Tuesday 25 April 2017

AdLib: Marketers hitting the glass ceiling

Louise Clarke, from Walkinstown in Dublin, at the Tayto pop-up shop in Arnotts department store, as it opens in the run-up to the festive season
Louise Clarke, from Walkinstown in Dublin, at the Tayto pop-up shop in Arnotts department store, as it opens in the run-up to the festive season
Alan Cox, ceo, Core Media; Patrick Coveney, Greencore chief executive; and Aidan Greene, deputy ceo, Core Media; pictured as Coveney joins the Irish communications group as non-executive chairman
Behaviour & Attitudes director Neil Douglas

Michael Cullen

How come marketing is not taken more seriously in boardrooms? It's a recurring question posed largely by adlanders but also mooted occasionally by advertisers frustrated at the way marketing isn't ranked highly enough.

Greencore ceo Patrick Coveney has an interesting take on the issue - which coming from someone whose job extends well beyond marketing carries some weight.

Coveney - who was recently hired by Alan Cox as non-executive chairman of Core Media - says the wider business community often equates advertising with scenes from 'Mad Men', prancing around in sharp suits and living glamorous lifestyles.

The reality is another world. But the 'Mad Men' misconceptions can be responsible for how marketing - and advertising in particular - are greatly misunderstood.

The lack of real belief in many boardrooms about the critical role of marketing to drive business growth is puzzling, Coveney insists.

He says it may have been excusable years ago, when measurement techniques were more intuitive and less reliable, but not today.

Since joining Core, the Corkman has been impressed by how marketing and advertising effectiveness can be proven through econometric modelling.

The work is done by a new breed of communicators, data scientists who are a world apart from the caricatures in 'Mad Men'.

A Deloitte study in 2013 found that €1 spent on advertising generates €5.70 for the Irish economy. Ads contribute €5.3bn to GNP, achieved through increased demand, innovation and competition.

A 2012 study by Coveney's alma mater, McKinsey, found advertising fuelled 15pc of GDP growth for G20 economies between 2002 and 2010, while accounting for just 2pc of economic spend. Core's data team found that €1 spent on advertising delivers a gross sales return of €8.26 and a net return on investment of €5.44 for brands.

Such stats speak for themselves but, Coveney adds, it shouldn't be left to cold analytics to justify marketing's worth.

Take Heineken's Orchard Thieves cider, which won the grand prix at the IAPI's Adfx awards. Here's a brand that broke into a market dominated by Bulmers and earned a 11pc share after only 15 months.

Orchard Thieves' research and marketing prompted its Dutch owner to roll it out in the Netherlands and South Africa using Irish-produced campaigns.

So why the dearth of marketers on boards? An article in Forbes brought the issue into focus. In a study of S&P 1,500 US boards, a mere 2.6pc of the 65,000 board members were marketers. In the UK, only 21pc of FTSE 100 ceos had a marketing background last year. Coveney has no reason to believe the situation is any better in Ireland. The US study found that boards with marketers were more successful, delivering a three point increase in shareholder return over a board with no marketers.

The absence of marketers from boards goes a long way to explain why marketing budgets are thought of as an expense rather than an investment. Boards tend to comprise people with financial or engineering backgrounds, who may not be as adept in understanding the cornucopia of consumer issues as an accomplished marketer.

Boards often explain shortcomings by saying that marketing is a tactical rather than a strategic pursuit and has less of a place around the table. Coveney says such an argument is ridiculous. Of course, the challenge cuts both ways - marketers need to 'up their game' and make their input, agenda and style more relevant to boards.

What's needed is to shape senior management teams and corporate boards with complementary skills; to embrace wide-ranging thought and balance creativity, analytics and performance.

Advances in data science will see marketers being able to predict outcomes for brands based on thousands of case histories and endless rows of data. With such a digital set-up, when brand identity is vulnerable and loyalty can't be taken for granted, the value of marketing and its place at the centre of businesses can't be ignored, Coveney claims.

* Change is a constant and brands which aren't set up to adapt will lose. That's the message running through a talk by Behaviour & Attitudes director Neil Douglas at the next Association of Advertisers in Ireland (AAI) Toolkit breakfast. Joining Douglas will be Joe Ballantyne, head of strategic foresight at The Future Company, who will speak on developing a business in a slow growth world. The event is in Core Media's offices at 8.15am on Tuesday, November 22.

* The doors to the Tayto Crispmas Workshop are open in the Arnotts Christmas window on Henry Street and in the department store's festive market on the lower basement. Tayto Crispmas sandwiches, merchandise, a personalised gift service and family passes to Tayto Park will be on offer until early January.

Michael Cullen is editor of Marketing.ie; cullen@marketing.ie

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