A perspective of marketing activities in the current economic client. Understanding the drivers of business to influence the impacts on budget cuts and marketing activity.

1. Marke&ng in a recession:
If I ignore them, will they just stay?

2. The man who stops adver0sing to save
money is like the man who stops the
clock to save 0me.
Thomas Jefferson.

3. SPOT the disconnec&on

4. Shareholder value
EPS
Customer contribu0on
EBITDA
Compe00ve differen0a0on
Top‐line growth
Margin
BoEom‐line growth

6. Awareness
Predisposi0on
Reach & Frequency
Response rates
Open rates
Click throughs
CPM, CPC, CPA
Net promoter scores

9. ques&ons you
should be able to
answer

10. If your marke0ng budget is
reduced by 10% what
impact that will have on business
growth?

11. On what basis are your
objec&ves set each year?

12. Do you know the geographic
impacts of your marke&ng?

13. Can you iden0fy your media
returns by channel?

14. At what point does your marke&ng
investment tail off?

15. Beware of the propaganda

17. Ar7cle extract:
The experience of General Motors provides an excellent example of the need to match problems to solu0ons
that will work. President Barack Obama was insighQul when he insisted that Rick Wagoner be replaced as CEO
of General Motors before any bailout funds were offered to GM. Mr. Wagoner had spent several years trying to
make GM profitable by reducing costs at every opportunity, including huge cuts
in the marke0ng and adver0sing budget. That strategy clearly did not work for the following reasons:
Lost market share. GM had 52% of the automo0ve market in the late 1960s but only 24% in 2008. It
was profitable when its market share was high but not when its market share was cut by more than half.
Costly cost cuHng. Closing factories saves opera0ng expenses but s0ll affects the balance sheet: Fewer
• 52% share with popula0on of 190 million in 1965 vs 24% of 305 million in 2008?
factories means fewer vehicles manufactured and available to sell, yet the factory remains on the balance
sheet. The return on investment on a closed factory is zero, but its liquida0on may take years. Closing a factory
• 3 core brands in 1965 – Ford, Chrysler, GM – how many now when considering
is expensive. So is restar0ng one.
luxury, European, Asian products
• This argument may not have the necessary trac0on without underlying $$$$’s….
Ignored product planning and life‐cycle &ming. If product research and development is cut
in difficult economic condi0ons, the company may not have sufficient new products coming on line to augment
the product porQolio. This results in too many mature products subject to high price compe00on, low
profitability and not enough new products in the growth stage of their life cycles.

18. cost‐based solu0ons
DO NOT always solve
demand‐driven problems

19. What gets cut when there is a
budget downgrade?
Media channels don’t have a
linear rela&onship.

21. CMO CURRENT INVESTMENT FOCUS
Source: Epsilon’s 2008 CMO Survey ‐ 63% of the 175 CMOs and markeJng execs surveyed report that their spending on
interacJve/digital markeJng has risen, while 59% report a decrease in tradiJonal markeJng spend

22. MARKETING INVESTMENT
 To offset budget cuts, CMOs are shifing to more targeted and
measurable marke0ng strategies.
 To determine target market for each channel:
 50% said they use data‐driven marke0ng techniques
 31% stated they use sophis0cated modeling tools to analyze exis0ng customer
data (behavioral, preference and demographic)
 19% said that they analyze past purchase behavior
 In contrast, 28% said they made “rough es0mates based on past experience.
Source: Epsilon’s 2008 CMO Survey

23. New research commissioned by News Digital Media has revealed that
accountability is the top issue facing marketers today. The study, conducted by
research company Core Data of more than 288 marke0ng professionals, showed
that marketers are experiencing greater scru&ny
from management with the majority of
respondents (61%) saying they were required to
show more accountability in their decision making
as a result of the downturn. It also revealed that repor0ng cycles were becoming
shorter term for a majority of respondents (57%) and that planning cycles span
less than six months for 66% of marketers.
Source: B&T Magazine, July 2009

