Disrupting the Marketing Services Ecosystem in 2014

By | December 16, 2013

Consumer goods marketers employ a cadre of contractors, agencies and consulting firms.  That’s not going to change much in 2014, but what will is the role these parties play.  Something must change: “According to a recent Deloitte survey of 4,047 respondents encompassing 28 product categories and more than 350 brands, brand loyalty is declining.”

The Deloitte study cited in this Inc. article describes price-sensitive consumers still reeling from recession as the norm, challenging any attempts to develop brand affinity.  The solution?  “Brand segmentation,” which requires consumer goods companies to:

“Rethink their product portfolio in light of the widening gap between the affluent and lower-income households.  Consumer products companies may need to have distinct strategies (e.g., brands, product offering, pricing) to target affluent and lower-income consumers.”

That sounds like a data and analytic problem.  How prepared are CPG brand marketers to attack it?

The Consumer Data Asset

Data about your consumers should be your data – not something outsourced, scattered among contractors.  This data and its insight could be an asset that drives better decision making across the organization.  If it were, it would be accounted for on your company’s balance sheet.  None of this means you need to necessarily own the technology that collects, analyzes and puts consumer data to use.  It does imply that traditional marketing services companies purporting to offer this capability simply cannot.

Marketing service provider business models are based on the premise that their clients care little about the underlying data and marketing technologies working behind the scenes.  Instead, they emphasize servicing virtually any outsourcable marketing need.  Diversity to this extent makes for thinness in certain areas that is more apparent than ever; it’s impossible today to be expert at everything a marketing organization may require.  It’s leading many to retreat and reposition as the market shifts back to preferring best of breed providers.

This makes marketing services providers ill-equipped to handle the realities of a data driven world – one characterized by big data, the proliferation of consumer channels and rapid technology innovation.  The pace of change is so fast, only firms putting their full prowess behind adapting are capable of delivering the most differentiated capabilities.

It’s why you see many CPG companies investing in and partnering with start-ups creating new social networks, mobile applications and other ways of engaging consumers.  Most CPG companies are missing the parallel opportunity to work in a similar fashion to make the most of data from all marketing efforts across brands and channels.  Just look at Unilever’s recent announcement for the latest evidence that something’s not working.

In a data driven world, the quality and effectiveness of marketing technology isn’t an inconvenience to be delegated to a services company; it’s a mission critical competency that generates insight with immense value.  This is Teradata’s position and one which resulted in a service offering based on our work with Procter & Gamble that will disrupt long-held notions about the firms most qualified to provide the best data driven marketing services.

The Best of the Best

Teradata is not an agency, nor the “hands on the keyboards” executing campaigns.  Instead, we offer as a managed service the best blend of database, data management, governance, security and privacy, and cross channel campaign management technology – all integrated and delivered as a service, as described by P&G recently at our customer conference.  Teradata professional services knows our technology better than anyone else, and can most effectively and efficiently deliver on the promise of class leading integrated database and campaign management technologies.

 Database Management  Campaign Management

This approach allows CPG marketers to focus investments in agency services on what they do best – strategy, creative and campaign execution – while offering a consistent data and analytic foundation to power and measure their programs.  This not only holds agencies more accountable, it helps highlight areas of excellence to be modeled and replicated.

Regardless of industry, most Teradata clients use our technology to support marketing.  This translates into innovation across our database and marketing solutions.  Customer-led innovation fuels differentiated marketing capabilities that benefit all business-to-consumer marketers whether it’s delivered on-premise or in the cloud.

Picking the Right Partner

In October of this year, McKinsey’s Global Co-Lead of Digital, David Edelman, posted an article to LinkedIn titled, “Time for Marketers and Agencies to Shake it Up.”  His piece describes the need for agencies to change the nature of their business models to focus on higher value services.  He also says:

“Who do you need as a partner? When every different channel has its own specialist agencies claiming expertise in it, a client can get overwhelmed by a mix of as many as 14 different traditional, media, digital, social, mobile, sponsorship, etc. agencies. If each corporate business unit and geography gets to choose their own agency, the complexities are overwhelming and negate much opportunity for scale or cross-channel coordination.”

Agencies and marketing services companies are not prepared to address these issues – it’s simply not the business they’re in.  Replacing redundant and wasteful database and technology development efforts across the contractor ecosystem with standards helps agencies deliver the most impactful and measurable creative.  Standards also yield consistent and comparable metrics across brands and campaigns; an absolute necessity at a time when marketers are under the microscope (“The heightened focus on marketers and their related costs will spur marketers to better use analytics”).

It’s clear current methods are lacking amid a market of price-sensitive consumers.  Traditional approaches are unable to deal with the realities of a drastically changed marketplace.  Teradata represents a new generation of services partner ready with best in class technologies to help CPG marketers succeed in this new data driven world.

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Gib Bassett

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