CHANGES TO MARKETING ECOSYSTEM AND ORGANIZATION
We discussed three propositions in chapters 3, 4, and 5. These propositions, respectively, have major implications for marketing ecosystems and organizations. How do these propositions reshape the marketing community as we have known it in the past? Do they shrink the marketing organization or expand it? How do they reshape the departments, the agencies that marketers deal with, and the skills cultivated by these organizations over the past decades?
My attempt in this chapter is to identify three types of changes occurring in marketing organizations. First, there are major changes in the measurements and key performance indicators (KPIs). I will discuss the changes to these measures and KPIs, as well as our ability to more accurately report on the results. The second is a new wave of qualitative and quantitative skill sets needed to drive these propositions through marketing organizations. Next-generation marketers are as savvy as their customers, and are far more analytically driven. Third, the marketing business ecosystem is changing radically and I will go through the changes.
Marketing scholarship has studied the use of marketing techniques using “perfectly available” information. The aspirations all along in the marketing literature were for there to be freely available large-scale data, and the ability to take the minutest action and choreograph each action like the best New York symphony conductor. The reality was somewhere else. Marketers always craved data they did not have. The channels were at best available for broadcast, and were often controlled by gigantic contracts, and the choreography was neither feasible nor well understood. So, marketers built ways to work with the limited tools they had. The results were silos of organizations, competing budget priorities, and a fair number of skills devoted to data processing. There were miles of cubes of clerical people with calculators in the 1970s and with Excel in the 1990s, hunched over rolls of computer reports, and they massaged the data to make it ready for their decision-makers. When marketers abandoned certain markets, products, or segments, information technology (IT) could not even figure out which reports had to be retired. Reams of reports went to phantom marketing departments that no longer existed. It was hard to draw the information food chain. At one organization, I found and counted 1,500 people with “marketing analyst” titles. Most of them turned out to be pseudo-IT organizations outside the chief information officer’s (CIO’s) organization that were pulling data from different sources and reorganizing for their respective marketing function, each with its own set of claims on customer conversion and effectiveness, often overlapping and unverifiable.
Now, these organizations are rapidly changing. In many cases, these organizations are getting replaced with data service providers. In some cases, it is removing the walls across departments. A new breed of marketing scientist is receiving attention—the data scientist. The statistician in the back room has suddenly found the spotlight and a role in marketing strategy. Having a lot of observations radically alters the role of marketing researchers and media planners. If marketing organizations now have the ability to engage the customer in personalized micro-segmented communications, this changes the focus and role for product managers, promotion and pricing support functions, and direct marketing organizations and outsourcers.
Improved orchestration impacts product managers and advertising agencies, and brings advertising and promotion organizations closer to each other. Meanwhile, IT organizations grew in the shadow of the financial organizations and started with reporting to the chief financial officer (CFO). Over time, they graduated to the operational organizations and started reporting to the chief operating officers (COOs). The chief marketing officer (CMO) has now earned his/her right to be the next big customer or boss for the CIO, as enormous IT investments get diverted from other business groups to the CMO organization.