SapientNitro Global Marketing Series: The New Global Marketing Mindset by SapientNitro

SapientNitro Global Marketing Series

The New Global Marketing Mindset Article

of 3 The Evolution of Global Marketing | By Freddie Laker and Hilding Anderson

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 oneon-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.

INTRODUCTION

Understanding the New Global Marketing Mindset Strategy – Complexity Drives a New Approach

CMOs are operating in a new environment, one which, as we noted in “CMOs Reveal Global Marketing Challenges,” raises major new challenges to how global brands operate. Disruptive technologies and changing consumer behavior are making it more difficult to operate efficiently on a global basis. Our research shows that senior marketers feel that driving successful marketing on a global scale remains a challenge and will become increasingly challenging with each passing year.

connecto r

Top CMOs are embracing a substantially new approach toward strategy; multiple disciplines must be represented on strategy teams. Specifically, creativity, deep technology knowledge, data fluency, mastery of multiple business domains, and the ability to manage myriad specialists all should be represented.

strategist

Forrester Research “Best Practices In Organizing For eBusiness” December 2009, and Sapient’s estimate of CMO reporting structures in 2012 1

ivE i nterp reter

Our research and experience has shown that disproportional success comes through adopting a new global marketing mindset grounded in five core inter-connected pillars: strategy, experience, data, technology and organization.

Creat

Mastering this evolved global marketing mindset could be what defines the most successful brands of the next decade. But having a global mindset isn’t just for global brands; as businesses look to export their success into other markets, brands must increasingly defend against new global competition.

negotiator

Based on this research, we believe in the rise of a new global marketer. This new global CMO has characteristics of a traditional marketer, but also includes skills traditionally associated with a CTO and even the relatively recently-created CXO offices. A decade ago the eCommerce or Digital organization would have reported to the CIO, but today, we’re seeing about 50% report to the CMO, the single largest bucket of C-level oversight for Digital. You’re also seeing the rise of Digital as a CEO issue 1.

Having too many people at the table is problematic. It becomes a democracy. The best ideas should win, not the loudest people. [You need to] find the strategic partner who can deliver the right ideas. SVP Global Media at large global CPG firm The new mindset is about integrating a breadth of skills into one person or a small team. These highly desirable individuals can speak to brand as well as to digital and data; they can speak to the business contribution of all marketing efforts and to how those marketing efforts impact the business. This new strategist must be comfortable with the technology tools at their disposal, drive meaningful insights from all of the new sources available, think across cultures, and be able synthesize these materials into future opportunities. In our research, the role of the strategist--the key voice matching business needs to the consumer insights-- was also recognized. Often CMOs rely upon agencies to provide this thinking; in fact, 89% of marketers choose their agency partners based on the strength of their consumer insights 2. The new mindset-driven CMO embraces consumer insights and strategists who can use traditional research techniques in conjunction with the tremendous access to data now available at a global and local level. Strategists are now shaping new experiences, products and services, and they deliver customer service across platforms and spaces. Nike Plus and Nike Fuel Band are perfect examples of the evolution of marketing as a service. Nike Plus is a marketing tool, a service, and a product.

Social media is the classic example of this ‘silo busting.’ Businesses and agencies frequently don’t know where social media experts should sit, as it has relevance to and informs a variety of different areas including PR, customer service, advertising, and marketing. The strategists of tomorrow need to understand the implications of strategies on all areas of the business in the increasingly connected world. We’re seeing the initial moves toward this vision. Leading CMOs are creating integrated marketing councils chaired or led by one agency, which then marshals the skills and experience of other agencies on the council. This structure helps organize and structure the conversation, managing the number of voices at the table. CMOs must choose strategists who can navigate the different personalities and languages of the various business areas. They need to be adept negotiators and connectors and bring an understanding of different terminologies and languages. They are often more like interpreters. Senior leaders with the new global marketing mindset recognize the evolution of strategy. At the senior level, they ensure the right teams and skills are present throughout the global organization.

