New media is defining a new era of business. The forces of creative destruction are carving out the corporation of the adjacent future. Here’s an example.
Procter & Gamble – reaping the benefits of creative destruction
Procter & Gamble (P&G) CEO Robert McDonald said, “historically, the 9% to 11% range [for advertising as a percentage of sales] has been what we have spent… In the digital space, with things like Facebook and Google and others, we find that the return on investment of the advertising, when properly designed, when the big idea is there, can be much more efficient. One example is our Old Spice campaign, where we had 1.8 billion free impressions”.
The CEO’s comment above was background to Procter & Gamble’s announcement that 1600 marketing employees had been made redundant.
From an outsider’s perspective, it appears the marketing efficiencies that made 1.8 billion ‘free’ impressions possible is P&G’s long standing investment to social media and digital.
Get busy being creative or get busy being destroyed
At iStrategy Sydney 2012, Director APAC Marketing at Adobe Systems, Mark Phibbs explained that 74% of their marketing budget is spent on digital.
When Mark asked for a show of hands of others investing a similar percentage of their budgets on digital, few raised hands could be seen.
So what is the average percentage of budget dedicated to digital in Australia?
eConsultancy’s State of Digital in Australia 2012 reports that client-side respondents on average spent 31% of their overall marketing budgets on digital. The report states that only 6% of client-side respondents indicated digital makes up 91% – 100% of their marketing budgets.
With almost 11 million unique Australian visitors accessing Facebook and YouTube per month, I suspect more, than fewer of Australia’s corporations are missing an opportunity to innovate how they engage customers and consumers.
The lack of greater investment in digital (particularly new media) is currently an opportunity missed.
Whether a declining Australian economy or corporations find themselves falling behind competitors advances the pace of new media driven innovations remains to be seen.
Applying a creative destruction make-over to your career
While, we the employee, cannot control external market forces, we can control our careers.
If you work in a corporation and are mapping out how to define your place in the corporation of the adjacent future, Forrester Research has identified the following emerging disciplines to focus on.
Disciplines include:
- Analytical pattern recognition – spot data patterns that point to hypotheses to be tested.
- A/B testing – a marketing program is never optimized but is a continuous iteration of small improvements.
- Customer life-cycle metrics – being aware of each customer segment’s customer journey across the life cycle and the ability to define customer-focused metrics.
- Social buzz monitoring and influencing – Actively engaged in social media to understand its dynamics be familiar with social monitoring tools.
- Thought Leadership – Develop big ideas (e.g. P&G CEO’s comments) that will address a key business challenge.
- Neuro-marketing – Being familiar with the emerging new research methodologies that quantify emotional and subconscious responses to brand interactions.
- Platform prioritization strategy – adopting simple framework’s like Forrester’s POST method (People, Objectives, Strategy and Technology) to decide what platforms to engage on.
(Source: New Skills Define Adaptive Marketing Success, Forrester Research, Inc., October 11, 2011.)
Is your business ready for the forces of creative destruction? Are you ready for the forces of creative destruction?
Great blog Mike. I am familiar with some of this. Much more for me to learn.
I wanted to share a great comment from Mahei Foliaki that he posted on my G+ stream:
A couple things stand out from what you’ve shared. Several questions I would ask is, out of those people in the iStrat audience, how many of them know exactly how many people within their target market(s) can be connected with online? if they could spend up to 74% of their budget on digital, would they know and/or have the expertise/experience to extract massive value out of that spend?
Contingent on how people look at the Old Spice campaign, the bottom line is, did P&G make money? I actually thought the campaign was well-short of what it could have been. From a marketing perspective, superb concept however ‘traditionally’ thought-out in my view. Where the needle moves in this social space is at the seams of every vertical and at it’s heart. Creative destruction is part of the equation, ‘business permaculture’ is the fertile soil. No idea truly ever dies, it’s just combined better like in music to create more harmonious or disharmonious chords.
Agree, the marketing dept of 2017 will be totally different to 2012. Forrester mentioned the yin-side in their discipline list. This is the yang. Speaking more than one language will be an invaluable asset to many organisations. Diversity in the marketing department in gender makeup, culture and life history will spring forth innovative ideas. Social and collaborative skills will be vital.