CMO point of view: David Morgan
David is a global marketing executive with over 25 years’ experience in international marketing and brand development. He has held senior leadership roles for five of the world’s largest companies; Samsung, Citibank, Procter & Gamble, Standard Chartered Bank, and most recently Nestlé, where he held the position of Executive Director of Corporate Affairs and Marketing, Oceania.
What is driving the increasing complexity of marketing?
The marketing function has changed dramatically over the last 10 to 15 years. Go back to the classic years of marketing – the 70’s and 80’s –when the brand manager structure was embraced by everyone after being invented by Proctor [and Gamble] in the 60’s. That brand manager was responsible for understanding the consumer, product development, distribution and brand development – the four pillars of commercial management. They were responsible for the profit and turnover of that business. It was complex but made simpler by a bunch of service communities there to help – finance, consumer insights etc. Seventy percent of your time was spent on consumer and product development.
The marketing comms at the time was outsourced to your agency because what you had at that time was two or three big “shouts” a year – two or three 30 second commercials. The agency was singular and the group account director you dealt with was singular. You strategized and planned with them and they executed the production and the whole communications plan.
What’s happened over the last 15 to 20 years is that multi-nationals have shrunk the size of the marketing community and the marketing budgets. They’ve transferred a lot of the marketing support into sales support. For example, formerly a consumer insights/research department in marketing might be 50 strong, now it’s three people and it’s looking after other territories as well.
And the complexity of marcomms is greater. You’re not managing two shouts a year; you’re managing the whole marcomms process across a multitude of channels, including channels you haven’t worked in before, digital and social media. The complexity is borne of the big shift in what marketing has become – more comms-centric, less commercial-centric. But as soon as you lose commercial responsibility you lose your power.
We’re seeing a greater use of data in marketing than ever before. Where do you see this going?
Because the Australian population is so small, direct marketing is not a skill set we’ve developed in this country. Other countries have had experience in good paper-based segmentation and analysis through products like the Readers’ Digest but we haven’t so we think we’re inventing it now. But Lester Wunderman invented direct marketing in 1962. Now, the greatest boon to direct marketing is online data but we don’t have the skills sets and we don’t have an ecosystem of support. I could name the real experts in data systems and management – the data scientists – on one hand. And they’re very expensive skill sets to buy in because they can earn more on the west coast of America. So we have to take their models and apply them here, for example, combining data sets from three or four different non-competing companies so you get a single view of the consumer in all facets of their life – their media life, their interests, their purchasing and their daily commodities. The richness of the insights is the incentive for the non-competing participants to provide their [customer] data – the insights go back to all of them. Some businesses are really ahead with this – sports betting for example.
Currently there’s pressure by Coles and Woolworths for [brand-owning] businesses to show that they’re supporting a brand and that usually means [paying for] television. But Coles and Woolworths are data hungry businesses – they’ll lead the data revolution – they’ll prove the consumer pull-through model where they can show what activity pulls what transactions, as opposed to the push model where you push messages onto customers.
The marketer as content producer is a strong trend, what are your views?
If you look at Facebook, we all have 150 friends; if you look at YouTube, there’s hours of video being uploaded every minute. So there’s too much for us to look at. There are eight brands that you allow on your Facebook page on average. There are aspirational brands – shoes, jewelry, cars; there are entertainment brands – for example Foxtel, Nike, Adidas; and there are “need to have” brands, for example if you are a parent those brands are in your life because you have kids. So once you have those on your page, seven spots are gone. And there are a thousand customer facing brands – household cleaners, food, snacks, shampoo – fighting for that last spot on your page. There are a thousand brand managers who believe they can get that spot by creating content that will go viral.
“I think we’re going through a naïve learning phase – ‘content is king’ - therefore we think we all need to be content providers.”
It’s nonsensical. I’m not going to buy a household cleaner because they did a funny joke. I’d buy a beer because they did a funny joke – that’s the context beer exists in in my life, it’s there for entertainment – but household cleaners and shampoo aren’t.
Only entertainment and leisure brands can develop content in that way. Pepsi for example has really wired into content that people share. They can do that because they’re part of my entertainment set, they’re quite frivolous as a brand. But a bank can’t do that – I don’t want to be entertained by my bank; just be there when I need it.
I think we’re going through a naïve learning phase – ‘content is king’ – therefore we think we all need to be content providers. But look at who we’re up against – Foxtel, TV broadcasters, Netflix, Microsoft, Sony, Samsung – they’re all in this space. The whole Gangnam Style explosion was engineered by Samsung to promote Korean lifestyle. Samsung bankrolled the nine or 10 Korean celebrities who appeared in Psi’s video; and they paid Britney Spears and Beyoncé to tweet about it. That’s content marketing.