24. CHANGES TO TIMEFRAMES
Source: News Digital Media Insights Report, July 2009

25. CHANGES TO THE MEDIA MIX
Source: News Digital Media Insights Report, July 2009

27. Is reten&on the new
acquisi0on?

28. Brands that increase adverJsing
during a recession, when compe0tors are cukng
back, can improve market share and return on
investment at lower cost during good economic
0mes…
Prof John Quelch, Harvard Business School

32. Is there a marke0ng investment strategy?

33. Do things change if you look
customer‐
through a
centric lens?

34. Think
through
targe0ng

35. EXECUTION = 10%
PROPOSITION = 30%
‐ WHAT TARGETING = 60%
‐ ACTION ‐ WHO
‐ NEEDS ‐ WHY
Source: Drayton Bird ‐ WHEN

36. IT’S NOW ALL ABOUT REACHING THE
CUSTOMERS WHO COUNT
NOT
COUNTING THE CUSTOMERS YOU REACH

37. So if its not you controlling the
MESSAGE then who is?

38. UNDERSTANDING HOW ENGAGED
ENTERPRISES REALLY ARE
• 1% of customer conversa0ons are assimilated as
organiza0onal knowledge
• 9% of customer conversa0ons touch the organiza0on, but no
learning occurs
• 90% of customer conversa0ons never touch the organiza0on
Greg Oxton from the ConsorJum for Service InnovaJon (CSI)

40. Source: h^p://www.flickr.com/photos/jm3/98030303

41. What can happen in one day……

42. The “power” of Social Media

48. Icerocket shows a commenters “influence”
through the number of followers they have
17 pages of comments – in 12 hours
40 comments to a page

49. Not all comments
were cri&cal

56. All of this in a day – a response
delivered late afernoon so
now dealt with?

57. OK – all fixed. Or is it?

59. Leverage crea&vity and
customer insights…

60. Crea&ve use of market condi&ons
extended into product offers

61. Making a (consistent) point.

62. Did someone say FREE?

65. Changes in
channels

67. COMMBANK
CMO TAKES
DM “JUNK”
TO TASK

68. “Most direct marke&ng is
junk. It’s dumb because it’s lazy
marke&ng, it’s void of data
insights and has no clear
targe0ng, no clear offer, and
no real reason for customers
to take those offers up because
ofen it doesn’t reflect what the
brand stands for,” he said.
Source: B&T 10 July 2009

69. “This is an industry that s0ll talks
about the fact that a 2%
response rate is a good result.
But that’s a 98% non‐response
rate. So it’s not good enough.
It’s not good enough for the CBA,
and it shouldn’t be good enough
for you guys either.”
Source: B&T 10 July 2009

71. 3+

72. 3+ reach
‐ the universally agreed point
of first comprehension of an
adver0sing message

73. Is 3+ really the solu0on?
What impact can a good idea
have on the need to invest $$$’s
into TARP’s to achieve 3+?

74. You cannot bore people into
buying your product.
David Ogilvy.

77. • 40+% increase in number of campaigns FY08 v FY09
• 75+% total number of emails sent FY08 v FY09
• 360+ million to 650+ million
• Number of recipients per campaign up 45%

78. Tes&ng to op0mise
results

79. REASONS FOR NOT TESTING
Source: eROI, 2009

80. ELEMENTS THAT ARE BEING TESTED
Source: eROI, 2009

81. The impact of “subscrip0on”?
Source: The Works, 2009

82. DECREASED conversions
22.9%
by
Source: The Works, 2009

83. Which applica0on would
be most effec0ve?
Source: The Works, 2009

84. Version 1 is 10 points beEer
BUT
leads were of lesser quality
Source: The Works, 2009

85. Good marketers,
through the range of channels available from tv to
online, e‐mail to direct mail, promo0ons and PR,
know how
to solve demand‐driven problems.

86. AFTER ALL,
isn’t that what marketers do?

87. So, what’s the
plan?

89. Ideas over
execu&on.

90. Customer focus not
product focus.

91. Test. Test.
Test.

92. Cheap doesn’t always
equal effec&ve.

93. Debate / argue /discuss
in the language of
business.

94. Source: Hugh McLeod, Gaping Void, 2009

95. !
email: phil@ideagarden.com.au
twiEer: twiEer.com/phillipsmith
LinkedIn: www.linkedin.com/in/philsprofile