The document discusses the importance of marketing effectiveness, highlighting a disconnect between corporate strategy and marketing objectives, which hinders alignment and leads to dissatisfaction among marketing leaders. It emphasizes the pivotal role marketing plays in driving organic growth and shareholder value, yet notes that marketing often lacks a prominent position in board discussions. A call for a cultural shift is made, advocating for a focus on actionable objectives and collaboration across departments to enhance marketing's strategic impact.

1. Building a culture of Effectiveness
Tendensdagen
Stockholm 27th October 2011
Gurdeep Puri

2. Here to discuss
What is Effectiveness
Why it is important
Why Effectiveness is not at
the heart of the agenda
A vision for change

3. Let’s clearly define Effectiveness

4. The Marketing Process
Marketing Marketing Marketing
Evaluation
Strategy Plans Execution

5. The problem with this approach

6. Imagine you had a choice
Do the right
Ability to
thing for
measure
the business

7. Some common misconceptions
“It’s an Effectiveness “Brand consideration”
Award paper”
“It’s the return on investment from the campaign”
“Once a year fuss rather than ongoing business practice”
“Measuring what we do”
“Agencies seem to define Effectiveness as being
the work you do after the campaign has run”
Source: IPA VAG Industry Effectiveness Study, The Effectiveness Partnership interviews

8. What is Effectiveness?
Creating Marketing
Communications
that Maximise
Commercial Value

9. Ultimate focus for Effectiveness
Shareholder value
Commercial
Behavioural
Intermediate

10. Effectiveness should be future
focused

11. This immediately shifts the
conversation
HAS IT
WORKED? HOW CAN WE BE
EFFECTIVE?
WHAT ARE THE
WHAT DOES RESULTS WE
SUCCESS LOOK LIKE? DESIRE?

12. This has implications for the
way we approach Effectiveness
Planning for Effectiveness
Demonstrating Effectiveness

13. Clarifying the objective
What is the role for Marketing
and Communications?
Help deliver £2.5bn extra
sales over 3 years
Source: Warc IPA Effectiveness Awards 2008

14. Target high spenders from
competitive stores

15. What was more achievable?

16. Reframing the commercial objective into
an actionable task
Sainsbury’s target of delivering £2.5bn extra
sales over three years was turned into the much
more approachable task of getting existing
shoppers to spend an extra £1.14

17. Source: IPA, AMV BBDO

18. Would you run a race
without a
finishing line?

19. Why is Effectiveness important

20. Marketing is the key driver of
organic corporate growth

21. Organic growth correlated with
35%
shareholder value
LVM H
30% InBev
Reckit t
Pernod-Ricard
25%
Cadbury
SAB M iller
T ot al shar eholder r eturn %
H enkel D anone
20%
2
R = 0.4761
Kellogg's Pepsico
15% N est le
Kim berly-Clark L'O real P&G
10%
H eineken
5%
Sara Lee D iageo
U nilever Foods
Alt ria
H einz Colgat e
0%
-2% 0% 2% 4% 6% 8% 10% 12%
O rganic r evenue gr owt h rat e %
Source: Datastream, Martin Deboo-Investec Securities 2007

22. “One third of CFOs do not believe that
Marketing is a key growth driver or
crucial to devising strategy”
Source: Leadership for growth, Marketing in 3D; Delloite Consulting/London Business School 2008

23. Client pressure is building
‘It did not matter while clients had plenty of money to throw at the problem,
but they are no longer willing to pay lots of agencies for overlapping roles, and
are squeezing fees. Coca-Cola wants to reimburse its agencies for costs
and only reward them beyond that when campaigns have been shown to work.’
John Gapper, Financial Times 30th April 2009

24. Profit and Loss Account
We are considered a cost not a depreciating asset..
Groupo Campari 2009

25. “Only marketing investments can deliver
increased revenue and increased profit. Yet
marketing budgets are the first to be cut and
the last to get incremental investments.”
Guy Powell, Marketing Calculator
Source: Marketing calculator by Guy R. Powell

