Marketing is no longer a cost center

June 30, 2016

Creativity is the most important element in marketing (after results of course). Smart people developing creative ways to connect with people in a more engaging way. The most exciting change in the past decade has been the multiplication in the number of touchpoints with companies. This is an exciting opportunity to not only be more creative but also understand what’s working in a measured way.

But yet, here we are and there’s still a lot of progress to make. During a time where we celebrate creativity and reward story tellers with trophies, the marketing profession feels less relevant. The challenge has been to keep up with the new reality of constantly connected customers.

One of the biggest mistakes that still occurs is the confounding between advertising and marketing. I used to make this mistake myself and obsess over the ad side of marketing. Advertising obtains a large investment of the overall marketing budget and focuses on one tiny piece of the customer journey. Instead, the marketing practice should look at the big picture. These are the types of tactical questions I like asking myself:

  • Am I sending the right emails to customers?
  • Would I follow my own brand on social media?
  • How am I talking to my top customers?
  • Does my site experience answer to all the different issues customers have?

These are all exciting areas where creativity can be infused in very interesting ways. Being creative in your email probably won’t win you an innovation award, but more long-term value will be created.

Traditional forms of media are eroding

Younger generations are spending less time watching TV. The chart below show how dramatic this change is among younger demographics


Source: MediaRedef, June 2016

While TV ad budgets have actually increased this year, the war for attention is over. The phone has won.

Snapchat is the social media network du jour and with good reason; they are winning over an entire generation. The step change for marketers is that they way you engage with people on a mobile platform is fundamentally different. The same goes for email, customer service and shopping; advertising definitely adds value but in a much more utilitarian fashion than before.

Marketing as a cost center is over

Brands and agencies that spend any money without clear understanding of impact are setting themselves up for failure. For nimble tech companies, marketing is now seen as a sales channel and revenue generating before everything else. In traditional organizations however, marketing is a cost-center on the balance sheet.

Even branding initiatives are more accountable to business objectives yet only 31% of CMOs in North America have marketing analytics in place to measure those efforts.[1] With more robust analytics, I expect budgets to significantly grow as the marketing function is able to prove its incremental impact on sales.

The reward system for agencies needs to evolve

Every market in the developed world has its own reward system and the Canadian market is no different. One of the major signals today is the number of awards an agency has won. This metric in my view is no longer a leading indicator of agency proficiency. Currently, most agencies’ compensation are tied to ad spend & growth of ad budgets. By tying agency compensation more closely to a customer’s performance, it will generate a more robust ecosystem.

Geeks are the new creatives

User experience experts, CRM gurus, business intelligence analysts and performance marketing pros are the ones that are slowly taking over. The center of decision making is moving towards those that use technology effectively to add value to customers.

We are witnessing the intersection of two fields / marketing and technology. Only those that use data and technology to master creativity will survive.