Organizational Simplicity

Today’s marketing organizations are facing even more than ever the problems of any functional discipline of large corporations: Extreme inefficiency due to an organization that is stuck in a multitude of silos. It’s still surprising that the extreme pressure of marketing in the 21st century has not changed significantly the make up of marketing organizations.

Over the last 12 months I have observed one solution that can address this malfunction in marketing organizations: Simplification. The solution lies in simplifying any organizational elements of marketing teams. Most Chief Marketing Officers build a highly complex marketing organization with a multitude of external partners instead of simplifying the organization. A couple of thoughts on simplification in marketing organizations

• I recommend that any marketing executive thinks of three key functions that its marketing organizations need to fulfill: Information, Imagination, and Execution. Information is the discipline of synthesizing the relevant data points into meaningful insights; Imagination is the discipline of steering a brand into realm of always engaging interaction between consumers and the brand; Execution is the discipline of making things happen aligned with the defined information driven brand strategy on a daily level. All marketing groups need to fulfill one of these three purposes; any other group is probably irrelevant, maybe even destructive.
• Most Marketing Organizations have too many external partners instead of reducing the numbers of service providers to a handful that they trust and respect. It’s not uncommon that Fortune 500 companies have over 100 external marketing service providers on a global level, or just in North America over 50. The search for always the best providers in every singly subfield underestimates the complexity and the increasing inefficiency of too many service providers. I don’t believe that any marketing organization can manage efficiently more than 10 service providers. If there is need for more very specific services, let some of the already existing service providers do the management.
• Too many Marketing Executives don’t assess strategically the core assets that the organization needs to build and have. The decision of what should reside in-house and what can be outsourced is too often shortcut and not diligently pursued. Every executive should put on one simple piece of paper the functions that are strategic competitive advantages (and should therefore reside in-house) and the ones that will and should be commoditized (and should therefore be outsourced).

Too many CMOs try just to replace existing individuals and 3rd parties instead of changing the fundamental root of dysfunctional marketing teams: High Complexity with too many players.

Big bad data

This week I was fortunate enough that Advertising Age published some of my thoughts that I developed on this blog over the last month (http://adage.com/print?article_id=115045). The reactions that I got from different members of the marketing community have been quite educational. Let me try to summarize them:

• A lot of professionals outside of our analytical and data-centric community were interested in the thought of “Data Democratization”. The interest in data driven work is growing, we just need to use the momentum to make our work even more relevant and results oriented. People are watching what we are doing.
• Many professionals believe in the power of data as a potential change agent but they express their insecurity and ignorance of how to make it work in their organization. Over the next weeks I will try to write a more detailed approach of how to democratize data in bigger organizations with clear goals of improving marketing performance. It seems that the willingness to move towards a more data focused corporate environment exists. There is just a huge knowledge gap of how to attack it.
• Quite some professionals are a bit confused about the benefits of visualization. Everyone likes pretty pictures but some are challenged to move beyond the visually appealing nature of the images to really use them as inspiring tools that drive marketing decisions. There is more education necessary.
• Creatives love the idea of utilizing data to create art like objects. Sometimes they are easier to be persuaded to use data within this framework than other professions (e.g. Client Services). Who would have known.

More to come.

Asymmetry

Reading in last week’s Fortune magazine (February 19th edition) about the increasing popularity of Zillow.com, I thought about a close similarity between Zillow’s mission and our core job as marketing geeks: Zillow’s tries to provide all participants in the real estate game (Buyer, Seller, Agent) with more and relevant information to create a balance of information between all participants. Let met quote the Fortune magazine: “The real estate industry is based what economists call information asymmetry, which simply means that one party (typically the seller) knows more about a product than the other (the buyer). It’s an opaque market that encourages obfuscation and leads to flawed pricing. Zillow is to make real estate more like a stock exchange, a transparent market where all the information about every property is readily available, and as a result pricing is perfect.”

That’s exactly the core mission of any data driven marketing analyst: Providing all discourse partners (e.g. clients, colleagues from other functions) with the same and most relevant information. Our obligation is to create a symmetrical information discourse. Let’s dissect this analogy into its three core areas:

• Information transparency: The biggest challenge in our marketing field is twofold: Do we have all the relevant information necessary to solve a challenge, and secondly, are we able to reduce the huge amount of information into the relevant actionable one in a transparent manner. Zillow.com is focusing first on solving the second challenge, now it’s trying to get to more difficult to obtain information, too (e.g. what does a neighbor know about the Pro’s and Con’s of the house next door?).
• Stock exchange: There is no equivalent of a public stock exchange in our marketing market, since most of the marketers play in closed circuits of their own company and their key marketing partners. There is no interest in sharing the necessary information beyond this inner which would be necessary for a public stock exchange. But the stock exchange parallel has some strong implications, if one imagines that we would apply the principle of a stock exchange to exactly this internal group. Here all players have all the relevant information and can “bet” on the right marketing strategies and ideas. It’s similar to certain companies’ R&D efforts where they use a company internal stock market to decipher the most promising R&D projects.
• Perfect pricing: Our “perfect pricing” is the right marketing strategy and program with the biggest ROI. This could happen if the internal stock exchange principle is executed and enough players participate in it. The wisdom of the company internal marketers (and its key partners) would create the best marketing mix derived from all relevant and accessible information.

I have tried to show the analogies and discrepancies between Zillow’s mission in the real estate discourse and our analytical function in the marketing discipline. There is still more to understand and to learn. I will definitely watch curiously Zillow’s future moves, successes and failures.

The best Marketing Analyst

Marketing Analysts come in very different forms and shapes. Some are new to the field, some have done it for over 20 years, some are changing the status quo, some are just happy to run SQL queries. I am still trying to figure out how to recognize great marketing analysts when I meet them. It’s one of the most difficult analytical tasks that I have encountered. Maybe it helps to start with first, defining the most important qualities of marketing analysts and then secondly, to discuss what kind of different types of marketing analysts do exist.

