Time For Marketers To Move To Adaptive Planning?

Marketing planning has changed little in the past century. It's essentially a linear process built on the development of rigid 12-month plans built around brand and channel metrics. This approach is coming increasingly under strain as the combined effects of the growth of digital marketing platforms and a volatile economy demand marketing plans that deliver clear business outcomes and can adapt and improve to meet evolving market dynamics.

Over the past 12-18 months, we have come across several marketing organizations that have decided to do something about this situation and look for new ways to improve their approach to marketing planning by adopting some principles borrowed from a relatively new methodology originally conceived for software development efforts: agile development.

From the interviews that we did with marketers that are experimenting with this new approach, several of the key principles of "agile" development looked particularly relevant to innovating their approach to marketing planning:

  • A clear definition of business outcomes and associated business metrics
  • A dedicated cross-functional team
  • A deliberate test-and-learn approach
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Conquering The Marketing/Technology Divide

The competitive challenge that companies face today is driven by new issues that transcend classic distribution, brand, and product challenges. In the world we live in today, which Forrester defines as the Age of the Customer, firms need to look at how they deliver marketing and technology solutions that have visible impact on the customer.

Just the other day I was reminded of that when, sitting with a client, he described their competitive threat as coming from software products. That would be normal were it a tech company, but this was an airline! Yes, an airline that required technology and marketing to come together to define a customer experience that would differentiate them beyond seat configuration and route system. This highlighted to me the challenge that many companies face in this new era of disruption (for another view of how to think about this product challenge, see my colleague James McQuivey's recent report "Innovating the Adjacent Possible").

Charles Rutstein, Forrester's COO, sat down with my CIO Practice Leader peer Sharyn Leaver and me to discuss the role that CIOs and CMOs play in this customer-obsessed new world. See what we had to say here:

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Netflix Offers Lessons For Digital Disruption In Any Industry

All through the past decade, observers in industry and on Wall Street have offered reasons to discount Netflix’s efforts. Supposed obstacles ranged from Blockbuster to scant streaming options to recent rate hikes on DVD renters. When will these people ever learn? We understand why people cheer against disruptive players like Netflix — it would be nice if we could pretend all these digital disruptions will go away. But they won’t, and neither will Netflix. We’ve written about this in our latest report that people who keep an eye on content strategy will find valuable (see our newest report on Netflix).

But it’s not really written for them – it’s written for people who take an even bigger view, as do we. These people – today’s product strategists – know that Netflix is a powerful example of disruptive digital product strategy and are eager to learn how to act like Netflix in their own context and industry. In our report, we extract three specific lessons from Netflix:

  • Control the product experience. The company that controls the user’s total product experience will win, whether retailer, producer, distributor, or platform. That company will have ultimate control over what options people have, what prices they pay, and what value they believe they are getting. It’s a big responsibility, but it’s one that people charged with product strategy must be willing to accept. Makers of products as wide-ranging as sleeping pills, running shoes, and auto insurance should all follow Netflix’s lead and control the total product experience they deliver.
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TV Upfront Deals Hold Firm As Stock Market Rocks

Last week’s financial market roller coaster is so far not affecting fall TV upfront buys, which are due to convert to orders in late August/early September. MediaPost reports that media agency leaders aren’t seeing any signs of adjustments to the TV upfront buys and expect Q4 to remain strong despite economic uncertainty. Steve Lanzano, president/CEO of the TV station association TVB says, “Back-to-school consumer spending should provide a good barometer for retail spending in the upcoming holiday season . . . But at this time it is not expected that planned advertising spending will be affected."

This attention to the TV market reflects its continued advertising power position. Despite frequent proclamations of TV’s demise, the fall 2011 TV upfronts showed that it remains the go-to media for many advertisers. What is new, though, are signs that nascent TV and digital convergence is now being led by the ad sellers themselves. TV networks like Fox and The CW are following their consumers to multiscreen viewing by offering integrated video ad deals that span on-air and online. What does this mean for marketers? To stay connected with their consumers, marketers must get off of the couch and out of the living room to reach consumers through and beyond linear TV programming. Check out my report “The 2011 TV Advertising Upfronts Preview Convergence Of TV And Digital” to learn more about how these trends will affect brand marketers. 

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Web GRPs Are A Band-Aid Solution For Cross-Platform Ads

In the wake of Nielsen’s and Facebook’s announcement of a new “Web GRP” metric, there has been some exciting debate over whether GRPs will be good for the advertising industry as a whole. Dave Morgan made some excellent points in Mediapost about why GRPs will ultimately be good for online advertisers. However, I respectfully disagree that web GRPs are a step forward for effective cross-platform measurement. 

Although it is true that TV gets the lion’s share of marketers’ budgets, that doesn’t necessarily mean that online measurement should be retrofitted to make “apples to apples” comparisons. On the contrary, marketers are becoming more accustomed to the granular level of metrics and accountability online media offers and will not be content to keep TV GRPs and get a “best fit” measurement of GRPs online. Even if the industry isn’t giving up on GRPs as TV currency, TV networks like CBS are moving away from GRPs as the standard and would like to get beyond age and sex if possible. As the online video market matures and over-the-top video consumption grows, I believe marketers will begin to see the discrepancy in accuracy between the ads they buy on a prime-time show on broadcast and the ads they buy that are delivered via a YouTube, Netflix, or Hulu app on a connected TV. 

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Keep Up With The Pace Of Change By Innovating The Adjacent Possible

We live in a world punctuated by big innovations. From fire and the wheel down to the light bulb and the iPad, we mark the march of history by the steady beat of transformative innovations. Except that steady beat is no longer so steady. The rate at which these life-altering innovations are coming to market is accelerating so quickly that it's no longer sufficient to invoke even Moore's Law to explain them.

Not only are new things being introduced more swiftly than before but consumers are adopting them more rapidly than before. I make my living studying early adopters, but recently I've had to throw many hard-earned lessons out the window. Because in a world where Microsoft sold 8 million Kinect cameras for the Xbox 360 in just two months, traditional definitions of "early adopter" became irrelevant after about week two. 

This is both exciting and maddening. We've spent that last several years watching the acceleration of innovation to figure out what is making this rate of innovation possible and we've discovered that innovating at this pace is tricky, but doable, with the right approach.

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Nielsen And Kantar Pave The Way For Set-top Box Data Adoption By Marketers

Our Researcher Mike Glantz has been tracking the changes in TV media buying for us. Here are some thoughts from him on a new announcement from Nielsen and Kantar:

Although TV controls the lion’s share of the budget for most marketers, it has rarely been the most innovative or accountable medium. However, as TV becomes more fragmented and has to compete with digital, mobile, and over-the-top (OTT) video for viewers’ attention, marketers will need more granular data sets that allow them to track viewers across multiple platforms. In our Q4 2010 report “TV’s Currency Conversion” we made the call that set-top-box (STB) data will emerge as a parallel data currency with Nielsen for TV marketers. STB data allows marketers to accurately measure audiences across the tiniest cable networks, measure second-by-second commercial data, and compare audiences across TV and digital. We argued that STB data adoption would start with local marketers, since local marketers:

·         Are dissatisfied with Nielsen’s antiquated local methodology that does not provide granular insights (Sunflower Nixes Nielsen, Happy With Rentrak).

·         Do not need to wait for national standardization for STB data to make in-market decisions.

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