We’re hiring a different person. It is not enough to be smart enough to just do the job. You also have to be approachable, create a shared vision, and understand digital – all in a team environment. An important ability is to have the strategic vision, to influence and align around where business is going - without resorting to the hammer. North American CMO 89% of CMOs believe consumer insights capabilities are “moderately” or “extremely important” in the agency selection process. 2

In our research, an integrated experience design remains some distance from reality. Just 9% of senior global marketers believe their marketing activities are fully integrated. The research also showed that improving coordination of marketing efforts across multiple digital and traditional channels is moderately or extremely challenging for over 82% of CMOs. And it is getting worse, with 53% noting the trend will get more challenging in the next 3 to 5 years. Senior marketers have spent many years discussing the merit of big ideas, but at a global level big ideas have far less impact in comparison with organizing ideas. Organizing ideas aren’t campaign ideas but are an extension of the brand’s purpose that help to align the individual communication ideas within the broader experience space. The most successful organizing ideas focus on universal human truths that work easily across cultures. Examples include Coca-Cola’s concept of ‘Happiness’ and Apple’s ‘Challenging the Status Quo.’

Marketers mu st t ell n

The second element of the new global marketing mindset is a concept of experience design and the “organizing idea.”

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experience finishes w ithou t lea ding

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EXPERIENCE DESIGN (AT A GLOBAL LEvEL)

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Storytelling itself has evolved to accommodate disruptive technologies. The story continues to play a powerful role in building brand connections, but marketers must evolve their techniques to tell non-linear stories, where each experience has no end. In effect, no experience finishes without leading a consumer into another engaging experience. These techniques lead marketers to a new conception of the experience, one which spans multiple touchpoints and is rooted in the customer’s journey with your brand across those touchpoints. Creating these experiences, manifested from the vision of evolved strategists based on this level of insight across so many channels, will take a new type of creative partner. These “new global creatives” understands both multi-channel marketing and multi-channel commerce; they adopt a systems thinking approach – systems of ideas which connects disciplines, skills, and objectives together. They bring rich technology understanding and can dream of connected experiences that might link marketing to ecommerce and retail. They are able to think about how their creative ideas are part of a larger global ecosystem. They will create brilliant insight-driven ideas while still finding ways to drive efficiency and leverage scale. These “new global creatives” embrace technology fluency; they stop thinking about technology altogether and instead think only about relevant consumer experiences. By now it is perhaps clear that the gap to achieve the new global mindset in experience design is perhaps the greatest of any. Embracing the concept of an organizing idea and then rolling it out globally will require an extended effort, a new set of partners, and skilled team mates.

FIGuRE 6A:

MuLTI-CHANNEL MARKETING IS GROWING MORE DIFFICuLT Q: How challenging do you consider each of the following for your marketing organization? 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 Coordination of marketing efforts across multiple traditional media and digital channels

82%

11%

LESS

53%

15%

43%

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Data – Re-defining Consumer Understanding

Together, these sources are not only providing entirely new ways to mine consumer insights across global markets but are also increasing opportunities to create more relevant and personalized experiences to individual consumers or target groups. Data will increasingly demonstrate itself as one of the world’s most valuable commodities as our access to data rapidly re-defines our understanding of consumers.

Data accessibility throughout the organization emerged as a key factor for the future global marketing mindset. Companies like Harrah’s Hotels & Casinos give employees access to their vast loyalty data, enabling employees to create more rewarding and personalized experiences. Real-time marketing data should be accessible to internal marketing teams and agencies at both global and local levels not only to inform decisions but also to evolve experiences. CMOs who have embraced this new marketing mindset will embrace the use of these new data sources and analytics and tie them into their work in meaningful and actionable ways.

IBM Consulting “What is Big Data: Bringing Big Data to the Enterprise” accessed July 2012

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Companies’ appetite for data, guidance on how to use it grows every year. They understand that things in traditional and digital can be optimized; they need mastery of that data. Senior Agency Marketer

This trend is also accelerating. In our research, we found that 90% of the digital data today was created in the last two years alone 3.

Global retailer Walmart has been forthcoming on their practice of analyzing consumers’ social media posts to help predict relevant products that a consumer might desire while shopping online. Global commerce giant Amazon now uses its massive database of sales and consumer shopping data to provide behaviorallySenior Marketer, Global Beverage Company targeted display ads to advertising partners. Tesco’s Clubcard data is leveraged through its own separate data agency, Dunnhumby, enabling it to target specific shopping behaviors with products and offers; Tesco’s recent initiatives include the ‘Share & Earn’ Facebook app, which offers double Clubcard points to people who like, share and buy products on its ecommerce site.