In finding outstanding marketing analysts I am looking primarily for three qualities, some of them probably rather unusual:

• A healthy dose of Paranoia: Paranoia remains one of the most underestimated drivers for success, especially in our marketing field. Why? Most great marketing concepts have not been developed because of strong confidence or certainty about a situation but because of the fear of failing. The paranoia of not being good enough, of not pushing the boundaries sufficiently, is often the driving force to be on the frontline of innovation. Positively used paranoia can be the most important motivator to constantly score your own marketing performance against the competition, and thereby drive one to breakthrough work.
• Curiosity: Curiosity is the positive sister of paranoia. Only curious analysts are able to question the status quo of certain process or wisdoms. Additionally Curiosity drives people to listen to their environment, their colleagues, their clients, or external opinion leaders to extract anything valuable. It encourages the relentless search for a real insight in a ever growing sea of data.
• Craftsmanship: Every marketing analyst needs to know something exceptionally well. It can be a software program; it can be the capability of telling insightful stories, it can be the art of visually representing relevant information. It just has to be something that the analyst can leverage positively in his field (e.g. being a great cook doesn’t help). Too many analysts are average in too many fields, instead of being outstanding in one particular well defined area.

These three qualities don’t mean that every marketing analyst has the same traits. It rather creates a huge variety of different marketing analysts. I have seen primarily three different flavors of marketing analysts:

• The Strategist: This individual is primarily interested in translating quantitative insights into a comprehensive marketing strategy, including a concrete marketing plan. The Strategist is the happiest when he can see the impact of his data driven marketing strategy in individual marketing executions.
• The Statistician: This individual is primarily interested in finding correlations between different data sets. The Statistician is most happy when he has found an insight that either answers a concrete question or inspires new ones.
• The Techie: This individual is primarily interested in automating and scaling marketing analytical tasks and executions. The Techie is most happy when he sees the ease and time savings of implemented hard-and software solutions, hopefully at a very affordable price point.

As said in the beginning, marketing analysts come in different forms and shapes. This richness of personalities, character traits, and expertise areas make our field so interesting and innovative.

Contextual Analytics

Too often our analytical work is done without knowing the necessary context of what our results are used for. I like to call it the Perpetual Circular Analysis (PCA). No one knows what the analysis is suppose to do. So, if one has produced and shared the data driven results, then there will be more questions and doubts, so one just restarts the analysis with slighlty different approach. This can go on forever until a senior executive is so fed up that she or he just ignores all the analytical work and makes a hasty and ungrounded decision. Then the circle is closed and can start again with a new questions. Doesn't this happen so often in our professional work?

But one ignored factor of our analytical work is that we create our own context through the applied methodology and our communicated results. We are shifting and changing the context of where the team was prior to the analytical work, prior to any data related insights. And this is a good thing. I suggest focusing more on this creation of a changed context than fixing every single PCA challenge. But we have to be more deliberate and conscious of how we change the team's context and for which purpose.

Borrowing and expanding a thought from Adrian Holovaty (founder of http://www.chicagocrime.org/) analytical work should achieve three contextual elements:
- Creating a context in which other people can think
- Creating a context in which other people can sharehttp://www.chicagocrime.org/
- Creating a context in which other people can create
This often neglected purpose of analytics is well demonstrated by the above mentioned project of analyzing and sharing crime data in Chicago or by the “We feel fine” project which collects, analyzes, and visualizes Online mentioning of “Feelings” (http://www.wefeelfine.org/ ). These analytics create contexts that enable thinking, sharing, and creating.

Therefore the best analytical work creates a new context along the Open Source philosophy of making Data and Methodology available, enabling understanding through transparency, and encouraging derivative and correlated work. Maybe this approach will help us to experience less analytical work along the Perpetual Circular Analysis pattern but more stimulating and interesting team discussions, inspired and driven by Analytics.

Search is more

I just came around to read the book “The Search” by John Battelle, published in 2005. In addition to being an excellent write up of the history of search and its impact on marketing, the book helped me to understand that Search is more than the Online behavior of consumers who are looking for something. Search is about connecting consumer intentions with the most relevant information, offer, product, etc. that is as closely related to their intention as possible. And this search behavior happens in any kind of world, not just in the Online space. It is nothing else than an intention (= need) that needs to be fulfilled. Therefore Search should be at the core of any marketing activity that attempts to influence consumer decisions.

Let me explore the Search universe in more detail. Marketing does three things:

• Create an intention or need (=create a search)
• Connect an intention with the most relevant answer (=satisfy a search)
• Utilize an intention to build a long-term relationship (=build onto a search).

In summary, these three core elements of our marketing discipline can be viewed through the Search paradigm. In essence, marketing attempts to be the best Search discipline that exists. Additionally, so many consumers are getting used to Online Search, they are beginning to transfer these Search patterns to other Offline marketing activities.

• They want to “search” through their TV channels instead of surfing through all the channels to find the most interesting program (Surfing is out).
• They want to “search” their retail store for the exactly the right product that they have in mind instead of getting lost in the confusing world of store lay-outs (Finding is in)
• They want to “search” the tune that they just listened to on the radio without having to log onto a laptop to identify the correct name of singer and song (Identifying is in).

I am not postulating that every singly consumer behavior will be search centric, but it will be one of the most dominating patterns, next to the other three dominating behavioral patterns of the 21st century consumer: 1. Browsing and Discovering, 2. Consuming and Experiencing, 3. Creating and Participating. Maybe in the future we have to build our marketing discipline around these four fundamental classes of consumer behavior instead of functional expertise areas.