© 2007 Canadian Marketing Association What’s Keeping Marketers Awake at Night John Gustavson...

© 2007 Canadian Marketing Association

What’s KeepingMarketers Awake at NightJohn GustavsonPresident and Chief Executive OfficerCanadian Marketing Association

CMA Ottawa ChapterJanuary 30, 2007


10 buzzwords not to use ina marketing presentation…

1. outside-the-box

2. synergy

3. the big idea

4. ROI

5. paradigm shift

6. customer-centric

7. critical mass

8. buzz

9. it is what it is

10. low-hanging fruit

…from the home office in Wahoo, Nebraska

Courtesy the Creative Group


Four market realities1. Post-Enron marketplace -- More

shareholder/public scrutiny2. Ethical and trustworthy companies

being rewarded with higher degree of customer loyalty

3. Government will step in if we don’t effectively self-regulate

4. Canada facing economic uncertainty


Four marketing realities1. Consumers have more choice

2. Technologies changing at lightning speed • Push marketing doesn’t work anymore• Consumers determine how they will interact

with marketers

3. New media leading to brand fragmentation

4. More pressure on marketers to make measurable contribution to bottom-line and to deliver strong brand value


1. Building brands in a complex environment2. Marketing ROI3. Managing the customer relationship4. Emancipation by technology 5. The talent crunch6. The delivery infrastructure7. Government’s agenda

– National DNC List / telemarketing rules– Consumer privacy– Identity theft

Hot marketing issues


Building brands ina complex environment

Hot marketing issue


Hot marketing issue

• Building brands in a complex environment– Eight key factors

1. Globalization/internationalization– Impact of U.S. and international brands – Challenge “Canadianizing” global brand– Local brand management – is Canada just a U.S.

branch office – are decisions going south?

2. The empowered consumer– More choice -- Today’s average consumer hit with 20

times as many messages compared to five years ago– Control of experience – driven by want vs. need

The Brand


Hot marketing issue

• Building brands in a complex environment– Key factors (continued)

3. Media– Cutting through the clutter major challenge for brand

managers– Proliferation of new media/fragmentation– Consumer-generated media/interactive– Message blocking/filters– Shouting “at” consumers doesn’t work – successful

organizations talk “with” consumers

The Brand


Hot marketing issue


4.Technology– Consumer customization, personalization– First to market importance– Moving from supply to demand economy– Pace of change unpredictable -- Time to market/cost to

market

5.Economic pressures – CMO taking back seat to CFO

The Brand


Hot marketing issue


6.Demographics–Baby boomers vs. the online generation– Impact of Canada’s multi-cultural mosaic

7.More public moral code–Moral persuasion / government “suasion”–Ethical business wins

8.Organizational change – who owns the brand?

The Brand


Brand 101The Brand Hierarchy

Brand Esteem

Customer Experience

Brand Knowledge

Relevance

Differentiation/ Leadership

Bra

nd S

tew

ards

hip

The governing ideals that marketers leverage to build brands


Global-ization

Empowered Customer

Media Technology Economic Demographics Moral Code

Organizational

change

Differentiation & Leadership ** * ** * *Relevance

* *** * *Customer

Experience ** * * * *Brand

Esteem * * ** * *Stewardship

* ** ** * ***Brand Knowledge/ Comm. ** * ** ** ** *


Hot marketing issue

• Building brands in a complex environment– Conclusions:

• The brand is in a period of progressive change• Organizations that are flexible & relevant will win• Marketers need to engineer the ideal customer

experience• Marketers need to better understand what makes

the empowered consumer tick

The Brand


Hot marketing issue

MARKETING ROI


Barriers to marketing ROI:

1. Difficulty agreeing on common definition

2. Lack of accepted cause and effect

3. Lack of data reporting capability

4. Lack of finance buy-in -- arriving at a number that will withstand CFO scrutiny

Marketing ROI


Hot marketing issue

• Marketing ROI– Marketers under constant pressure

to prove their impact on overall business• Challenges:

