#ARFAM8 : Marketing ROI – The $200bn Opportunity
By David Brudenell
In a heavily-attended presentation, Jonathan Gordon from McKinsey & Company offered to give his reflections on where marketing is and the continual search for it’s ROI.
Making the light hearted comparison that every person on the planet could be gifted a iPod Nano for the $1 Trillion spent on Marketing, Gordon focused on the actionable marketing spend targeted to consumers of approx.. .200bn.
“72% of CEOs say marketers are always asking for more money, but can rarely explain how much incremental business this money will generate.”
Was a burning quote that Gordon used to frame up McKinsely’s five-step approach to tackling Marketing ROI:
1. Challenge top down allocation – many of the challenges with the marketing spend start with the budgeting process. Because there is a lot of inertia in the budgeting process, thinking is not strategic, but rather just ‘a twist on last year’s budget.”
2. Start with the Consumer – marketing is focused on meeting the consumers needs. Gordon juxtaposed the old marketing funnel with the new “non-linear consumer journey”
3. Kick our Analytical Pad – recognize that Marketing and analytics require some judgment; not everything is perfect.
4. Buy the same marketing for less – one has to streamline internal processes to get quick in procurement savings.
5. Tackle cultural barriers in the marketing organization – Gordon proposes to “think transformation” and goes on to say that one of the critical issues in marketing transformation are cultural issues. The worlds of analysts and marketers have changed dramatically. Both are dealing with higher levels of complexity and internal and external competitiveness.
Gordon went on to paint a picture where we were entering the ‘Golden Age of Marketing”