Marketing in the Accelerated Economy · Retail Point of Sale, Retail Marketing & Promotion,...

Marketing in the Accelerated Economy

A Marketing Services Industry Report

AUGUST 2016UK EDITION

© 2016, TKM Consultants and Mtivity. All rights reserved.

Sponsored by:

Contents

1. Executive Summary

Marketing in the Accelerated Economy

About the Survey

2. Key Findings

The Move to Omni-Channel Has Just Begun

Repositioning the Importance of Print

Key Marketing Campaign Bottlenecks

The Demand for Transparency

Marketing Technology is Driving Innovation

The Move Toward Globalization

Market Differentiators and Future Growth

The Paradigm Shift

What Excites You About the Next 12 Months?

3. Conclusions


Marketing in the Accelerated Economy The Marketing Services industry is undergoing a complete transformation driven by a proliferation of new technologies, channels and business models that are changing the way com-panies engage and interact with consumers. Marketing agen-cies are being challenged not only to keep up with the chang-es, but also to determine how to best capitalise on them to help clients compete and win in this ever-changing landscape.

Overarching these trends is one uber-challenge all marketing teams now face: the demand to bring complex, multi-channel campaigns to market at unprecedented speed. In particular, marketing agencies are being asked by clients to prove they can deliver more value faster than the clients can achieve on their own.

At TKM Consultants, we call this the Accelerated Economy.

Illustrating what’s at stake, a recent article in Harvard Business Review found a dramatic increase in the number of companies that no longer work with outside marketing agencies—27 per-cent, up from 13 percent in the previous year. The number one reason cited by HBR for companies bringing their marketing in-house? Speed.

Executive Summary

1According to the article’s author:

“An executive from one of the world’s largest agencies told me that his company was too big—and consequently, too slow—to compete in the lightning-fast digital space. “We have too many people,” he said, “too many contracts and too many ap-provals to be able to react and work effectively in a real-time world. The work is moving closer to where the customers are, where the responses can be more rapid and connected.”

This overarching need for speed is being driven by the matura-tion of web, mobile and social technologies that are creating more opportunities—and more competition—than ever before. New businesses start up in days, not years. Consumers can instantly research products and services, read reviews, and find the best price, all from their mobile device. Campaigns that used to take months to execute are now created, sourced, and delivered in days or weeks.

At TKM Consultants, we believe the marketing agencies that understand and act on these new dynamics are the ones that will be best poised to help their clients win in the Accelerated Economy. Those who don’t will continue to lose ground to faster, more nimble competitors.


4 EXECUTIVE SUMMARY

Definition of Terms Used in This Report

The Marketing Services landscape covers a wide range of organisations, capabilities and services. To ensure clarity and consistency around industry terms and to create a point of reference, we are defining Marketing Services as:

Any service that creates, produces, distributes or measures cus-tomer facing communication. These marketing services have a history in print-related advertising, but market forces are driv-ing a move to multi-channel marketing, including web, e-mail, video, mobile and social media.

The vendors that offer these services can be defined in a num-ber of ways, from Marketing Services Providers, Point of Sale (POS) Agencies and Print Managers to Production and Brand Activation Agencies. For the purpose of this document, we use the term “Marketing Agencies” to describe organisations that operate in the Marketing Services industry.

THE ACCELERATED MARKETING ECOSYSTEM

At TKM Consultants, we believe the marketing agencies that understand and act on these new dynamics are the ones that will be best poised to help their clients win in the Accelerated Economy. Those who don’t will continue to lose ground to faster, more nimble competitors.

© 2016, TKM Consultants. All rights reserved.

