You may wonder why a career academic is providing a manager’s perspective on the last 20 years. After all, some days I have trouble managing myself! But the great thing about being an academic is that you spend your life exchanging ideas with other faculty, consulting colleagues and hundreds of students and alumni. Thusly, this crowd-sourced review represents a uniquely diverse 360 point of view.
The world for marketing
The ’90s didn’t start out as nervy. Technology was coming to the rescue. While internet spending was less than $10 million, we could all see what was coming. Nortel traded for under $100/share only after it declared stock splits. Rumours abounded about Microsoft secretaries (we had them then) that had stables of exotic race cars bought with stock options. And everyone was looking for the so-called “killer app” to base a fortune around.
Agencies got it. The cottage industry of internet designers were bought or recruited into agencies announcing their new “interactive” divisions. The combination of CRM, data-based marketing and loyalty management (Air Miles, the new Aeroplan, Club Z, even Petro-Canada was into affinity cards) signalled the “revenge of the nerds.” And everyone was talking about data-inspired creative. Truly, as Nuala Beck (remember her?) reminded us, the “new economy” was here.
Of course, that new economy was vulnerable. Governments were in clawback mode after spending to stimulate the old economy (sound familiar?), and the GST was born largely out of the need to reduce deficits. Free trade would fuel an already overheated global focus. The technology sector came to experience the transition of dot-com into dot-corpse.
But as the decade came to a close, it looked like tech would again be the white knight. Everyone was gearing up for that end of world known as Y2K and internet marketing surpassed $100 million. Cell phones moved from being a brick to being truly portable. Blend in the promise of social networking and GPS, and there is no end to the new stuff we can do with mobility commerce.
And that doesn’t even cover other significant events like the emergence of cable/satellite TV and more specialty channels; ethnic marketing and fusion products like curry flavoured potato chips; Dave Nichol and President’s Choice; experience-based hospitality like Second Cup; the environmental movement and Al Gore (even if he didn’t invent the internet); the shift in channel power as the retail trade grew more concentrated; the dual-income family and turnkey kids contrasted with soccer moms and helicopter parents; the death of iconic brands like Eaton’s and Dominion stores and the restructuring of others – Birks, the Bay – and the emergence of new icons such as WestJet, RIM and Four Seasons; and the movement of economic activity from Central Canada to the West and the East.
Opportunities were there for those astute enough to see them. Collapse was experienced by those who could not adjust. And Canadian marketing saw the spending split between brand development and trade/consumer spending move from 80/20 (respectively) to 20/80.
It was, in short, a lot like today.
How did marketing respond to all of this? Clearly there was no shortage of new messiah solutions in the form of new technologies and business models. But however significant the events of the last 20 years, we muddled through. I’m more concerned about the next 20, because the last 20 have led to five fundamental shifts.
The rework of the agency model
While Hugo Powell’s infamous “Fire the Handlers” speech before the Canadian Congress of Advertising in 1993 may be the signature event, agency/client relations changed: the role of creative and media grew and account/strategy declined; global agencies went on a buying spree even as large agencies such as McKim were replaced by small edgy players like Taxi and Rethink, and specialty promotion shops like Maritz and Armstrong Partnership; and new models of client relations – think Grip, or P&G Canada president Tim Penner’s talk on new agency roles – were a tangible signal that clients were not happy and new arrangements would need to be made.
Might makes right
Canada saw the consolidation of companies around two or three dominant players in key sectors like beer, telecommunications and retailing. As the drive to bulk up and grow market capitalization continued, it became harder to distinguish a drug store from a grocery store from a mass merchandiser – and harder for CPG to manage all channel partners in the same way.
Buyer and reseller power now outweighed supplier power, fuelling the reallocation of many marketing budgets. Walmart-style open book pricing and the private and controlled labels of Shoppers Drug Mart and everyone else, were good business practice for sellers – for suppliers, not so good.
Devolving from brand management to marcom
Scale was the new messiah. As traditional giants such as Warner-Lambert and General Foods restructured, the drive for cost containment grew and training budgets and programs ceased to exist. Marketing departments looked more like the stereotypical marcom and control over the three “other Ps” got absorbed by other functional areas. It became harder to recruit good business minds and, when you did get them, it was harder to teach them how to translate great strategy into great execution.
Brands became campaigns instead of underlying business systems. Combined with drive for scale efficiencies, it was only a matter of time before businesses like Kraft and others experimented with a new pan-North American structure and everyone worried Canadian subsidiaries would be little more than trade desks in a world of “Think Global, Act Local.”
The customer IS always right
Combining new technology from UPC-based coupons and RFID to the internet and mobility commerce with “markets of one” fragmentation and the blurring of retail – is it a Loblaws, Walmart or Canadian Tire? – returned the buyer to the captain’s chair.
The push for better segmentation, better data and the realization that true differentiation was lacking led to a greater number and variety of loyalty rebate formats. Remember the Mosaic card you could customize? Point of purchase incentives and contest frenzy abound, spurred by the need to build networks.
The result is non-brand developing costs that eventually will clash with the increased pressure on price, the move to value not price brands, and the loss of focus on real value propositions. Watch as a new battleground forms in logistics management aimed at getting it there cheaper versus better.
It’s all just marketing
The financial pressures on most firms, the focus on EBITDA in a world of income trusts, the relative marketing naïveté of most financial analysts and archaic rules for the tax treatment of marketing expenditures leads to more emphasis on MROI.
This exacerbates the spending allocation issue and accelerates the drive of marketing away from true strategic management to creative and near-term impacting tactical programs.
Look around you. At one time or another, we’ve all been guilty of listening to the voice of the shareholder more than the voice of the customer – a real problem in a world where many choose marketing to avoid “the numbers.”
Jump to:
Nancy Vonk: Five Canadian creative game-changers
Hugh Dow: Beyond transformation – 20 years of media
Frank Palmer: Frank’s big five – The ad biz revolution
Covering 20 years: The strategy cover challenge winner and finalists
