Vince Ferraro and CMO Council 2014 Marketing Trends, Directions, and Insights


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Adapted and updated from a Response 2013 presentation developed with some data provided by the CMO Council. Presented at the MENG San Diego meeting in November, 2013

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  • It is my pleasure to be here today.
    Thanks to Tom Haire, and the CMO Council and the Response Expo 2013 team
    I am speaking to you today not as direct response guru. There are plenty of them at this event.
    Instead, I am going to speak as a chief marketing officer and business leader who procures all elements of the marketing mix, including direct response.
  • Here is what I will cover
    Research from the CMO Council that will highlight C-level executives’ sentiments on the trends in the marketing mix
    The role of direct response in a integrated marketing campaign
    Thoughts on how the direct response community can get a greater share of our marketing budgets
  • In fact, a marketers we are all after the same things
    We want a well qualified funnel, we want communications that present compelling offers and reasons to believe in our brands and products
    We want to convert qualified leads into sales – both for repeat and new customers
  • And the role that response marketing plays is also evolving
    This response time line shows how the marketing you all do has changed over time
    From direct response of the 1950s fueled by radio, TV, and print to new forms of response enabled by the computer, internet, interactive web marketing, and the trend towards mobile, and social media
    We have “responsive” web designs and we are heading (as ResponsiveAds) indicates to the world of responsive advertising …
    By extending your existing desktop advertising/web assets to mobile and tablets instantly. The idea that mobile inventory should not be undervalued!
    And a belief that all devices are created equal!
  • I am here representing the CMO Council.
    Who Are they?
    The Chief Marketing Officer (CMO) Council is the only global network of executives specifically dedicated to high-level knowledge exchange, thought leadership and personal relationship building among senior corporate marketing leaders and brand decision-makers across a wide range of global industries. 
    I sit on the North America board of advisors for this organization
    The CMO Council represents:
    Over 6,500 marketing brand leaders that
    That control almost $350B in marketing spend
    And has regional and international chapters all over the world, in 110 countries
    OK So do I have your attention now?
  • Every Year The CMO Council conducts research with this base of marketing leaders
    The findings of the 2012 “State of Marketing” report indicate that the role of the CMO now encompasses more critical customer touch-points that directly impact the customer experience, and executives who are up to the challenge are being compensated based on their performance and impact on the business.
    The outlook is distinctly positive for marketers as executives head into 2013 with renewed confidence in their roles and business performance.
    It is global benchmark of marketing spend and intentions was drawn from the insights and contributions of more than 550 senior marketing executives representing North America, Europe, Asia-Pacific, the Middle East, Africa and South America
    Nearly 65 percent of these marketers report directly to a president, CEO or chief operating officer. More than 30 percent of respondents represent companies with more than $1 billion in annual sales; 11 percent represent companies having between $500 million and $1 billion in sales; and 30 percent are with companies with revenues between $50 million and $500 million.
    I will share recent results from this survey
  • First, let’s look at the multi-channel customer
  • We like to imagine that our consumer lives like this…hanging out at home, surrounded by a happy family, with plenty of time to consume all of the amazing experiences we have created for her…
    In fact, she is ready, willing and able to not just consume, but she is ready to act. She loves us, she needs our content. But here is the reality…
  • This poor family is drowning in a sea of messages…and they all want them to act now…
  • Ever since the advent of social media, e-mail has become increasingly relegated to second-tier technology status,
    With new reports coming out on a regular basis that claim e-mail open rates are down
    As a result, marketers are better served by focusing their efforts on social media marketing. … The story goes 
    While the reality is email click thru rates, open rates, and volume are declining, there is still a strong role for email marketing
    Despite the plethora of new social technologies out there, e-mail remains "the most effective and inclusive" way for marketing professionals to reach consumers (study by Search Engine Watch)
    And B2B business still believe in the power of email
  • Well What Do We Like?
    We like Exclusivity, Offers, and Interaction
    67% of consumers want to be eligible for exclusive offers
    60% want the opportunity to interact with other customers
    65% want to gain access to games and contests
  • And Truth Be Told, We Live in a Burger King World
    We “want to have it our way”!
    We want it personalized, customized based on our demographics, psychographics, and purchase history
    We want it now, and on a variety of computing, smart phones, and tablets
    The outcome if we fail to achieve this?
    41% would consider halting all business and no longer purchase from a company that continues to send impersonal, irrelevant clutter. How is that for customer feedback?
  • Let’s look at these customer realities
    Why do customers disconnect or opt out?
    46% because communications were not relevant to them
    73% were irked over receiving a promotion on a product they already bought
    39% ignore messages because they are flooded (in their mailbox and inbox)
  • Now I want to turn my attention to the multi-channel marketer
  • Last year, Gartner released a blog post that predicted that by 2017, the CMO will spend more on IT than the CIO.