Data Analytics

Reporting

Testing

Learning

ROI

Scoring

Data Insight Partners Agency Partners

In-House Skills

CONTENT STRATEGY

Brand Story

Analytics Strategy

Style Guides

Wireframes

Commercial ProgramBrand Architecture

Brand Activation Partners

Resize

Translate

Format

Scale

Present

In-House Skills

Technology Partners

Paid (print, advertising) & personalisation

Earned - social

Owned channels - website

MEASU

RE

CREATE

PRODUCE

D

ISTRIB

UTE

User Jo

urney

User Journey

Marketing Experience: social, mobile, web, e-mail, influencer analytics, SEO, loyalty, gamification, A/B testing

Marketing Operations: DAM, MRM, marketing acceleration, Procurement, BI, marketing mix, approvals, localisation

Data Layer: CRM, data management platforms, transactions, e-commerce

Middleware: the plumbing

Copyright © TKM Consultants 2016

An effective content framework is imperative to driving marketing acceleration, with consistent, connected technologies, partners and processes.

NOTE: All bar chart percentages are based on a “Response % based on the top 3 rankings.”

5 KEY FINDINGS

About the Survey TKM Consultants work with leading marketing agencies world-wide to provide the technology insights, strategies and services they need to compete and grow globally. As an independent consultancy, we are frequently asked by our clients for objec-tive information on the key trends driving the industry. We saw a need for fresh data to help our clients better understand the market forces creating these changes. We also wanted to share the latest insight into how the industry is prioritising the different challenges and what strategies are being developed in response to these forces.

To achieve our goals, we partnered with Mtivity, a leader in Marketing Acceleration software, to create a survey designed to gather insight, opinions and data from top executives at leading marketing agencies on the state of the industry. Our intent is to provide a snapshot of the industry as it stands today, and insights into the direction that leading marketing agencies are taking to compete and win in the Accelerated Economy.

This report is based on an invitation-only survey of 180 Mar-keting Agency Leaders from a cross section of marketing firms predominantly based in the United Kingdom. Recognizing that marketing as a discipline is rapidly moving to an omni-channel model, we targeted the survey at marketing agencies with a strong cross-section of capabilities that include:

POINT OF SALE

MARKETING PRODUCTION

BRAND ACTIVATION

CONTENT MARKETING

PRINT MANAGEMENT

MARKETING SERVICES

SHOPPER MARKETING

FULL SERVICE/ INTEGRATED

PACKAGING MARKETING OUTSOURCE

We engaged with senior executives at these firms in order to get top-level insights into strategic directions and business goals. The roles we surveyed included:

» CEOs, Founders, Directors

» Managing Directors

» Operations Directors

» Procurement & Sourcing Directors

» Business Development Directors/Heads of Sales

» Technology Directors

» Studio Directors

While there are numerous small boutique agencies and in-dividuals in the marketing services space, we wanted to get

insights from the firms being challenged to serve multiple clients —many of them well-known brands with the most demanding requirements.

Of those companies that participated:

» 71% currently serve more than 25 clients

» 29% currently serve less than 25 clients

The survey was conducted in order to explore attitudes and generate insight around those areas that are having significant impact on business strategy, industry relevance and growth.

The focus of the survey was on six key themes:

» Omni-Channel Marketing

» Campaign Management

» Campaign Procurement

» Marketing Technology

» Global Campaigns

» Market Differentiators

This report is based on an invitation only survey of 180 Marketing Services Industry Leaders from a cross section

of marketing agencies predominantly based in the

United Kingdom.

71% OF THOSE SURVEYED SERVE MORE THAN 25 CLIENTS


Key Findings

2Brand Activation, an integration of Retail Point of Sale, Retail Marketing & Promotion, Experiential, Relationship & Influencer marketing, thus bringing together a variety of channels, will be worth $740 Billion by 2020 in the US. —Association of

National Advertisers

Technology Innovation is Driving Demand for Accelerated Marketing ServicesOur survey of top executives at Marketing Agencies in the UK show that powerful forces are reshaping the industry. At the same time, some commonly held assump-tions—such as the rapid decline in demand for print—are, upon further examination, not necessarily happening as quickly as some might think. Some of the key trends shaping the industry include:

» Marketing Technology Innovation: the explosion of MarTech in the last few years is making it possible to create, source, execute and measure campaigns faster than ever before. This is putting pressure on marketing agencies to perform faster, without sacrificing quality.