– Main challenge for marketers is to better understand what they’re measuring and why

– Pressure from CEO/CFO to provide immediate short-term results can jeopardize long-term brand health (equity markets focus on quarterly returns)


Hot marketing issue

• Marketing ROI– No longer realistic to function in a silo where

activities and successes are separate from overall corporate goals

– Successful marketers shifting measurement thinking from being campaign/product ROI focused to being more customer centric

– Latest Longwoods AdTrac study finds that 80% of marketers agree with the statement “it is important to have a measure of ROI that deals with delivery and consumption across multiple channels”


Hot marketing issue

MANAGING THE CUSTOMER RELATIONSHIP


Hot marketing issue

• Managing the customer experience– Managing the customer relationship where

the consumer is more empowered is especially daunting

– Marketers need to:• Respond to customers’ individual needs• Anticipate changes in those needs• Have the right tools to deliver


Hot marketing issue

• Managing the customer experience– Canada above global benchmark in:

• Data collection and use• Customer information• Customer experience

– Canada falls below global benchmarks in terms of process management, technology support and retention


EMANCIPATION BY TECHNOLOGY

Hot marketing issue


Hot marketing issue• Emancipation by technology

– Personalized media technologies have spawned a "networked self" that is shaping consumer marketing and society at large

Faith Popcorn

– Seismic shift in brand-customer relationship• Negative customer experiences are broadcast to the world

– Blogs, MySpace, YouTube• Impact of search marketing

– Does Google own the brand?


Hot marketing issue

• Emancipation by technology

– Flip side: More choice for marketers• Important to engage in two-way dialogue• Push marketing doesn’t work anymore• Blog disclosure/transparency a major issue for

corporations and consumer groups– “Paid” bloggers cited in Edelman/Wal-Mart case –

October 2006


Hot marketing issue

• Emancipation by technology

– Conclusion:• New technologies are universal listening tools• Creative marketing using new technologies can

be very rewarding if done right -- it can also be destructive and dangerous for a brand


THE TALENT CRUNCHHot marketing issue


Hot marketing issue• The Talent Crunch

– Inability to attract and retain talent number one threat to Canadian corporate profitability

Accenture – December 2006

– 26% of Canadian employers find it difficult to fill permanent professional positions (lumped into this group are marketing staff) due to lack of available talent that is threatening growth plans

Manpower Inc. – October 2006


Hot marketing issue

• The Talent Crunch– Staff turnover big issue

• Average CMO’s tenure just 23 months/brand manager on the job for 18 months

• Impacts brand• Impacts agency/client relations

– Major loss of intellectual capital when personnel changes every two years


CMA educational programming

• Conferences– Advertising/Marketing Forum February 15– B2B Marketing March 1– Not-for-Profit (half-day) March 28 & Sept. 20– Word of Mouth Marketing April 12– Branding June 21– Regulatory September TBA– Digital Marketing October TBA– Direct Marketing November TBA– Marketing ROI November 22

• Seminars (Spring 2007)– E-newsletters, introduction to direct marketing, blogs, data mining,

copywriting, loyalty programs, effective persuasion

• Customized in-house training


Hot marketing issue

• The delivery infrastructure– Current four-year agreement between

Canada Post and CUPW expires Jan. 31/07• Talks under way to reach negotiated settlement• Potential summer of labour unrest


Hot marketing issue

Government’s agendanational DNC listtougher telemarketing rulesconsumer privacyidentity theft


Government agenda


Government agenda• National do-not-call list

– Dec. 2004 -- Bill C-37 introduced in House of Commons

• Spelled potential disaster for business

– 2005 – CMA appears before government• CMA successful in securing:

– Exemption where there is an established business relationship

– Reasonable penalties– Exemption for charities

– Nov. 2005 – Canada introduces amended legislation


National DNC List

• Definition of “existing business relationship”:

– 18 months – exists where a consumer has made a purchase or donation, has rented, leased or contracted for, or has otherwise participated in a organizations provision of products or services within the past 18 months.