26. High Brand Value
Market Cap of Contribution of Brand Value
Parent Company Brand Value as % of
Brand ($m) ($m) Market Cap
$126,782 $70,452 56%
$ 166,597 $64,727 39%
$71,788 $33,578 47%
$67,708 $28,731 42%
$58,428 $29,495 50%
$29,214 $13,706 47%
$20,284 $11,041 54%
Interbrand Research: Best Global Brands 2010, FT Global 500 2010

27. Why Effectiveness is not at the
heart of the agenda

28. Lack of alignment between Corporate Strategy
and Marketing

29. The marketing sphere
Media
Agency
Fund Manager
Procurement Venture Capitalist
Econometric
Research Consultancy Private Equity
Agency PR
Agency
Comms
Agencies Marketing Company Financial Share
Agency Dept
Dept Board Markets Holders
Build Meet Sales/Share Meet financial Demand to see High share price
brands targets targets successful, highly High dividend
set by the board set by The City profitable company ROCE
(usually short-term) ROMI with excellent
ROMI Payback cash flow
Payback forecast

30. Marketing is not joined up
Media
Agency Fund Manager
Procurement Venture Capitalist
Research Private Equity
Econometric
Agency
PR Consultancy
Agency
Agencies Marketing Company Financial Share
Dept Board Markets Holders

31. Dissatisfaction within Marketing
“82% of Marketing leaders were dissatisfied with the role and
positioning of Marketing within their organisation.” *
“Board level CMOs say that only 16% of board
level discussions are about Marketing.” *
Sources: Leadership for growth, Marketing in 3D; Delloite Consulting/London Business School
In search for a strategic role for Marketing: The Chartered Institute of Marketing 2009

32. Marketing doesn’t often have a
seat at the top table
Minority of CEOs have previous experience in Marketing
Only 14% of FTSE 100 companies had a Marketing
Director on the Company Board*
To compound the situation, the average tenure of a
Marketing Director is less than 28 months
and could be as little as 15 months1
* themarketingdirectors.co.uk 2008, 1 Forbes/ Spencer Stuart 2008/7, 2 Spencer Stuart 2007

33. Agencies don’t always ask the right
questions at the start of the process

34. Who owns the problem?

35. HOW will creativity deliver value?
Communications activity
Generate intended response
Build brand perceptions
Build brand commitment
Drive consumer behaviour
Create value for business

36. Fragmentation of channels creates another
hurdle

37. This has led to an explosion in data

38. There are low levels of data sharing

39. Dashboards
are offered as a solution

40. A vision for change

41. Focus on answering these
questions
What is expected from Marketing from the
different elements of the client organisation?
What are the KPIs that Marketing should
present to the company board to demonstrate
effectiveness?
Do your Marketing briefs contain commercial
objectives for the agencies?

42. Make the connection
Alignment between business strategy and marketing
objectives is critical
Marketing Effectiveness should be explicit
and shared between CMO and the CFO

43. “We are focussed on being
business solution providers,
rather than just advertising and
buzz creators.”
Law and Kenneth- Campaign magazine 2011

44. Put Effectiveness at the START of the
process rather than at the end

45. Invest time upfront to investigate the
business issue
Market Dynamics
Sales
Price
Competition Value share Marketing
Volume share Support
Media spend
Competitor (relative to mkt)
activity Business
Issue
Innovation Retail factors
Quality Distribution
Seasonality
Product Share of Trade
Penetration repertoire
Purchase & Usage
Behaviour

46. Set objectives that are realistic and
achievable

47. Collaborate
There is an urgent need to bring everyone together

48. Make creativity purposeful
Conduct business reviews alongside the brand creative review

49. Aim to demonstrate Effectiveness to
the client CFO

50. Reposition creativity as an
investment rather than a cost
Investment Years ROCE
FTSE 100 3 6%
OMX 3 8.5%
Govt Bonds 3 5%
Creative
campaign 3 57%