» Globalisation: Technology is accelerating the pace of globalisation for brands, and marketing agencies are following suit. Our survey found that more than half of the marketing agencies surveyed are operating in five or more countries.

» Measurement: As pressure continues to build on marketing brands to deliver measurable results, there is a corresponding demand for data and visibility into marketing agency procurement processes. Marketing agencies are setting them-selves apart by offering clear visibility and accountability into their marketing supply chain.

The following section highlights the key findings from our survey. For a full briefing on the results of the survey, contact us at www.tkm-consultants.com.


7 KEY FINDINGS

The Move to Omni-Channel Has Just Begun

The growing demand to meet consumers wherever they may be in their purchase journey is driving the move to omni-chan-nel campaigns. Interactive print ads linked to digital and video content; interactive packaging linked to social promotions; and in-store experiences combined with point of sale and point of activation are seen regularly within marketing campaigns. These campaign strategies enable greater customer acquisi-tion, retention and reactivation.

As consumers become more sophisticated and the buyer journey more complex, brands have reacted accordingly by developing always-on ecosystems, not just a series of cam-paigns based around a calendar of product launches. As a result, marketing agencies must develop the services and skills to support these content ecosystems, by investing in people and technology to drive effective, optimised marketing imple-mentation, procurement, operations and customer experience.

Brands continue to aspire to a single customer view, with print, retail, web, video, broadcast, email, mobile, social and OOH all playing a critical part. However, as our survey indicates, this trend is still in its infancy, with less than 50% of respondents saying their clients are delivering omni-channel campaigns, but instead are focusing on a smaller number of proven channels.

LESS THAN HALF OF CLIENTS ARE DELIVERING OMNI-CHANNEL CAMPAIGNS TODAY

41%

70% OF THOSE SURVEYED SAY MORE THAN HALF OF THEIR REVENUE IS PRINT-RELATED

70%

Repositioning the Importance of Print

Much has been written about the demise of print from the marketing mix, as companies increasingly invest in digital channels. However, our research indicates that this trend is not accelerating as quickly as some may think. In fact, 70% of our survey respondents said that more than half of their revenue remains print-related.

Corroborating our findings, recent research from JWT, the lead-ing creative agency and part of WPP, found that over 50% of millennials would prefer for print to remain a significant factor in their lives, even in the face of ever-increasing digitization.

According to research from Millenial Marketing:

“Superficially, it looked like digital media was preparing to replace print for good. A closer look reveals that print hasn’t yielded; it has instead shown new potential in the arena of marketing promotion that it might never have developed without the digital age.”


8 KEY FINDINGS

Further confirming the role of print, 80% of respond-ents said Marketing Print is the channel most utilised in client campaigns, followed by Packaging & Point of Sale. Email and Digital & Online Video tied for third.While there is no denying the increasing role of digital media in campaigns, our respondents say their clients are look-ing to ensure print is used effectively alongside digital, video, social and mobile, and marketing agencies competing to win business must be well placed to facilitate this capability.

Top Marketing Bottlenecks

In an always-on, global world, the processes required to cre-ate, source, deliver and measure the impact of marketing cam-paigns are growing increasingly complex. Multiple channels, languages and currencies, different time zones and cultural differences all demand a high degree of collaboration, flaw-less execution and impeccable timing. If one element is off, the entire campaign ROI can be significantly impacted. Key

CHANNELS MOST UTILISED IN CLIENT CAMPAIGNS

0 10 20 30 40 50 60 70 80

MARKETING PRINT 80%

PACKAGING/POS 65%

EMAIL 50%

DIGITAL/ONLINE VIDEO 50%

10% 20% 30% 40% 50% 60% 70% 80%0%

0 10 20 30 40 50 60 70 80

TOP CAMPAIGN MANAGEMENT BOTTLENECKS

CLIENT REVIEWS & APPROVALS 79%

CREATIVE DEVELOPMENT 74%

SOURCING & PROCUREMENT 52%

ANALYTICS & REPORTING 42%

10% 20% 30% 40% 50% 60% 70% 80%0%

Key processes through-out the marketing

supply chain can create bottlenecks that delay

or degrade the effectiveness and

ROI of a campaign.

