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VIEWPOINT LEFT BRAIN MARKETING PLANNING A Forrester Research® Viewpoint Written by David Pickton based on research by Shar VanBoskirk, Forrester Research, Inc.
ABSTRACT Purpose This Viewpoint is based on research undertaken by Forrester Research into the impact of technological change on consumer behaviour, especially media habits, and the implication this holds for marketing planners. Currently, it is believed that marketing planners are out of step with new customer behaviours growing out of the changing consumer technological environment. Left Brain Marketing Planning emphasises the need, opportunity and the means by which planners can adopt more analytical procedures to improve marketing planning by greater use of data-driven approaches that permit the selection and allocation of marketing resources based on an holistic picture of customers across all points in the buying process. Methodology A two stage approach adopted by Forrester Research. First, a Marketing Allocation Tool was devised using Forrester’s Consumer Technographics® data to understand how consumers interact with 13 media. These were used to index each medium against four marketer inputs: business goals, target audience, product type, and targeting approach. Second, interviews were conducted with marketers and agencies to understand current marketing planning processes and best practices and their response to the Marketing Allocation Tool. Interviews were also held with marketing planning experts for additional perspectives around how they anticipate marketing planning will change over the next 5 years. Findings Principally, current marketing planning processes are based on traditional approaches that take too little account of the new realities brought about by technological change. The media selected in the marketing planning process do not reflect the media habits of today’s consumers. New technology has changed customer behaviour and new technology holds the means by which this can be monitored and evaluated to assess the effectiveness of marketing plans as they are implemented. Changes need to be made, and the means are at hand to achieve such changes, that allow more analytical approaches to marketing planning in understanding what is happening in today’s
marketplaces and not just an emphasis on marketing metrics for the purpose of meeting internal financial imperatives. Contribution of the paper There is much debate about the dynamics in marketing planning between creative approaches and a greater emphasis on marketing metrics to ensure greater marketing accountability. This paper highlights the importance of analytical approaches that do not, of themselves, limit creativity. While encouraging the use of measurement and analytical tools, the paper emphasises the need to use these throughout the planning process and exploit the facilities enabled by new technology to assist in the process of better understanding consumers and communications and buying processes. Left Brain Marketing Planning offers a three step approach in which step one is to adopt analytical planning tools, step two - use experimental design principles and step three - redesign the planning process. Keywords: Marketing Planning, Marketing metrics, Marketing accountability, Analytical planning Category: Viewpoint
VIEWPOINT LEFT BRAIN MARKETING PLANNING A Forrester Research® Viewpoint Written by David Pickton based on research by Shar VanBoskirk, Forrester Research, Inc.
Forrester Research, a leading independent technology and market research company that provides forward-thinking advice about technology’s impact on business and consumers, believes that current strategies for allocating marketing resources fall short in two important respects: i) they do little to help marketers deliver a high return on their investments and ii) they fail to account for the rapidly changing buying and media behaviour of customers and consumers. Forrester’s Left Brain Marketing Planning provides a customerbased, but marketer-led, data-driven way to decide how to allocate marketing resources. It emphasises the importance of analytical approaches to marketing investment and this view will resonate with those who previously have argued the benefits of marketing metrics. However, there is an important distinction between a plea for marketing metrics and Forrester’s Viewpoint. What is particularly significant is that Left
Brain Marketing Planning has grown out of a recognition of what is happening in today’s marketplaces and not just an emphasis on marketing metrics for the sake of meeting internal financial imperatives (important though they are). As such, Forrester’s approach is much more overtly marketing, rather than organisationally, driven and as such, should sit more comfortably with a much wider audience of marketers. A second important feature is that Forrester’s approach offers a way forward. It is not just rhetoric surrounding a petition for greater marketing accountability that is better able to measure what has always been done before. Left Brain Marketing Planning recognises the need for new planning and resource allocation processes as well as the technology that offers marketers the mechanisms to facilitate these in their development, measurement and control. Left Brain Marketing Planning, then, is A data-driven planning approach that allocates resources based on a holistic picture of the customer across all points in the buying process from awareness to post-purchase. Based on their research and their experience, Forrester believes that marketing planning in many organisations might well be out of step with the new customer behaviours growing out of the changing consumer technological environment. If this is the problem, Left Brain Marketing Planning is their solution in which they advocate the adoption of analytical planning tools, use of experimental design principles, and the reshaping of the planning process as a three-step antidote. Indeed, Left Brain Marketing Planning is set to change the world of marketers, agencies, market research providers, media companies, and customers/consumers. The argument for this lack of synchronicity between market behaviour and marketing planning is based on marketers’ apparent predispositions to maintain old habits. In the States, for example, advertisers spend as little as 6% of their marketing communications budgets online while customers spend 34% of their media time online (Li and