SapientNitro Global Marketing Series: Part One – CMOs Reveal Obstacles To Global Marketing


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Our CMO Global Marketing Readiness Study, a 6-month research study of 114 CMO-level marketers, has culminated in three separate points of view on the future of global marketing. The first article of The Evolution of Global Marketing series focuses on identifying the obstacles, and understanding the implications of these new challenges.

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SapientNitro Global Marketing Series: Part One – CMOs Reveal Obstacles To Global Marketing

  1. 1. SapientNitro Global Marketing SeriesCMOs RevealObstaclesto SuccessfulGlobal MarketingArticle 1 of 3 The Evolution of Global Marketing | By Freddie Laker and Hilding Anderson
  2. 2. Executive Summary CMOs are struggling to adapt to a world that is fundamentally different from when they started their careers. Disruptive digital technologies and the new expectations of the global consumer are forcing global firms to adjust and innovate. At SapientNitro, we have made a significant effort to understand how these changes are impacting large global organizations. What we found was surprising: just 15% of senior marketers are prepared to deal with the rapidly changing consumer, and just 8% believe agencies are succeeding in their support of global brands. This should be a wake-up call for global marketers. To further develop an understanding of the causes and implications of these trends, we have conducted a 6-month study of 114 CMO-level marketers, including one- on-one interviews with former or current CMOs including The Home Depot and Intercontinental Hotels. Our research has culminated in three articles. The first is focused on identifying the obstacles, and understanding the implications of these new challenges. The second posits a new “Global Marketing Mindset” of the future CMO — one more comfortable with technology, consumer insight, analytics, and multi-disciplinary strategy teams. The final article explores the implications of these trends for agencies — how agencies can better support large global brands; it also points out major areas where they are currently failing. Together, these pieces represent our perspective on the future of global marketing. While it is a challenging future, it also is full of opportunities for innovative,?! adaptable, and entrepreneurial leaders and businesses.
  3. 3. intROduCtiOn new GlObal MaRketinG CHallenGeSGlobal CMOs and senior leaders are facing distinctive new challenges, which DISruPTIve TeCHNOLOGyhave arisen just in the last few years. Amid this wave of disruptive technology The first obstacle identified is the rapid growth of new, disruptive consider themselves ‘very knowledgeable’ about technology, and yet by 2017,and its application to building multi-channel experiences, marketers are technologies. These are reshaping how consumers can be reached, and how these CMOs will purchase more technology than the CIO 1.reinventing their tools and approach. marketers develop campaigns to launch and reinforce their ecommerce or brand-building goals. Second, the level of investment required to adapt to these new technologiesIn our research, we identified five significant and new challenges: disruptive is placing pressure on the local – global relationships which are core to thetechnology, the connected consumer, the localization challenges of digital, the Consider the technologies that have been introduced or achieved meaningful nature of global marketing. even when CMOs want to adapt and roll out thesechallenge of global multi-channel projects, and a mismatch of organizational market shares in the past five years: media tablets, mobile-centric new technologies, often the cost is prohibitive, the rOI is non-existent, orstructures. applications and interfaces, personalized and social user experience, both. Local affiliates are not likely to be able to afford to develop or roll out the internet-aware devices, app stores and marketplaces, in-memory computing, latest technologies. And if they do, they may not be consistent with the globalIn total, these trends are driving a new marketing environment, which is personal sensors, location-based services, mobile commerce, augmented brand standards.dramatically more difficult than even five years ago. For example, it is much reality, in-store kiosks, touch-screens, and many more. Third, the very nature of marketing has shifted as a result of these disruptivemore difficult to manage your global brands across disruptive technologies And more change is coming, with NFC (near field communication) and mobile technologies. Instead of traditional one-to-many marketing, a new focus ofof social media, mobile apps, and in-store digital experiences. recent payments reaching a tipping point, while digital tools are affecting the way we personalized, social media-driven one-to-one marketing is now the rule. Indevelopments in multi-channel digital experiences offer opportunities to grow order coffee, drive cars, exercise, even monitor home electricity consumption. our research, social media platforms — most of which didn’t exist at scalerevenue and connect with consumers, but require investments much too large five years ago — ranked as the number one concern for senior marketers.for a single market. Little wonder then that senior marketers are struggling to adapt in this new New media channels are also part