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Deep repositories of knowledge about consumers are being built from myriad structured and unstructured data: website traffic, application log data, purchase behaviors, social media, CRM, marketing campaign responses, and even offline activities are now tracked and linked to a profile. Ever-increasing data is available from open third-party systems like Google Maps, real-time weather data, or even commodity price indexes in local markets. Together, these sources are not only providing entirely new global consumer insights but are also creating opportunities to create more relevant and personalized experiences to individual consumers.

Marketing will soon be digital by nature, it will just be integrated. Everyone will be thinking and monitoring in real-time.”

Top performers absolutely must embrace the potential of modern analytics to redefine consumer understanding. Knowing how to tease out the key relevant insights from the tsunami of big data will enable these CMOs to drive efficiencies as well as develop rewarding experiences for consumers. The ability to measure and adapt is key to the new marketing mindset.

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Figure 2:

How Are Tech-Savvy Marketers Different?

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CREAT IVI TY

To what extent do you agree with the following statement: The importance of managing global campaigns is greater than it was 5 years ago.

+10.9%

FIGURE 2 Much of the new breed of CMOs emphasizes the importance of deep technology knowledge on top of marketing expertise. How do these marketers ‘think different’ from traditional marketers? Most notably, they place much more importance on managing global campaigns, relative to five years ago. They also note the importance of global funding of back-end infrastructure and the challenges on changing consumer behavior. Finally, they’re less concerned about creative capabilities when selecting agency partners relative to non-tech savvy CMOs, likely due to their focus on crosschannel capabilities and the ability to build the technologies.

18%

+10.4%

Source: Q2 2012 online survey to 114 senior marketers with global responsibilities

24%

+22.7%

Tech-Savvy1

Non-Tech Savvy

% who strongly agreed

55%

29%

Difference

+25.4%

Back-end IT infrastructure to support digital marketing is best built/funded at a global level.

43%

24%

+19.5%

The interconnectedness of today’s consumer is breaking down the barriers between global and local marketing.

40%

24%

+16.3%

Our global marketing organization is prepared to deal with rapidly changing consumer trends around digitalization and globalization. Building our brand’s Social Media communities is best managed at a global level.

23%

28%

12%

How important are each of the following capabilities when selecting agency partners? Cross-channel expertise in both digital and traditional commerce

Best-in-class creative

N H C E T

Y G O LO

46%

52%

71%

-19.0%

Tech Savvy is defined as those who agreed or

strongly agreed to the statement ‘I consider myself to be very knowledgeable about technology (e.g. the back-end infrastructure for marketing programs)’

Technology – The Great Connector Technology plays two key roles in global marketing. First, it acts as the great connector for marketers. Delivering multichannel marketing and commerce experiences at a global level is a complex affair. The one thing that unites the disparate channels is technology. Technology enables data collection and analysis to bring strategy to life. You don’t have to be a geek, but understanding and respecting technology will help deliver connected experiences to your audience. Technology, once viewed as a detriment to creativity, has the potential to be the greatest enabler of creative expression and brand innovation.

Yet in our research, just 1 in 5 senior marketers consider themselves ”very knowledgeable” about technology. Our survey results also indicate consistent differences in how technology-savvy marketers perceive the world around them and the challenges they will need to overcome. In fact, by 2017, CMOs will purchase more technology than CIOs 4.

by 2017, CMOs will purchase more technology than the CIO. Gartner High-Tech Webinar Series, “By 2017 the CMO Will Spend More Than the CIO” January 3, 2012.