VanBoskirk, Forrester Research, Inc., 2005). In this example, the process of deciding which media to spend money on has not kept pace with changing customer behaviour or the capabilities of new interactive channels. New opportunities arising out of the Web, Internet, kiosks, mobile technologies, viral communications, and contact optimisation systems can all help marketers reach their sales and branding goals. Outdated planning processes and today’s/tomorrow’s technology realities require a new, more scientific way to plan that focuses on actual customer behaviour and objectively considers all marketing resources to avoid missing customers at crucial points of influence. While technology has changed customer behaviours dramatically - their media habits and their purchase processes, it has also created the means to assist marketers in responding to this change. As a research company, Forrester’s contentions are not based on intuition but on their own Consumer Technographics ® data to understand how consumers
interact with 13 different media. Data are used to index each medium against four marketer inputs: business goals, target audience, product type, and targeting approach. Forrester has held in-depth interviews with marketers in a range of large organisations representing clients, agencies, media and research. Their intention has been to discover more about current marketing planning practices and the anticipated changes for the future. Their key findings, in a nutshell, are not likely to be surprising to many: old plans are repeated; there is over-dependence on traditional mass media (especially TV for those larger consumer companies); new media are not tested; the planning process is too frequently handed over to the agencies; and there is a focus on reach rather than on customer behaviour and intent. And why are such habits detrimental to the new realities? Technology has dramatically changed the face of the marketing. Media usage has fundamentally shifted with the advent of interactive media vehicles and with it, customer expectations. The purchase process has changed. To believe otherwise is to have missed the point, although each marketing situation needs to be assessed in terms of the relative impact and implications of these changes. But technology has also given marketers an important advantage. It has created the ability to deliver more information. At a time when the accountants are calling for greater marketing accountability, the means to achieve this are at hand. Technology is able to play an increasing role in the marketing planning process so marketers can be smarter about their customers, deliver more relevant marketing communications, and measure the impact of their campaigns. Marketing automation, data warehouses, Web analytics, interactive media, CRM software, and contact management systems are all examples of technologies playing increasing roles in the marketing process. As Forrester (VanBoskirk, 2005) puts it, “they enable marketers to shift from mass branding to an approach that better suits capricious customer behaviours: cross-channel integration of customer-facing channels” (p.3). Left Brain Marketing Planning encompasses the strategy, tools, data inputs, and team required to make decisions about the marketing resources in which to invest. Forrester propose a three-step process. Step One: Adopt Analytical Planning Tools Here a change of mindset may be needed to change the set of tools used by marketers. Data need to be used that maps customers’ paths to purchase. Current planning tools, for example, help manage media or track its cost-perreach, but new tools analyse customer and market data to determine what customers do as a result of a marketing stimulus and, therefore, which marketing resources will move customers along their paths toward ultimate purchase. Reach and frequency metrics need to be replaced with behavioural and attitudinal data (from such sources as site activities, purchases, call centre or email interactions, surveys, and offline observations) that identify points of influence along a customer’s path to purchase. Media planners already have an arsenal of data-driven tools to optimise message delivery to the right demographic. But these tools do not predict customers’ propensity to
buy. Tools are available, or are under development, that integrate customer attitudinal data with multimedia usage and sales activity to determine which marketing resources will stimulate customer actions. As the tool set becomes more advanced, marketing mix models can be developed to track how multiple marketing initiatives drive sales or other business goals like increasing brand awareness or new customer acquisition. In an XMOS study (Cross Media Optimisation Study – an approach developed by the Interactive Advertising Bureau, the Advertising Research Foundation, Rex Briggs and Dynamic Logic) modelling future media performance, Universal Studios determined that spending 2% on banners, 72% on television, and 25% on rich media online ads was the best way to drive awareness and sales of its DVD release of “E.T.” Step Two: Use Experimental Design Principles Left Brain Marketing Planning applies the precepts of experimental design – a proven way of testing product design as well as direct marketing campaigns – to drive planning. Bringing experimental design into planning means not accepting old ‘truths’ or simply doing things the way they have always been done. In a rapidly changing marketplace, doing the same as before is not a safe option but carries with it the same sort of risk as experimentation. Trying new approaches, therefore, should not be feared. It does mean however, that testing needs to be done continually, but in a world of new technology, this is not only desirable, it is feasible. Flexibility is the watchword - not being tied into extended media deals or commitments. The new media facilitate this and, increasingly, traditional media will follow suit to keep pace with the new competitive media landscape. Step Three: Reshape the Planning Process The path of least resistance for most marketers today is to default media planning, and thus a sizable part of their budget, to their agency of record. Left Brain Marketing Planning requires innovation and expertise that will only come through engaging specialists who can optimise a diverse marketing mix. This will require heightened integrative skills. Left Brain Marketers will: • Build a network of specialist agencies. Experts in their own fields in