of this rise of one-to-one marketing: 89% world. The proliferation of new technologies represents a set of obstacles to reported that the proliferation of media channels has significantly increasedIt is clear we live in a time of major new challenges for global marketing. In global marketing. the challenges of global campaign management.the following sections, we will explore the nature of the challenge, and alsonote the implications of each. First, the senior marketer now has to be knowledgeable about the latest and greatest technology. But they aren’t today. Just 1 in 5 senior marketers 1 Gartner 2012 FIGure 1: FIGure 2: GLOBAL MArkeTING IS MOre IMPOrTANT COMPANIeS Are STruGGLING TO ADAPT THAN 5 yeArS AGO % of respondents who agreed or strongly agreed % of respondents who strongly agreed to to the question the question Our global marketing The importance of managing organization is prepared to global campaigns is greater 43% 45% 88% deal with rapidly changing 15% than it was 5 years ago. consumer trends around digitalization and globalization. The interconnectedness of Our marketing activities are today’s consumer is breaking fully integrated and working down the barriers between 50% 32% 82% together (e.g. digital activities 9% global and local marketing. are in sync with traditional media campaigns). FIGURE 1 The core challenge for today’s global marketer: global marketing is FIGURE 2 To survive in the new marketing world, marketers must be flexible. yet a recognized as more important than 5 years ago, even as global and local marketing minority of marketers feel prepared to deal with integrating their marketing activities distinctions break down. to reach these consumers. Source: Q2 2012 online survey to 114 senior marketers with global responsibilities Source: Q2 2012 online survey to 114 senior marketers with global responsibilities
  4. 4. The implications of these new disruptive technologies are clear. The connected consumer For example, viral marketing, social media, online communities, amplification, and buzz management are designed to spread as widely and broadly as possible. First, the new global CMO will have to be much more knowledgeable about A second major obstacle is the rise of a whole new class of consumers: those technology in the future. In our survey, we compared CMOs who assessed who are wealthy, educated, technology-savvy, and accustomed to buying As a result, many assets designed for one country or one consumer are now themselves as technology-savvy with those who did not. What we found was and sharing what they want when they want it. Highly resistant to traditional rapidly shared around the world. Mobile apps, creative imagery, and regional- that technology-savvy marketers felt twice as prepared to manage these advertising, they share what they love, and rely upon multiple sources for specific prices all are now visible globally. Consumers are even ordering changing consumer trends as those less savvy. their search and discovery process. products from one country, and then reselling them locally. In addition, we saw differences across the board in how these new CMOs The old book used by power brands of the last half of the 20th century is less The implication of these obstacles for global marketing is significant. Global thought about their marketing opportunities. They placed a higher effective with these consumers. Firms such as Nike and Coca-Cola — which marketing’s core challenge has traditionally been delivering relevant messages importance on global campaigns, they recognized the importance of have expanded domestic “power brands” internationally — must decide to the local market. But digital tools and platforms make this more challenging centralized IT infrastructure investment, and they appreciated the whether to develop regional or local brands that cater to local tastes. Other — additional assets, more campaigns, and faster change only add to the interconnected nature of the consumer. brands such as Unilever or Nestle — historically country-specific brands — complexity. Digital marketing platforms 2 — meant to boost efficiency — must decide whether to consolidate in the digital arena. also impose constraints. The new global consumer requires a delicate dance It goes beyond understanding these new technologies — the future senior of local, regional, and global campaigns — simultaneously. marketer must also assemble the right team to use analytics and deep Furthermore, there is a fundamental disconnect between the old and new consumer insights to make the right decisions that drive the business ways of marketing to these consumers. Many new digital marketing methods 2 For more on digital marketing platforms, see the article “Digital forward. are not effective when limited to traditional, country-based global barriers. Marketing Platforms: Taking Back Control” by Dan Barnicle. Figure 3: How Are Tech-Savvy Marketers Different? FIGURE 3 Much of the new breed of Tech-Savvy1 Non-Tech Savvy Difference CMOs emphasizes the importance of deep % who strongly agreed % who strongly agreed technology knowledge on top of marketing To what extent do you agree with the following statement: expertise. How do these marketers ‘think differently’ from traditional marketers? The importance of managing global campaigns Most notably, according to our survey, they is greater than it was 5 years ago. 55% 29% +25.4% recognize that the importance of managing campaigns globally is much more important Back-end IT infrastructure to support digital than it was just five years ago. They are marketing is best built/funded at a global level. 