    Believe this or not, what is obvious is that more and more customer experiences are powered through digital channels today…and yes, the CMO owns those experiences. But in reality…
    And what CMOs are more often than not building is a loose tapestry of lots of little digital solutions.
  • 36% of marketers admit digital strategy is made of random point solutions built over time.
    This was certainly the case when I managed corporate and consumer marketing for Eastman Kodak.
    In fact, My team spent countless hours trying to get 5 different reports all containing important information to integrate better so we could get the report we really wanted.
  • I love word clouds
    When the CMO Council asked where marketers were seeing success in their digital strategies, these five areas were the top…but consider this…
  • We marketers have gotten caught in the channel comfort zone.
    Someplace in between all the things we used to do in traditional channels…we started doing the same things in digital channels!
    But here is the big problem…we have started adding faster moving channels…that still sit, alone, separated, and disconnected from an overall customer engagement strategy.
    Let’s look at social as a prime example of this…
  • How has Social Media impacted marketing?
    Engagement and customer listening
    New insights that come from the conversations in forums, social media, and other online channels.
    These are all good things to be sure.
    Except … this has increased the complexity of digital channel marketing in an environment, where most marketing leaders whom I know, are trying to do more for less.
  • But ladies and gentlemen, let me introduce you to social media.
    ALL of this…every single scary piece of this overwhelming pie is social.
    You can see the various segments of specialization
  • Now, if you are like me and like a bit more order…then it starts to look like this…good luck thinking this is going to be any less confusing.
    But here is marketing’s reality. It isn’t pretty is it?
    In fact, it is overwhelming to most of us.
  • But when you REALLY look at this list, most marketers were concerned about number 4…
    Many of us still think we can control it!
    Which, of course, is wishful thinking.
  • You see we used to think about brand marketing or customer engagement as a series of attempts…
    if we got TWO PERCENT of people to respond…it was AWESOME!!!!! A BASKET!!!!!!
  • But then, customers decided they could talk back. And we had to change EVERYTHING.
    We had to rethink and reshape where and how all of our “asks” were being constructed and connected.
  • I am going to shift gears now and talk about marketing spend intentions?
    Remember that $350B I mentioned earlier?
  • Marketing’s mandate is pretty consistent
    We are paid to do more with less
    Lower costs
    Drive GTM efficiencies
    Grow or retain market share
    Drive top-line growth
    Drive sales pipeline
    And get better customer insights.
    No wonder the CMO position is a revolving door at most companies
  • 79% of marketing budgets, as a % of revenue, is 6% or less
    40% of marketing budgets are <=2% of revenues
    And only 8% of company’s have budgets greater than 10% of revenues
  • 40% of the marketing spend is focused on product marketing, strategy and branding, sales support and website properties
    With 60% in a variety of other buckets
  • This chart shows the allocation of program spend in marketing. No surprises here
    Pretty balance mix of marketing spend
  • The good news is that 82% of marketing leaders think the value of their vendors and partners is pretty good, average, or extremely valuable
  • When asked why they did not rank their vendors, the top 3 reasons were lack of innovation and value-added thinking, business results, and campaign outcomes, quality and consistency of service
    Think about it … it comes down to innovation, ROMI, and quality measures.
  • OK, so who is doing it right…really getting this connected digital landscape together and connected…well, good thing is…we asked!
  • We conducted a study called Integrate to Accelerate Digital Marketing Value,
    We noticed that 9% of respondents said they had highly evolved programs…4% said they were a leader in their category…and 7% were advanced in managing data and basing engagements on data…
    So what did THESE guys have in common???
  • What are the leaders doing?
    CEO & Line of Business Support (Crucial)
    Formed task forces with IT and the CIO
    Customer, external focus
    Value Creation
    My perspective is that this does not happen in most companies. Why? Marketing is not seen as strategic. Instead it is viewed as just enabling or supporting sales (which is also important. Conversation should be AND.
  • This slide is self explanatory
    What should be notice is the fact that delivering communications and success rates of conversions, up-sell, cross-sell, and response rates
    I had an epiphany here. You see … what we market leaders need is what the leaders in response channels make happen every day for your customers
    Is this an opportunity for you. I think so
  • I like this list because this is what (we ) marketers think we will be investing next year
    Analytics, CRM, Social media, and mobile are the largest.
    How can all of you help us?
  • I like this slide because in demonstrates the complexity and integration that is required to manage the marketing mix
    We must make these tradeoffs and mix decisions for most of marketing – whether that be brand management, new product launches, demand generation … the list just goes on and on!