Second, technology also asks as the great connector for a different group – consumers. Digitization increases the rate at which ideas will spread through communities. Increased conductivity means that ideas can be spread further with less investment, particularly by consumers. This has huge implications at the global level. Digital communication technologies have been the ultimate disruptor in creating a new world of connected consumers. In many developing markets, the proliferation of mobile devices is bringing entire countries and consumers online for the first time. It’s the primary accelerator for globalization as it drives consumers into a more connected global community. Marketers must be able to leverage technology to meet consumers when they go looking for a brand online. Consumers also expect technology to deliver local relevance, even as their voices resonate at the global level. For example, NPR tested geolocal tagging to deliver local stories to the Seattle, Washington region over a 4-month period in late 2011. NPR found that local posts outperformed global stories six-to-one in terms of engagement rate on Facebook (likes, comments and shares as percentage of unique viewers). 5 Creating the right balance of global and local is more critical than ever. One key indicator of a leader who has embraced this new marketing mindset is the degree to which these leaders invest in technology solutions such as digital marketing platforms. These marketing technologies must enable companies to balance global efficiencies with

local relevance. In our survey, a strong majority of senior marketers (87%) agree or strongly agree that sharing digital assets across geographies is key to ROI. But simply sharing is not sufficient. The latest iteration of digital marketing platforms move beyond basic digital asset management systems to establish a system for rapid production of multi-channel marketing initiatives across devices, markets, and even brands – all while driving efficiencies. In our results, technology savvy marketers have a higher natural affinity to cost savings and efficiency plays. Another indicator of top leaders is that these technology investments are being made at a global level – inevitable given the magnitude of the investment. These leaders are using technology to balance global and local, in many ways the fundamental challenge of modern global marketing. It is more important than ever to understand local nuance and local consumer behaviors, even as cost and efficiency places an emphasis on centralization and reuse.

What’s driving global investment is the absolute expense of technology. For us to build separate CMS systems … in each country just doesn’t make sense. CMO at major retailer serving North America, Europe, Asia

These senior leaders also tend toward collaboration. Delivering these necessary systems effectively at a global level requires a strong

collaborative partnership with IT, but also with regional and external partners. In our research, senior marketers who are more comfortable with technology more strongly support collaboration by 20 points more than those who are less savvy. In sum, successful marketers must have technology fluency in their DNA or build a strong team around them with a high level of technical fluency. Understanding the interplay of digital with realworld experiences, and seamlessly integrating the brand across digital and non-digital channels are hallmarks of the new global marketing mindset. Technology understanding forms the foundation for the new global marketing mindset.

Technology understanding forms the foundation for the new global marketing mindset. 5 http://www.insidefacebook.com/2012/03/19/npr-seeks-to-help-media-organizations geotarget-facebook-content-at-scale/

Figure 3:

Organizational Design – Aligning For the Future

Team Coordination Is A Key Obstacle To Effective Global Marketing

The final element of the new global mindset is the human element. Today’s marketing approach demands a new and very complex mix of people. In our survey, three-quarters (77%) of senior marketers report that getting access to the right skills and people is moderately or extremely challenging.

Q: How challenging do you consider each of the following for your marketing organization? Is this less challenging, more challenging, or about the same as it was 5 years ago? In 3-5 years?

CMOs will need to get their organizations ready: a substantial look at the organizational structure and makeup is fundamental to the new mindset. The first step is acknowledging that existing structures are not sustainable and increasingly ineffective. Eighty-two percent of senior marketers reported that today coordination between digital and traditional is either moderately or extremely challenging; getting access to the appropriate skills and people across the organization is too difficult. In our experience there is no one definitive method that will prepare a business to successfully adopt the new global marketing mindset, but there are common themes that are delivering successful results. The right skills and people make all the difference. Technology fluent marketers, strategists and planners who worship data and think like global citizens, and multi-disciplinary creative types who dream without borders should permeate the organization. Digital can no longer exist only in a dedicated team; a systematic organizational redesign of structures is necessary. Global companies in particular need structure and organization to drive innovation and reuse on a global scale. These are two distinct areas of focus. Innovation is about creating pods or pools of specific skills in multiple geographies and then establishing a way for them to collaborate. Reuse is about productizing something done once so that is becomes repeatable. CMOs must recruit the right skills to deliver, skills we’ve listed earlier in this piece.

Digital is helping spur on global [centralized] investment – especially into technology – because of the investment needed. North American CMO

A balanced approach to local versus centralized conflict is also part of the organizational elements. A multi-channel, multi-disciplinary mindset is more important today than in earlier years. Major teams such as ecommerce tend to be centralized. On the other hand, digital marketing investment--once relegated to the regions–now must be at least somewhat coordinated globally.