43% 24% +19.5% impacted by these changes more than non- tech savvy marketers. The interconnectedness of today’s consumer is breaking down the barriers between global and 40% 24% +16.3% They also note the importance of global local marketing. funding of back-end infrastructure and the challenges on changing consumer behavior. Our global marketing organization is prepared to deal with rapidly changing consumer trends 23% 12% +10.9% Finally, they’re less concerned about creative around digitalization and globalization. capabilities when selecting agency partners relative to non-tech savvy CMOs. Building our brand’s Social Media communities 28% 18% +10.4% is best managed at a global level. Source: Q2 2012 online survey to 114 senior marketers with global responsibilities How important are each of the following capabilities when selecting agency partners? Cross-channel expertise in both digital and traditional commerce 46% 24% +22.7%:) 4 Tech Savvy is defined as those who agreed or strongly agreed to the statement ‘I consider Best-in-class creative myself to be very knowledgeable about 52% 71% -19.0% technology (e.g. the back-end infrastructure for marketing programs)’
  5. 5. WE USE WE USE SMARTPHONES FEATURE PHONES IN-STORE WE WATCH TO GO ONLINE TV ONLINEFIGure 4A:CHOOSING WHere TO INveST IS GrOWING WE ARE WE MAKE MOBILE MONEY TRANSFERS deSpite MuCH talk OfMOre DIFFICuLT SOCIAL MEDIA MEGA USERS a “GlObal COnSuMeR”, The proliferation of media % of respondents who agreed or strongly agreed to the question tHeRe iS nO SinGle MOdel Of GlObal beHaviOR channels has significantly 39% 49% 89% increased the challenges of managing a global campaign WE PREFER in the last 5 years. PREPAID PLANSFIGure 4B: NeW LOCALIzATION CHALLeNGeS OF DIGITALSOCIAL MeDIA rISeS TO Be A TOP Thirty-five years after Sony and other global companies applied “think global, act And tensions between local and globalCONCerN – GLOBALLy local” to the business setting, the battle between centralized management and local The regional flexibility organizations — challenging for 82% of senior marketers rages on. But our research suggests the nature of this conflict is distinct has to be there. We have marketers — are not making it any easier. % of respondents who agreed or strongly from the past. to support localization due recent developments in digital platforms have, agreed to the question to consumer differences, in many cases, placed local marketers on the Q: What are the most important global What we’re seeing in the research is a new type of challenge for global marketers. or brand equity maturity defensive; once masters of their own digital trends in marketing that will impact your business in the next 3-5 years? In fact, 75% reported that tailoring campaigns to local values is moderately or differences… The trick domains, many are increasingly constrained by extremely challenging today, and over a third believe it will be even harder within three is to find the sweet spot these tools. And they’re pushing back. Perhaps explosion of Social Media to five years. Despite much talk of a “global consumer,” there is no single model of where a campaign is only this is why 38% report that tensions between 46% #1 global behavior. Increasingly, consumers now have visibility into other regions, while partially planned. global and local organizations regarding roles also having a greater expectation of local relevance in marketing. Coping with the and authority will be more challenging in the Senior Latin American Marketing Growing importance of 44% #2 diversity of this consumer — one who has a strong regional subculture and is also a Director, CPG, experience: next three to five years. emerging markets global consumer — is a key challenge. North America, Central America Clearly, digital marketing platforms are both Blending of offline/online experiences 41% #3 Mobile is a great example: major regional differences — pay-as-you-go plans, varying a solution and a constraint. But other internal challenges exist, which include a lack of SMS fees, and the lack of smartphones in much of the world — mean use of these strong in-house digital expertise to customize campaigns locally. tools should be tailored. The implications include an increased investment in new digital tools — such as theFIGURE 4B Managing global campaigns in the new global and digital world was A recent study looked at ads that tested exceptionally well in one country and found digital marketing platforms — and increased efforts to consolidate global agencies.identified as a key challenge. In particular, social media, and blending online / that just over 1 in 10 did equally well in another country. Moreover, 1 in 10 of those Localization remains critical, but these new tools are becoming essential in order tooffline experiences were key global marketing challenges. exceptional ads actually performed below average when tested in another country. optimize the local and global customization of campaigns.Source: Q2 2012 online survey to 114 senior marketers with global responsibilities So while using the same ad campaign across borders may offer cost efficiencies, the savings realized may not outweigh the benefit offered by local engagement 3. 3 “Culture Clash: Globalization Does Not Imply Homogenization”, Millward Brown’s POv, May 2009.
