360i News: Outside Voices: Marketers Need To Modernize, Not Just Switch Their Agencies

August 24, 2015

As reported by The Wall Street Journal here:

The prevailing wisdom is that the desire to cut agency fees or concerns about rebates are driving the tidal wave of marketers searching for new advertising and media agencies in 2015. While cost reduction is certainly an objective, I believe growth, or the lack thereof, is more often the root cause as marketers look for innovation to help them break through and accelerate revenue.

Dramatic changes in consumer behavior – led by an increasingly influential population of Millennials – pose a threat to many businesses as they struggle to connect with people in ways that are meaningful, motivational and monetizable.  At the same time, we are on the cusp of digital media spending outpacing any other form of advertising for the first time, a pivotal moment in the ongoing and meteoric rise of the digital era.

Here is the bad news. While a new agency may help move the innovation ball forward in the short-term, substantive and sustainable change must also come from within a marketer’s own halls, by fundamentally rethinking the way they budget, organize and measure success in this new era.  Simply put, the marketing infrastructure at most corporations has not kept pace with the change in media consumption habits and is pacing woefully behind shifts in technology and media habits.

Marketers know they need to change—they just don’t necessarily know how. A study by the Association of National Advertisers and McKinsey found that while 81% of marketers believe there’s a need for formal content and distribution processes to navigate marketplace disruption, 84% have no such process. To quote the study, “systems, processes, budgets and metrics are still designed largely around mass campaigns and promotions, the decidedly old-school methods of broadcasting to customers.”

And when they do choose a strategy, it’s often not the right one. A 2014 Forrester survey of global executives reported that almost three quarters of marketers had a digital strategy, but less than a third of them thought it was the right one.

As we look into planning 2016, here are three effective ways to modernize your organization:


It’s time to retire the age-old process of building marketing budgets by tweaking last year’s plan up or down a few points. Start with clear objectives, an aggregate affordable investment number and a blank sheet of paper. Challenge your team to create channel-agnostic budget allocations that give you the best chance of hitting goals while challenging assumptions of causation that rely on historical models of customer behavior. Be careful that this process is used for optimizing marketing investment allocation rather than as merely a cost-cutting exercise, which has happened at more than a few corporations.

Another destructive relic that impacts budget allocations is the working vs. non-working media ratio. “Working” represents paid media and “non-working” includes everything else needed to make the advertising like research, content development and agency fees.  Marketers are often being publicly measured by their finance organizations on how they can maximize the percentage of working media out of the total marketing budget. This ratio made sense in the TV era when the only way to reach consumers was through paid, interruptive advertising, but in a world where earned media  (i.e. social media, influencer marketing  and PR) has enormous impact, this outdated ratio of working to non-working dollars is no longer helping marketers succeed. The quality of your insights, ideas and content is a huge factor in whether your message will resonate and gain effective reach and all of these things are technically “non-working” dollars.


Hold a mirror up to your organization, inclusive of external partners, and ask yourself whether you’re structured for success. There’s no single right way to organize but there are questions that can help determine the best approach.  Do you have the expertise you need to plan and execute superbly?  Are teams or incentive structures aligned toward outcomes, rather than budget allocations that encourage fiefdoms based on specialty areas? Can you afford to attract and retain specialized talent to your organization, or is it more effective to use partners?

Success Metrics:

The success metrics you establish drive behavior—for better or worse. Measurement is important, but it mustn’t become the enemy of progress. For instance, many companies use marketing mix models to determine the optimal blend of marketing dollar allocations. These models use historical relationships to determine cause and effect, which presents two huge issues in 2015. First, earned media is generally excluded from the model, creating a bias towards paid media and leading marketers to underinvest in areas that drive word of mouth “free” impressions.  Second, these models often infer causal relationships between watching commercials and making purchase decisions using behavioral data, which often doesn’t apply in today’s media environment. Consider the difficulty in using your behavior in a pre-iPhone era to predict how you act today.

The world has changed, the economy has become digital and marketers must adapt.  Now is the time not only to align with the right agency partners, but to also look inward and ensure their own processes, teams and success metrics set them up to succeed in a new era.

Bryan Wiener is chairman of 360i, a digital marketing agency.