– 6 months – exists for six months from the dateof an inquiry or application from a consumer


Government agenda

• Telemarketing

– Several outstanding issues (B2B exemption, list cost to business, government responsibility for execution, enforcement, complaint investigations and consumer education)

– Choosing DNC List operator part of government procurement process

– February/March: RFP to be issued– Late 2007/Early 2008: DNC list up and running


Government agenda• CRTC also conducting wholesale review of all

telemarketing rules (Note: No exemptions here)– CMA still stands by 2004 position

• Need for universal calling hours• Seller-specific internal DNC lists• No agency-specific DNC lists• No need for unique registration number• No toll-free number or live agent requirement• 31-day enforcement window (for both internal & national

DNC lists)• No change to existing and contact info rules• ADADs and voicecasting permitting for B2B & EBR

telemarketing• PDD: maximum 5% abandonment rate

• Spring 2007: CRTC to finalize telemarketing rules


Government agenda• Consumer Privacy

– Federal privacy law undergoing mandatory five-year parliamentary review

• Consumer groups want higher level of consent and stronger enforcement

• Privacy Commissioner:– Not looking for more enforcement power– Believes law is “generally working well”– Some concerns around notification of privacy breaches

and transborder flow of personal information


Government agenda

• Review of federal privacy law– CMA appeared before Commons Committee in

mid-December (first national association to appear before hearing):

• Law appears to be working well• Too early to make any substantial changes


Government agenda

• Review of federal privacy law– CMA position on data breach notifications:

• Organizations have responsibility to notify consumers where loss or theft of personal information poses reasonable risk of harm

• Challenge to establish correct threshold for triggering notification

• Need for national guidelines


Government agenda

• Review of federal privacy law– Outcome unknown at this time– Growing uncertainty:

• Escalating pressure from privacy advocates for tougher privacy laws

• With prospect of federal election, easy win for politicians

– Hearings continue– Draft report expected in Spring 2007


Other major threat – identity theft


Other major threats

• Identity theft– People believe their personal information is at

risk – phishing attacks, transaction security, credit cards, spam

– Number one privacy concern or “worry” for Canadians

– Top consumer complaint at U.S. FTC


Other major threats

• Identity theft – phishing attacks– 176 brands hijacked in October 2006– Single record for one month (96 brands

hijacked in October 2005)– Financial services

#1 targetSource: Anti-Phishing Working Group


Conclusions

1. Consumers more empowered than ever before

2. More and more difficult to build brand

3. More pressure to deliver ROI

4. New media/technologies changing at lightning speed

5. Big brother is watching


Ongoing CMA role

• Government relations• Self-regulatory initiatives

– Do Not Contact service– Code of Ethics and

Standards of Practice

ADVOCACY


Ongoing CMA role

• Expanding “marketing thought leadership” offering on the hot issues facing marketers– New marketing blog:

www.canadianmarketingblog.com – New Advertising and Marketing Forum on

“The Business of Ideas” – February 15– B2B Conference – March 1– New content on CMA website: www.the-cma.org

KNOWLEDGE


Ongoing CMA role

COMMUNITY


10 buzzwords not to use ina marketing presentation…

1. outside-the-box

2. synergy

3. the big idea

4. ROI

5. paradigm shift

6. customer-centric

7. critical mass

8. buzz

9. it is what it is

10. low-hanging fruit

…from the home office in Wahoo, Nebraska

Courtesy the Creative Group


What’s KeepingMarketers Awake at NightJohn GustavsonPresident and Chief Executive OfficerCanadian Marketing Association

CMA Ottawa ChapterJanuary 30, 2007

© 2007 Canadian Marketing Association What’s Keeping Marketers Awake at Night John Gustavson...

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