McKinsey & Company gave marketing organizations a nudge in February when it published an article on its site titled: The dawn of marketing’s new golden age.
In context, the management consulting firm says advances in technology are propelling marketing into a new era that is reminiscent of Madison Avenue’s glory days. Mad Men may come to mind for culture, but what McKinsey says heralded that golden age was “a happy marriage of advertising and technology.”
Globally, marketing investments total something approaching $1 trillion which is an astronomical amount of money. As a benchmark, in 1960 US advertising spending totaled $12 billion according to AdAge. In more recent years, marketing has spent some $2 billion on word-of-mouth, $10 billion on PR, $60 billion in TV ads and about $160 billion on direct marketing according to industry studies (while we are counting, we waste 2 billion hours in meetings each year).
McKinsey floats its concept in the construct of paradox. Money is not merely being thrown at marketing, rather it’s a result of the natural tension between top managers and top marketers: Marketing is always asking for more money, but struggles to demonstrate how it will drive growth. CEOs, on the other hand, are always looking for more growth and are reliant on marketing to help achieve it.
Five Factors of a Golden Age
McKinsey suggests that technology – the same catalyst for the golden age of marketing from 1960-1990 – is also the underlying cause today. Technology is broad, so the authors break it down into five dynamics.
1. Science. Science – as in data science – is the section which the article spends the most depth. It points to the ability of a consumer company to collect survey feedback from 10,000 people in a month. That simply wasn’t feasible a decade ago. Unstructured data too is being captured, from the sensors embedded in many products (like your mobile devices?!) to in-store video and eye-tracking tools. More than merely collecting vast amounts of data, it’s the ability to act on that data with the help of technology that capture’s McKinsey’s attention:
“One CEO we know believes it’s time to create a position—marketing technology officer (MTO)—that’s rooted both in technology and domain knowledge. Knowing what can be automated, when judgment is required, and where to seek and place new technical talent are becoming increasingly central to effective marketing leadership.”
2. Substance. “Customer-centricity have raised expectations across the board,” according to the authors, a point which underscores the common theme. It’s putting customer experience (CX) first – that they have a better installation or implementation experience. McKinsey cites Amazon, which for example, pushes inventory to be restocked more quickly to meet expectations. Product managers often face a very challenging question when making a case for new product features: If an investment in a new feature is funded, how much new revenue will the feature drive? This substance, McKinsey says,
“…is making it possible for marketers to identify more effectively the functional benefits that customers need, the experiences they want, and the innovations they will value.”
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3. Simplicity. Whether it’s the 140 character limit on Twitter, or a comment which reads TLDR, simplicity spells success in customer service, and customer service is good marketing. Demand for simplicity has been a stumbling block for marketing – as the channels have grown marketing has struggles to organize efficiently – the result has been “complex hierarchies, silos, communication gaps, and redundancies.” The article cites a telecommunications CEO who noted:
“…a cumbersome organizational structure was getting in the way of delivering the top-notch customer service that the CEO had designated as a strategic priority. He created a unit combining existing call centers and a newly formed social-media customer-care group. The leader of the unit reports directly to him.”
4. Speed. This dynamic conjures up the idea of real-time marketing – that “in a digital economy, marketing is no longer a ‘batch’ process but a continuous one.” Yet McKinsey points out real-time more than the mere pursuit of another Oreo moment, but the speed in which marketing organizations are able to collect, analyze and act on information. The article cites how a hotel might learn guests in a profitable part of the business are shortening the lengths of their stay and offer room upgrades or late check outs to drive “repeat business.”
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The ideas McKinsey proposes – the 5Ss seem a fitting replacement for the 4Ps. I think McKinsey is right in that there has never been a better time to be in marketing.
A hat tip to Joe Pulizzi and Robert Rose for calling out the McKinsey article in the podcast: P&R This Old Marketing #66
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Photo credit: Flickr, Staffan Scherz (CC BY 2.0)