  6. 6. Figure 5: Local Relevance In The Global Arena is Getting Harder Coping with a global consumer WHO HAS A Q: How challenging do you consider each of the following for your marketing organization? strong regional subculture is a key challenge Is this less challenging, more challenging, or about the same as it was 5 years ago? In 3-5 years? Today Relative To 5 Years Ago Expected Change In 3-5 Years % responding moderately or extremely challenging less more less more Tailoring campaigns global local regional to local values/ customs/ norms 78% 13% 35% 8% 34% Tensions between global vs. local organizations 82% 12% 42% 12% 38% regarding roles and authority FIGURE 5 Tailoring and customizing your marketing to a local market is moderately or extremely challenging for marketers today. And four times as many marketers believe it will be harder in 3 to 5 years rather than easier. Source: Q2 2012 online survey to 114 senior marketers with global responsibilitiesLack of Multi-Channel MarketingMost senior marketers understand the importance of the multi-channel (e.g. Personally Identifiable Information (PII) used for digital offers or rewards The final challenge is to ensure the right flexibility for the local regions. Ascustomer. But our research revealed that too few global marketers are programs), and ensuring the correct assets are (re-)used. Regional or we talked about earlier, despite the overarching trend of globalization, localthinking across channels from a media or from a device perspective. A full country-teams often have their own ways of doing things, some of which may markets remain very distinctive. But for global multi-channel marketers, the37% don’t believe that “their marketing activities are fully integrated across need to be overcome. bar is set much higher. There are massive differences in the cutting-edgedigital and traditional channels.” technology that can be used to deliver multi-channel experiences. Obviously, The second element is managing costs. Each country must be knowledgeable mobile devices and mobile plans vary. More significantly, the consumer’sThe core challenge today is not how to develop a country’s multi-channel about digital, and should not create its own digital assets for every campaign. expectations vary: in some countries such as Indonesia or South Africa, SMSstrategy — that is well documented — but rather how to develop a multi- Rather, invest once and reuse globally is a better approach. Consolidation is a preferred method. In others, Apple’s app store or Android Market are thechannel strategy that ensures consistency globally, at the right cost, and that of local agencies is one common solution. This is particularly important in best. In-store support for kiosks, and assumptions around wireless access inalso provides the recently discussed flexibility for localization. strategies relying upon sophisticated in-store or mobile experiences. Large store vary greatly. Character sets, comfort with touch-screen wall displays, investments such as global multi-channel store experiences supporting standards around photography in changing rooms, support for social mediaThe first element of the challenge is how to ensure consistency across many mobile, kiosks, and POS systems are extremely challenging, costly, and platforms — there are hundreds of differences small and large in buildingdevices, platforms, and regions. This includes both processes around security should be centralized. cutting-edge global multi-channel marketing experiences.