  • And when you think about this what we are really talking about is delivering great content – whether that’s an offer, to educate our customer, or manage customer engagements online and through social media.
    It is all about the content.
  • And if it is content, it needs to be made actionable.
    When I was at HP we realized, back in 2007, that we could no longer afford to do marketing that did not have a call to action.
    So from the mountain of Vesuvius (actually it was HP Palo Alto) there came the word … all future marketing deliverables must have a call to action.
    But when you think about response channels, this what you do so well
  • And to make actionable content, requires a call to action.
    If you asked me where I think the landscape is changing fast,
    It is in gamification
    More customization and personalization of marketing deliverables and sales communications
    In what I call a “purchase cycle interruption”
    Meaning with my GPS enabled phone (in Target), you can cross-sell or up-sell me something at Wall Mart. When I go online to compare prices
  • So where does this go for you and your customers?
    How can you take these insights and make them work for your business?
  • Here are some ideas …
  • What does all of this mean?
    There are changes brewing in the C-suite
    While we are being asked to do big data analysis, deliver exceptional customer experiences, and create new ways to engage the customer
    More and more marketing leaders must take on the role of business and marketing leader
  • Think Customer First…
    we used to start with our push campaign. Start with an email…start with a commercial. Now, we have to think about the customer. Where is he/she?
    Where and how could he/she start an engagement that ends with multiple transactions of product and content?
    Add those media channels…and don’t forget ALL of the social channels where they might talk about their purchases…and then look to create a super-consumer…not just a single sale.
  • Questions?
  • Vince Ferraro and CMO Council 2014 Marketing Trends, Directions, and Insights

    1. 1. CMO Council & Vince Ferraro Trends, Directions and Insights Vince Ferraro Former VP of Corporate and Consumer Marketing, Eastman Kodak Company CMO Council Board Advisor SDSU College of Business Board Advisor 11/28/13 MENG San Diego
    2. 2. What I Will Cover • Top C-Level marketing trends • Research from the CMO Council that will highlight C-level executives’ sentiments on the trends in the marketing mix • What you need to do starting tomorrow 11/28/13 MENG San Diego
    3. 3. We All Want the Same Thing! New customers, conversion, sales Source: 11/28/13 MENG San Diego
    4. 4. And Response Marketing is Evolving Responsive Content 11/28/13 MENG San Diego
    5. 5. The CMO Council 6,500+ Senior Corporate Marketing Leaders $350 billion in annual marketing spend controlled by CMO Council Members Seven 11/28/13 Influential regional chapters led by Advisory Boards of brand leaders MENG San Diego
    6. 6. RESEARCH State of Marketing CMO Council 11/28/13 MENG San Diego
    7. 7. THE MULTI-CHANNEL CUSTOMER 11/28/13 MENG San Diego
    8. 8. 11/28/13 MENG San Diego
    9. 9. 144.8 billion emails sent worldwide…per day 8.6 trillion SMS messages sent 5.5 trillion App messages sent 11/28/13 228 billion MMS messages sent 554 million pieces of USPS mail processed per day MENG San Diego
    10. 10. Channel Reality: Email 11/28/13 MENG San Diego (Source: Epsilon)
    11. 11. Channel Reality: Mobile By the end of 2013, there will be more mobile devices on Earth than people. The average age for the first cell phone is now 13. 50% of the average global mobile web users now use mobile as either their primary or exclusive means of going online. The average consumer actively uses 6.5 apps throughout a 30-day period. Global mobile traffic now accounts for 15% of all Internet traffic. 91% of mobile Internet access is for social activities versus just 79% on desktops. One in three mobile searches have local intent versus one in five on desktops. 41% of people have used a mobile device to browse for a product after seeing it in a show or advertisement. 80% of mobile device owners use mobile to enhance their shopping experience. 36% of shoppers search for other store locations on their phones while shopping in store. Tablet users spend 50% more money than PC users. Source: 11/28/13 MENG San Diego
    12. 12. Smart Phones Are the Dominant Platform 11/28/13 MENG San Diego
    13. 13. Mobile Marketing Growth 11/28/13 MENG San Diego
    14. 14. Mobile 11/28/13 MENG San Diego