80% of respondents said Marketing Print is the channel most utilised in client campaigns.

processes throughout the marketing supply chain can create bottlenecks that delay or degrade the effectiveness and ROI of a campaign. We asked respondents to rate the impact of these bottlenecks on campaign execution, including:

» Creative Development » Project Management » Client Reviews & Approvals » Sourcing & Procurement » Analytics & Reporting

Of these, client reviews and approvals was the area most cit-ed as a concern, followed by creative development and then analytics & reporting.


9 KEY FINDINGS

The Demand for Transparency

As the trend in marketing toward more data and more meas-urable metrics continues, clients are asking marketing agency partners for greater visibility in relation to every aspect of the marketing supply chain. In particular, survey respondents were clear that they are being asked to partner more closely with their clients, provide better reporting dashboards and deliver greater procurement transparency. This may be why 58% of marketing agencies surveyed are also looking for better ways to benchmark and measure supplier performance.

Clients are asking agency partners

for greater visibility and data in relation

to every aspect of the marketing

supply chain.

58% OF MARKETING AGENCIES SAY CLIENTS

ARE LOOKING FOR GREATER PROCURE-

MENT TRANSPARENCY.

0 10 20 30 40 50 60

53% SAY CLIENTS ARE REQUESTING BETTER PROCUREMENT DATA AND REPORTING

58% WANT TO IMPROVE HOW THEY BENCHMARK SUPPLIERS

10% 20% 30% 40% 50% 60%0%

YES 58%

NO 37%

YES 53%

NO 32%

DON’T KNOW 16%

DON’T KNOW 5%

10% 20% 30% 40% 50% 60%0%


10 KEY FINDINGS

Marketing Technology is Driving InnovationThe increasing use of technology in marketing isn’t news to anyone who has been paying attention. The Marketing Operations Technology Market, including MRM, Market-ing Procurement, Digital Asset Management and Marketing Acceleration will be worth approximately $6 Billion by 2020.

According to the now infamous marketing technology landscape “supergraphic” de-veloped by Chiefmartec.com, the number of marketing technology vendors has grown from around 150 in 2011 to over 3,500 today.

The marketing agencies we surveyed over-whelmingly acknowledge the extent to which technology im-pacts their success, with 88% saying that the role of technology in winning new business is either important or very important.

Respondents rated Project Management and Workflow as their top investment priority, in a near tie with Reporting Dash-boards & Visualization. Global management and Localization was third, followed by Cross-channel Campaign Management and Benchmarking and Pricing.

The downside of this explosion in marketing technology is the growing confusion about which tools, solutions and platforms

0 10 20 30 40 50 60 7010% 20% 30% 40% 50% 60% 70%0%

PROJECT MANAGEMENT & WORKFLOW 63%

REPORTING DASHBOARDS & VISUALIZATION 62%

GLOBAL MGMT & LOCALISATION 44%

X-CHANNEL CAMPAIGN MGMT 38%

BENCHMARKING & PRICING MGMT 25%

TOP MARKETING TECHNOLOGY INVESTMENT PRIORITIES

88% SAY THAT THE ROLE OF

TECHNOLOGY IN WINNING

NEW BUSINESS IS IMPORTANT

OR VERY IMPORTANT.0 10 20 30 40 50 60 70

USABILITY 67%

SPEED & PERFORMANCE 60%

10% 20% 30% 40% 50% 60% 70%0%

TOP MARKETING TECHNOLOGY DIFFERENTIATORS

DEPTH OF FUNCTIONALITY 53%

GLOBAL FEATURES 33%

provide the most value, and are most effective in accelerating campaign return on investment. This presents an opportunity to reframe the value of technology for marketers.

When evaluating and selecting marketing technology to deliv-er operational effectivenes, our survey showed that there was a clear leading requirement, with usability ranked in the top 3 by 67% of respondents. Speed and Performance, Depth of Functionality and Global Features received the next three highest scores for areas of differentiation.