  7. 7. DOWNLOAD OUR APPAt a recent Forrester Multi-Channel Conference, Laura Wade- to us,” saying that multichannel customers were worth 4x as muchGery (Executive Director, Multi-Channel eCommerce from Marks& Spencer), noted that boosting the in-store team’s comfort with as those who connected only with one channel. WELCOME pick up TO OUR STORE WATCHmulti-channel was key; she emphasized providing desktops in staff The bottom line is that too many global marketers have not ourrestaurants, and making sure incentives from online sales were overcome the challenges in speed, cost, and flexibility of truly global VISIT ad in OUR STORE like us onlinked to individual store performance. The result was a confirmation multi-channel marketing. Until senior marketers embrace and OUR SITE ORDER facebookof the value of multi-channel. Wade-Gery noted “the more different invest in global multi-channel platforms, they will continue to miss VIA APPtouchpoints customers are engaging with us, the more they’re worth out on the substantial benefits of cross-channel experiences. Figure 6A: Multi-channel Marketing Is Growing More Difficult Why Such Slow Adoption of Q: How challenging do you consider each of the following for your marketing organization? Global Multi-Channel Marketing? Is this less challenging, more challenging, or about the same as it was 5 years ago? In 3-5 years? Effective global (and regional) marketing in the 21st century is often best done through multiple channels and devices; today the modern consumer is integrated, and multi- Relative To 5 Years Ago Expected Change In 3-5 Years channel customers generate up to 4x as much as those who shop through single Today % responding moderately channels 4. But why have marketers been so slow to adapt? or extremely challenging less more less more Coordination of marketing efforts First, the global or regional leadership at many large multi-nationals is very comfortable across multiple traditional media and digital channels 82% 11% 53% 15% 43% with traditional single-channel campaigns (e.g. TV). These campaigns remain very effective, can be fairly well measured, and have tremendous reach and scale. Second, digital skills are too often splintered globally across companies and agency partners. A proliferation of specialized partners, and strong organizational silos, result Figure 6A: in substantial coordination costs to build sophisticated multi-channel campaigns. But Marketers Had Mixed Messages About Whether To Centralize Or Allow Local Control Third, many agencies driving global creative and marketing strategies are not as familiar with the digital tools available — especially in-store and multi-screen experiences. For example, building the MetLife Stadium experience — in which visitors to the NFL Disagree or Strongly Disagree Neither Agree nor Disagree Agree or Strongly Agree Meadowlands Stadium (home of the U.S. National Football League franchisees - the Multi-channel commerce initiatives are best coordinated at Giants, and the Jets) are able to engage with the brand on 52” LCD displays, enter into the global level (e.g. e-commerce, 23% 20% 57% mobile commerce, kiosks, various contests and games (e.g. take pictures of themselves with Jets or Giants painted in-store, rewards programs). faces) - required knowledge of various touch-screen, SMS, and ecommerce tools. Building these digital experiences is expensive, which further slows the rollout. Local markets should have substantial independence in 15% 21% 64% controlling their marketing mix. In the end, it will be a slow process to maturity for executive leadership, in-house digital, teams and agencies, global multi-channel marketing campaigns will be the standard, not the exception. FIGURE 6A/B Operationalizing multi-channel marketing is hard – few marketers have figured it out. These data also revealed a central tension – the desire for commerce initiatives to be centralized, while local markets should have ‘substantial independence’. 4 Source: Q2 2012 online survey to 114 senior marketers with global responsibilities M+S Forrester Strategy Summit May 2012
  8. 8. COOrDINATION WITH OTHer TeAMS INTerNALLy — OverCOMING SILOS One of the most interesting new challenges in global marketing relates to the rapid development of new technologies, and the slower pace of skill development In fact, among marketers who have a high degree of technology savvy-ness, there is a greater realization of the importance of close collaboration (61% vs. 41% strongly 83% Of Marketers agree within organizations. Too often when we meet with senior leaders to discuss digital experiences, all three executive branches — the CMO, CeO, and CTO — will attend. The agree among those two groups (tech-savvy and non-tech-savvy respectively)). that inVestMents in overlap of authority represents a fundamental failure to efficiently organize for the new global marketing environment. unfortunately, lack of coordination is quite common. One interviewee at a large automotive manufacturing firm noted completely separate interactive marketing and Digital