, if a COE is very successful, it will make itself obsolete. This, of course, has political implications. Very few COE teams feel comfortable with this, and most have a tendency to keep knowledge and expertise to themselves to a certain extent, if only to maintain their status as experts and the job security that comes with it. This is a very natural reaction that can result in tension between COE teams and other parts of the marketing organization. There are two things that can prevent this from happening.
First, it should be clear that the main goal of the COE is to have others in the organization adopt the insights it produces and improve their decision making as a result of doing so. Members of the COE should have this written in their personal performance goals and should be incentivized accordingly.
Second, COEs should strive to automate the cutting-edge work they are currently doing so that it becomes common practice and, at the same time, be given the freedom to continuously push the ROI agenda and pursue opportunities to reinvent themselves. This will require ongoing investment in training and R&D.
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