11 KEY FINDINGS

The Move Toward GlobalisationGlobal campaigns are fast becoming a reality for brands of all sizes. Even small and growing brands are thinking more about international reach and consistency of message, knowing that their audiences will be interacting with them across multiple channels and across different geographies and currencies.

Global activation, procurement and asset management are enabling marketing agencies and their clients to work effec-tively across time zones and cultures. Over 70% of marketing agencies surveyed say that global capabilities are required to compete in today’s Accelerated Economy.

59% SAY MORE THAN HALF THEIR CLIENTS ARE PLANNING GLOBAL CAMPAIGNS

59%

71% SAY GLOBAL CAPABILITIES PROVIDE A COMPETITIVE EDGE

71%

REGIONS TARGETED FOR EXPANSION IN NEXT 12 MONTHS

However, less than half said their clients are actually plan-ning global campaigns today. There is still time for marketing agencies to develop their global strategy and capabilities, and invest in the software that will enable global marketing acceleration.

Because globalization is a key trend impacting agencies and their clients everywhere, for the purpose of this survey, we targeted marketing agencies operating in multiple regions and countries. Of those companies that participated, 56% have operational capability in 5 or more countries. Global expan-sion is on many agency agendas, with Europe, North America and the Middle East the top 3 regions targeted for expansion.

0 10 20 30 40 50 60

EUROPE 57%

NORTH AMERICA 36%

MIDDLE EAST 36%

56% OF MARKETING AGENCIES ARE OPERATING IN 5 OR MORE COUNTRIES.

10% 20% 30% 40% 50% 60%0%


12 KEY FINDINGS

Market Differentiators & Future GrowthThe Accelerated Economy is driving marketing departments to restructure their organizations around new capabilities and skills. For marketing agencies, the need to grow and retain revenue streams, and to create competitive advantage, is accelerating an increase in partnerships, mergers and acquisitions.

When asked what the main differentiators clients look for when selecting a marketing agency, Cost was the number one factor for 76% of respondents, followed by Creativity and Speed & Responsiveness.

COST 76%

CREATIVITY 53%

SPEED& RESPONSIVENESS 47%

HOW CLIENTS RANK MARKETING AGENCY DIFFERENTIATORS

10% 20% 30% 40% 50% 60% 70% 80%0%

The Paradigm Shifters: The Marketing Services OpportunityMarketing agencies that evolve, keep up with the pace of change and embrace technology are exceptionally well placed to guide and innovate alongside the Global Brands in order to move up the marketing value chain. These paradigm shifters will continue to lead and commercially thrive. Paradigm resistors will at best follow, and potentially fail.

Paradigm Shifters

Paradigm Resistors

Rise to the challenge of technologyDrive automation and accelerationDecision makersUnderstand how data can work for themLeadership across organisation and industryLegacy BuildersCulture of discovery and learningDeveloping a MarTech Strategy

OPPORTUNITY

Prefer to stay as they areStick to known until unknown is proven or imposedFollowersSilo mentalityProject doersReactiveSuppliers not Trusted PartnersTechnology tentative, no MarTech Strategy

THREAT

Copyright © TKM Consultants 2016

THE MARKETING ACCELERATION PARADIGM SHIFTA Paradigm Shift implies a fundamental change in approach. Those organisations that embrace the opportunity and rise to

the challenge of technology and automation, develop a culture of discovery and learning, and display strong leadership will be well positioned for success.


13 KEY FINDINGS

We Asked: What Excites You About the Marketing Services Industry Over the Next 12 Months?

We asked our senior panel of participants what excites them about the Marketing Services Industry over the next 12 months. Sound bites relating to strategies that are clearly shaping the industry over the next 12 months and beyond were provided. Here’s a selection of what we heard:

“The disruption of traditional market-ing business models, cost models and

organisational structures.”

“The rate of change, increasing fragmentation of the market

and uncertainty about the future makes it very exciting.”

“The continual migration to connect Shopper solutions.”