haVe increaseD the iMPOrtance Of clOse traditional marketing departments. Furthermore, a third group — IT — remained essentially, global marketers are finding that while there are deep repositories of disconnected. “everything in interactive is run by (reviewed by) the marketing team. It knowledge around ecommerce personalization, data, and analytics or social media should be a combined marketing and IT team.” platforms in various locations, coordinating access to these groups is quite difficult. cOllabOratiOn betWeen For example, several CMOs noted that individual countries can have their own skills The combination of silos of expertise, the high cost of digital, and country managers on staff, along with relationships with agencies that can provide skilled people — unwilling to adapt shared platforms and standards result in the global marketing it anD Marketing. particularly in the digital space. But the location and depth of these skills was not team struggling. apparent to the central management team. This was confirmed in our survey: 53% of marketers strongly agree that coordination is much more challenging today than three years ago. Silos and lack of coordination remain a major challenge even in centralized marketing organizations; “siloed” FIGure 7: thinking is exacerbated when multiple countries are involved. TeAM COOrDINATION IS A key OBSTACLe TO eFFeCTIve GLOBAL MArkeTING And, surprisingly, it is getting worse. Q: How challenging do you consider each of the following for your marketing organization? In part, this relates to the multi-channel experience — the future of the customer Is this less challenging, more challenging, or about the same as it was 5 years ago? In 3-5 years? experience — requiring more collaboration. even in the case of in-store experiences, IT, store management, mobile, and marketing teams all must sit at the same table. Our survey explored this topic, and found that 83% of marketers agree that TODAy reLATIve TO 5 yeArS AGO exPeCTeD CHANGe IN 3-5 yeArS % responding moderately investments in digital have increased the importance of close collaboration between or extremely challenging IT and marketing. In addition, 77% report gaining access to skills and people as LeSS MOre LeSS MOre moderately or extremely challenging. Coordination between digital and traditional marketing 75% 16% 56% 24% 37% teams Gaining access to the appropriate skills and people across 77% 13% 36% 18% 38% the organization FIGURE 7 Coordination across teams – not just across marketing channels – surfaced as a key obstacle to effective global marketing. Senior marketers reported that digital and MObile traditional coordination is much more difficult than it was five years ago. Geography, language, skills and internal politics all conspire to create silos which reduce marketing effectiveness and increase costs. Source: Q2 2012 online survey to 114 senior marketers with global responsibilities Marketingit stOre
  9. 9. About our research Building on our team’s three decades of multi-channel marketing experience, SapientNitro conducted a series of 20+ detailed interviews with senior marketers within and outside of SapientNitro, and followed it up with a far-reaching survey to 114 senior global marketers and global CMOs. We also reviewed existing literature related to this topic. The majority of the research was conducted in Q2 2012. We have captured this research in three articles — the first focused on new global marketing challenges, and second on keysummary elements of the global marketing mindset, and the third on five ways agencies are struggling with global brands today.The global marketing landscape continues to evolve. Senior marketers are confrontingold challenges with new tools. About THE AUTHORS FREDDIE LAKER – is VP of GlobalIn this paper, we identified the core challenges facing these new, technically adept senior Marketing Strategy and has extensivemarketers. Many of these new marketing methods are increasing the challenges faced experience working across a broad rangeby global marketers. From viral marketing spreading beyond the original country, to in- of global clients. He actively speaks at leading conferences around the worldstore experiences that are too costly to develop country-by-country, to security concerns on topics ranging from global marketingabout sharing Personally Identifiable Information, new digital marketing methods are trends to emerging disruptive technologies.shaping how senior marketers operate. HILDING ANDERSON is a Sr. Manager of Research + Insights, and focuses onThe future CMO will require a new set of skills and an entirely new mindset to operate digital strategy and the emerging digitaleffectively in the new global environment. Our second article in this series, “The New consumer for SapientNitro. He is also theGlobal Marketing Mindset,” explores details of the five major elements of the new editor for Insights 2013, Sapient’s annualmindset to allow your business to operate effectively in this changing world. digital trends report.© Sapient Corporation 2012