    15. 15. Video Drives Shopping •52% of consumers say that watching product videos makes them more confident in online purchase decisions. •Video is a driver of consumer confidence. Consumers are willing to watch videos 60% of the time they are found, and 52% of consumers report that they are less likely to return a product after viewing a video. •More than three out of five consumers will spend at least two minutes watching a video that educates them about a product they plan to purchase, and 37% will watch for more than three minutes. •The Step2 Company found that shoppers who view video are 174% more likely to purchase than viewers who did not. •Online retailer found that 33% of online sales came from the13% of site visitors who viewed video •34% of apparel shoppers are more likely to purchase after viewing an online video ad, versus 16% after watching an ad on TV Source: Invodo Video Statistics 11/28/13 MENG San Diego
    16. 16. Move Towards Integration and Personalization 11/28/13 MENG San Diego
    17. 17. Channel Reality: Social What do they like? • 67% of consumers want to be eligible for exclusive offers • 60% want the opportunity to interact with other customers • 65% want to gain access to games and contests 11/28/13 MENG San Diego (Source: CMO Council “Variance in Social Brand Experience)
    18. 18. Customer Reality: Over It What’s the reaction? • 41% would consider halting all business and no longer purchase from a company that continues to send impersonal, irrelevant clutter 11/28/13 MENG San Diego
    19. 19. Customer Reality: Over It Why did they disconnect or opt-out? • 46% because communications were not relevant to them • 73% were irked over receiving a promotion on a product they already bought • 39% ignore messages because they are flooded (in their mailbox and inbox) 11/28/13 MENG San Diego
    20. 20. THE MULTI-CHANNEL MARKETER 11/28/13 MENG San Diego
    21. 21. by 2017 the CMO will spend more on IT than the CIO - Gartner, January 2012
    22. 22. 36% of marketers admit digital strategy is made of random point solutions - CMO Council Integrate to Accelerate Digital Marketing Performance
    23. 23. Where Have You Seen Digital Success? 11/28/13 MENG San Diego
    24. 24. traditio nal 11/28/13 digital MENG San Diego
    25. 25. How Has Social Impacted Marketing? a. Improved customer listening & engagement b. Opened new avenues to gather insights c. Increased the complexity of planning 11/28/13 MENG San Diego
    26. 26. Blatantly web-jacked from Brian Solis
    27. 27. Blatantly web-jacked from Luma Partners:
    28. 28. What Concerns You About Social Investments? a. Requires resources we don’t have b. I can’t quantify ROI or impact on brand c. Requires new competencies we don’t have d. I can’t control what’s said about my brand online 11/28/13 MENG San Diego
    29. 29. 11/28/13 MENG San Diego
    30. 30. 11/28/13 MENG San Diego
    31. 31. 2013 MARKETING SPEND INTENTIONS 11/28/13 MENG San Diego
    32. 32. Marketing’s Mandate a. Lower costs & improve go-tomarket efficiencies b. Grow & retain market share c. Drive top-line growth d. Maintain high quality sales pipeline e. Improve customer insights 11/28/13 MENG San Diego
    33. 33. Budget as % of Revenue 11/28/13 MENG San Diego
    34. 34. Operational Allocations 11/28/13 MENG San Diego
    35. 35. Program Spend 11/28/13 MENG San Diego
    36. 36. Value of Vendors & Partners 11/28/13 MENG San Diego
    37. 37. Why So Down? 11/28/13 MENG San Diego
    38. 38. IN SEARCH OF THE KING 11/28/13 MENG San Diego
    39. 39. where are the digital hero's? 9% enjoy highly evolved digital programs 4% feel they are leading their category 7% are extremely advanced in leading with data
    40. 40. What Are the Leaders Doing? • They have high levels of approval and strategic support at the LOB & CEO level • Formed task forces with IT and partner with CIO • Turning to customers – not internal teams – to identify valued technologies and channels 11/28/13 MENG San Diego
    41. 41. What Are the Leaders Doing? • In the next year they will add: Marketing resource management Campaign & workflow management • 72% focused on the delivery of timely, relevant and targeted communications • Measure success through: 11/28/13 Conversion rates Up-sell & cross-sell opportunities Response and engagement rates MENG San Diego
    42. 42. Where Marketing Needs Help How can you help us? Source: The Economist Intelligence Unit Limited 2012 11/28/13 MENG San Diego
    43. 43. It is All About Integration 11/28/13 MENG San Diego
    44. 44. All of Marketing Is Content 11/28/13 MENG San Diego
    45. 45. Content in action Integrated Marketing Requires Content to Be Actionable 11/28/13 MENG San Diego
    46. 46. And Actionable Marketing Requires a Call to Action 11/28/13 MENG San Diego
    47. 47. Conclusions 11/28/13 MENG San Diego
    49. 49. be DISRUPTIVE! Customer Evolution = Customer Revolution Social, Social, Social Have LOTS of BFF’s Encourage Disruption..Then Make A Commotion!
    50. 50. Change Management in C-Suite • • • • • • Big Data Customer Experiences Customer Engagement Mobile Shift Revenue Optimization Personalized Content To do all of this heavy lifting, marketing needs be viewed as a center of excellence and take on dual roles as functional and business leader 11/28/13 MENG San Diego
    51. 51. Questions 11/28/13 MENG San Diego