channels, customer cohorts, or research are better than a one-stop shop at providing the experience and resources necessary to support targeted marketing options that may best motivate customers to take action. Hewlett-Packard’s enterprise group, for example, fosters innovation by organising media-neutral planning sessions with a group of select multinational, multi-channel agencies. This has implications for extra effort (and, possibly, skills) needed by marketers to bring these resources together and to control them, not handing over that control to third parties. • Play a more active role in agency relationships. This is a natural and direct consequence of the use of specialist agencies. Marketers are already taking more initiative in agency relationships overall – billing-based compensation declined from 71% in 1982 to 21% in 2000 as advertisers built pay-for-performance and campaign expectations into agency agreements (Beals and Beals, 2001; Davis, 2004). ‘Owning’ agency relationships does not mean agencies are demoted, but it does require
marketers to study their customers actively, set agency-relationship parameters, and keep agencies accountable. • Shift the posture of physical channels. Marketing planners are deeply invested in conventional marketing tools and processes. To develop marketing strategies that align with customers’ purchase processes, organisations must invest in predictive tools and respond to marketing changes through all channels. • Incorporate non-marketing people into the planning team. Left Brain Marketing Planning needs staff and skills beyond marketing, or at least traditional marketing, including statisticians, design experts, and accountants. Data analysts will identify customer points of influence, and designers will help orchestrate valuable customer experiences. Comcast, for example, has created a marketing science division dedicated to developing segmentation, targeting, recency-frequency models, and analytics to improve marketing planning. Content provider, Factiva, another example, found that since its marketing efforts focused on branding, not results, it spent too much time and money meeting with unqualified leads who were either not good targets or not ready for a sales conversion. New CMO, Alan Scott, set up a results-based marketing planning process that determines which marketing resources best meet the needs of a prospect at each stage of the sales cycle. The process was able to identify the right target and time to leverage different marketing events – including a sales call or meeting. The Factiva system was based on using customer data to determine marketing allocations; data management systems, that they called their Unified Profile Database, to track customers through their sales cycles; and multiple partners to facilitate planning which utilises research, strategy, technology, data and Web specialists to build this new ROI-focused planning system. Management Implications of Left Brain Marketing Planning Market, industry and environmental changes are drivers for Left Brain Marketing Planning. These changes are, themselves, both forcing and facilitating new marketing realities. Marketers are challenged to respond to them. These new realities carry with them a range of implications that should be seen as opportunities to develop better, more efficient and more effective marketing. They are interrelated. In brief, they include: • Outcome driven focus away from input driven focus • Customer purchase process tracking leading to identification of crucial points of influence and the use of appropriate communications to take advantage of those crucial points • Better use of technology to aid marketing planning – more accurate and directly relevant information • Use of integrated and accessible databases • Managing marketing through specialist agency networks
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New industry platforms and ratings will be offered by research companies to deliver the measurements required by left brain marketers Agency holding companies will form new marketing planning functions. Media planning and buying divisions will be converted into marketing planning businesses Improved marketing resource allocation will lead to greater efficiencies and effectiveness. Better resource allocation decisions, better plans, better implementation and better control Development of market mix modelling to facilitate the allocation of marketing resources Being able to carry out marketing more effectively and efficiently because it is better directed and timed towards influencers and key stages in the customer purchase cycle Industry and the marketing profession will be challenged to ensure it adopts reasonable and ethical practices in the personalisation of communications as purchase and media habit data are combined ever more effectively. As customers help marketers filter the right offers to them by self-selecting products and offers they find relevant, marketers may be in danger of going overboard in personalising communications by combining declared preferences with ones inferred through their purchases via tracked media activities - cable, online, and wireless. In response to a consumer outcry about how to protect their personal information, Parliamentary and Congressional Acts may be passed limiting access to consumer information and outlining the ethical use of such data.
The transition to Left Brain Marketing Planning will happen gradually over the next five years as marketers and media companies abandon embedded systems for tools, processes, partners and marketing communications formats that allow for closer accountability of how marketing moves customers toward purchase. Marketers with deep data stores, an analytics heritage, and a willingness to experiment will lead the way.
References Beals, D. and Beals, S. (2001), Agency Compensation: A Guidebook, Association of National Advertisers Davis, J. (2004), Optimising Advertiser / Agency Relations, Association of National Advertisers Li, C. and VanBoskirk, S. (2005), US Online Marketing Forecast: 2005 To 2010, Forrester Research Inc VanBoskirk, S. (2005), Left Brain Marketing Planning, Forrester Research Inc
Forrester Research, Inc. (NASDAQ: FORR) is an independent technology and market research company that provides pragmatic and forward-thinking advice about technology’s impact on business and consumers. MIP expresses its appreciation to Forrester ® for their assistance and permissions in producing this Viewpoint.