There is no one answer for the organizational structure in the new global mindset, yet there is also no doubt that it will have to be addressed in a way that allows technology, data and experience to be unleashed in the local and global markets.

eCommerce used to run as a separate business unit. We were our own startup. But now, with omnichannel, we’re seeing a melding of a lot of those silos. Now digital expertise has to be throughout the organization – from the POS to customer engagement teams to the traditional direct marketing teams. We’re breaking down the barriers. North American CMO

Today

Relative To 5 Years Ago

Expected Change In 3-5 Years

% responding moderately or extremely challenging less Coordination between digital and traditional marketing teams

75%

Gaining access to the appropriate skills and people across the organization

77%

16%

13%

less

24%

56%

36%

18%

37%

38%

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 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

SapientNitro’s Multi-Channel Maturity Model Incentives

People & Culture

Processes

Technology

• Incentives broadly rolled out • Continuously monitored/ optimized / communicated

• Distinct multi-channel culture embedded in organization • Continuous cross-channel conversations occurring

• Processes updated for multi-channel • Completed end-to-end product lifecycle, shared future vision and scenarios

• Technology enables tracking of multichannel customers • Use of flexible cloudbased systems considered

• Full update to optimal structure for the organization type

Level 4: Limited Execution Implemented changes across high-priority channels

• Incentives adjusted in select cases

• Roll out initial activities and partnerships, working groups, vision

• Core processes updated for multi-channel

• Core technology upgrades rolled out

• Structural changes for high-priority areas completed

Level 3: Alignment Gained consensus on design elements to be changed

• Plan developed for addressing conflict

• Shared vision created • Broaden consensus • Determine approach to shaping culture

• Plan developed for crosschannel visibility

• Close on major investments needed • Vendor identified

• Executives have identified structural changes needed

• Identification of where incentives are in conflict completed • Baseline metrics set

• Conversations started • Consensus built around need for change

• Current state processes identified • Gaps identified

• Identified gaps in cross channel tracking • Created baseline state

• Executives have shared vision of gaps and current challenges • Consensus built around need for change

• Channel conflict and misaligned incentives slow the adoption of multi channel operations

• Culture fails to recognize the value of multi-channel

• Internal processes oriented to single-channel or siloed activities

• Technology gaps prevent single view of multichannel customer • Lack of flexible technologies

• Organizational structure inhibits optimized multichannel customer experience

Level 5: Optimized Full roll-out, organization is nimbly responding / executing on metrics

Level 2: Assessment Identified gaps and established foundational vision & baseline metrics Level 1: INITIAL Initial organizational status

Structure

About our research

Final Thoughts Global marketers face daunting challenges. The world in which their consumer lives is evolving more quickly than many can keep pace with, but keep pace they must. Aggressive changes must be adopted throughout global marketing organizations to ensure they’re meeting the consumer in the moment, anticipating their next step, and innovating to capture those opportunities to build brand and drive commercial results. Build a strong foundation in technology and let it permeate your business. Embrace the deluge of data created by consumers’ interactions with their digital world. Harness that data in meaningful ways and build strategies that cross silos and approaches. Then, deliver the experience consumers are seeking with brilliant and inspiring work that has unprecedented levels of relevance to the audience. The tools are there. Top performing firms and their agency partners are already adopting some or all of the five keys to the new global mindset to successfully build their brands with a worldwide audience. The five keys to the marketing mindset – a new strategic mindset, embrace of the role of experience design, an appreciation of analytics and data, deep technology savviness, and organizational flexibility–combine to shape the elements of the future marketers. Only the best prepared marketers who embrace this mentality will thrive.

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 key elements of the global marketing mindset, and the third on five ways agencies are struggling with global brands today.

About THE AUTHORS FREDDIE LAKER – is VP of Global Marketing Strategy and has extensive experience working across a broad range of global clients. He actively speaks at leading conferences around the world on topics ranging from global marketing trends to emerging disruptive technologies. HILDING ANDERSON is a Sr. Manager of Research + Insights, and focuses on digital strategy and the emerging digital consumer for SapientNitro. He is also the editor for Insights 2013, Sapient’s annual digital trends report.