“Brand globalisation and the opportunity to personalise content

on behalf of clients at scale.”

“The growth in knowledge of how powerful Content is

in the marketing mix .”

“Organisations don’t want to spend money on mar-tech solutions but they will need to. Focus on the

outcomes and the benefits of technology.”

“The massive growth of clients’ in-house agency delivering

advertising content production.”

“A need to introduce a marketing tech solution(s) to our agency to

develop a stronger point of difference.”


Conclusions

14

3Marketing Agencies Must Embrace MarTech to Ensure Future CompetitivenessThe forces of globalisation, technology automation and increasing competition are changing the way brands go to market and compete for customers. As a result, brands are turn-ing to marketing agencies for strategic guidance and access to the technologies that will ensure they can compete and win in the Accelerated Economy. Marketing agencies that fail to deliver campaigns and services with agility and speed across channels and geography are at risk of losing their clients.

To fail to recognise technology as being intrinsically embed-ded within modern day marketing would be at best a short term oversight that needs to be quickly resolved, and at worst a company’s natural demise to eventual industry irrelevance.

Brands are Moving Towards Global Campaign Execution

Marketing agencies must be ready to manage multiple ap-proval cycles and complex, cross border procurement and sourcing networks through the utilisation of market leading technologies with the level of usability, project management and transparency desired by their clients.

Procurecon’s Marketing Procurement Conference earlier this year cited agility as a key differentiator for marketing procure-ment, and it is against this criteria, along with cost,that market-

ing agencies will be evaluated. Having the right MarTech eco-system to accelerate procurement across all channels should be a key area of investment moving forward

Better Reporting, Dashboards & Visual Data are a Must Have

When selecting the right technologies, whether it be Paid (Print, Broadcast), Earned (Social) or Owned (Web) Media, marketing agencies must ensure they are able to deliver cus-tomised dashboards and visual data for measurement and re-porting in order to contribute towards the ROI calculation that is crucial for longevity and success. Marketing Procurement continue to demand greater transparency, as budgets are scru-tinised and supply chains rationalised. Being the most cost effective marketing agency is a great start, but having the tools and software to prove it will ensure client retention.

Understand & Articulate How It All Fits Together

Marketing agencies must understand how the various channels work together whilst retaining core specialism to provide ef-fective marketing ecosystems for their clients. This may require a greater degree of flexibility and often a cultural change, where partnerships and technology can be selected and de-ployed quickly with value delivered seamlessly in days rather than weeks or months, supporting the need for Brand agility in todays Accelerated Economy.


15

DisclaimerThis report is published by TKM Consultants and as such, all original IP contained within remains the sole property of TKM Consultants.

Reproduction of this publication in any form without prior written permission is forbidden.

The information contained herein has been obtained from sources believed to be reliable. TKM Consultants disclaims all warranties as to the accuracy, completeness or adequacy of such information.

TKM Consultants shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein are subject to change without notice.

TKM Professional ServicesThe influence of Technology on Marketing today has never been greater. TKM Consultants advise on which marketing technolo-gies (MarTech) and services best suit your business and support their implementation. We provide Industry Leading Reports on both MarTech and the wider Marketing Services Landscape.

TKM Acquisition Scout We work with Marketing and Full Service Agencies looking to both acquire or maximise their business value through ac-quisition. Our extensive network, knowledge of the marketing services landscape and expertise will position your business for maximum exposure to the widest range of potential companies and investors through to a successful outcome.

For more information visit www.tkm-consultants.com.

About Mtivity

Mtivity is transforming the way marketing services firms world-wide deliver value to clients. Mtivity’s Marketing Acceleration Platform automates and streamlines complex processes through-out the marketing supply chain, accelerating revenue-generat-ing campaigns to market while generating substantial savings that can be reinvested to drive growth. Using Mtivity, marketing teams can source, create, collaborate, and execute campaigns with unprecedented speed and quality. For more information visit www.mtivity.com.


Marketing in the Accelerated Economy · Retail Point of Sale, Retail Marketing & Promotion,...

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