What does this do to the brand-agency relationship?
Hutchinson: So what does this new environment, or discipline of process, metrics and "hyper-trackability" in modern marketing do to the brand-agency relationship?
Hastings: The old form of agency relationship is at the top of the old S-curve. It's run out of steam.
The new relationship has to be built around integrated marketing: how to get the most Brand Engagement Points (BEP) from the array of communications, website contacts, CRM, trade shows, word-of-mouth, product placement and product-in-use experience, all at the most efficient cost per BEP.
That requires a complex integration algorithm, and it requires a single role of integrator.
It remains to be seen if any agency can operate the new algorithm. They can run the model and do the math, but can they play the integrator role? That requires the objective allocation of dollars between all the methods of contacting the customer for engagement. It requires that the choice of contact precede the choice of creative theme, a difficult shift of priorities for agencies.
It was thought that the creation of the new conglomerates like WPP and Omnicom would offer integration to the client but it has not happened yet. We see the integrator role being played inside the client organization. That makes the agency just one of a choice of vendors, and a choice that is governed by scientific resource allocation methods.
On what will the new relationship be built? We believe it will be in efficiency (cost of service optimization) rather than creativity. We don't see a lot of agencies stepping up to the plate.
Hutchinson: Perhaps these pressures between the new and old S Curves are also contributing to the grim statistics we keep seeing from Spencer Stuart, wherein the average tenure of today's CMO keeps dropping: from 23.6 months in 2004 to 23.2 months in 2006?
Hastings: The CMO is not a real "C" in many organizations. The idea of having a head of marketing on a par with the CFO, CTO and so on is a vaguely nice concept, but the responsibilities are not well defined.
And the reason for that is that most CEOs don't understand marketing and its role in the corporation. They appoint CMOs and expect some kind of a miracle to happen, such as great PR or a brand turnaround, and get impatient very quickly when it doesn't happen. They fail to think hard enough about the organization design, process, technologies and other needs of the CMO to have a true impact.
There's a ton of resistance to CMOs from business unit heads who want command of their P&L and budgets. Unless organization design and process design ferrets this out, the BU heads will win.
Hutchinson: Your book, "The New Marketing Mission," was the first book I had ever read by a group of marketing executives to deliberately include the practices of project and program management as a means to organizationally align or "re-shape" the company around customer insights and brand.
Typically, marketing and project management have been diametrically opposed cultures and communities. Is enterprise marketing management changing this?
Hastings: Enterprise marketing management combines process, metrics, organization and technology. It employs one sub-process to generate insights and another, linked sub-process to go from insights to innovation, and a third sub-process to get the innovation to market. It develops repeatable capabilities and models such as product launch models that can be used again and again as templates. It absolutely uses project and program management principles, tools, methods, measurements and technologies.
When you see the new organizational construct of Marketing Operations popping up in technology companies, those are built on project and program management principles.
Marketing Operations will be a new dominant paradigm in marketing: highly disciplined, highly scientific, highly measured, highly enabled with technology. The old idea of marketing as an ad hoc, "pull it out of thin air" creative artistry is dead. Creativity has its role, but it plays the same role as it does in architecture: it's a contribution to a scientific and technically robust engineering process that produces a building that is beautiful but also functional, reliable, and built on a solidly engineered foundation.
Additional resources:
Listen to a podcast of Hunter Hastings' ad:tech session.
Download the PowerPoint presentation.
David Hutchinson is Senior Vice President of Program Partners. Read full bio.