Marketing is Dead
Yesterday, I wrote my commentary on a recent HBR post proclaiming Marketing IS Dead with some well-reasoned evidence that MARKETING IS NOT DEAD. You might want to check out those comments, here, but please don’t waste your time reading the HBR post — it’s utter nonsense.
What support did the author offer for this thesis that Marketing IS Dead? That a recent study showed CEO’s are tired of spending money and not knowing what they’re getting in return. Are you kidding me? It sounds like these companies need to find NEW CEO’s because these ones are living in the Dark Ages. Of course, the author goes on to say that marketing is dead because firms spend their marketing budget on traditional media rather than new media — primarily social media.
Excuse me, but if marketing is dead, why is new media better than traditional media? And, what do we replace marketing with, if marketing is dead?
Two problems, at least, come from the notion that marketing is dead. First, marketing is much more than advertising. Second, you can measure ROI, if you know what you’re doing. Let’s take these problems in order.
Marketing is much more than advertising
There’s this mistaken idea that marketing is just advertising and sales. In fact, advertising and sales are but a single element of marketing and there are 3 others — product, pricing, and place (distribution). It also ignores the fact that marketing is a strategic discipline requiring long-term planning to effectively sell a firm’s products.
Marketing focuses on understanding the consumer, how they think, how they process information, what problems they face, how they make decisions. Without this information, the firm is flying blind and won’t optimize their sales. I’ve sat in on many high level meetings where brand managers or marketing execs put together a strategy without the first idea of who their consumers were, what they wanted, or how they thought. They want to jump right in to an advertising campaign with this celebrity endorser, this tagline, this media spend. Ridiculous.
Marketing has a major role to play regarding products. Everything from conceptualization of new products to solve consumer problems, to design elements, to managing existing products falls within the marketing concept. Inherent in this concept is the role of marketing in ensuring consumer satisfaction with your products (and services). Building a brand image that resonates with consumers is part of marketing. Target marketing, segmentation, and product positioning are also part of marketing.
While finance, operations, and accounting all have valid input into prices, marketing’s role is in ensuring customer value — that the benefit consumers receive is greater than the costs they pay. Marketing also focuses on psychological pricing, such as bundling, psychological reactance, and yield management. The issue of Customer Lifetime Value is also a marketing function.
Here marketing overlaps logistics in terms of ensuring the right product is sold at the right place for the right price at the right time. Stock-outs, for instance, have a major impact on future sales and marketing focuses on ensuring adequate supply to avoid them. Where a product is sold impacts its price, amount sold, and the image of the brand.
Within place we also talk about atmospherics and customer service in retail outlets, which overlaps Human Resource Management.
It’s nonsense to say you can’t measure ROI in marketing. Sure, it’s a little harder and a little less direct than assessing the ROI of your stock portfolio or your product sales, but it’s possible if you collect the right data. By right data, I mean data that translates into sales. Collecting information on “Likes” is useless, because Likes don’t translate into sales. On the other hand, engagement DOES translate into sales because engagement amplifies your message. The more people know about your brand, the more likely they are to buy it, especially when their social network endorses the brand. Sentiment also translates into sales because satisfied customers are more likely to buy than dissatisfied customers.
Part of what makes calculations of ROI in marketing difficult is that the information isn’t all INTERNAL, like it is for other ROI assessments within the firm. To calculate ROI in marketing, you also have to track things like engagement, sentiment, and other external data related to consumers. And, these numbers are a little squishy because you’re working with human emotions not instrument readings that don’t vary with mood. Just because the numbers are squishy doesn’t make them any less REAL.
So, what do you think? Do you believe marketing is dead? Want to know more about marketing and social media? Subscribe to my email newsletter for updates on cutting-edge tools to make your marketing SIZZLE.