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Marketing Procurement, Let’s Collaborate

This a re-post of a piece I was asked to write by Steve Ashcroft, a prominent procurement expert.

He asked me to develop an idea I had that marketing agencies and procurement professionals face similar challenges in proving our value at executive level and that instead of sharing our thoughts on how to overcome this, we are wary of each other.

This doesn’t seem to me like a smart way to solve a problem.

Here’s the piece…..

“I’ll be honest. I was pleased to read that PepsiCo has shut down its marketing procurement function and is giving the responsibility to its brand management teams.

Not ‘ding, dong the witch is dead’ rejoicing but I think it’s right that these decisions are owned by those accountable for the effectiveness of campaigns.

I also firmly believe that yes, marketing is a special case for the 10 reasons explored in Gerry Preece’s short book ‘Buying for Less – how to avoid the marketing procurement dilemma’, which can be summarised as:

‘Marketing is an investment not a cost and there are too many variables within the vendor set and unmeasurables in outcomes to make marketing procurement any more a precise, predictable activity than marketing itself.’

That’s not an argument to say don’t do it or that marketing deserves a free ride.

It’s an argument to recognise the limits of the possible and in the absence of precise, fair methods of evaluating the effectiveness of an activity, filling that void with a focus on cost alone is unwise and counter-productive, not just for both parties in the negotiation, but for the credibility of Procurement itself.

I want to offer a way forward which both protects the value at risk in a developing a marketing strategy and also does something for the status of the people around the table too.

The origins of this piece was Steve’s own observations recently that procurement is struggling to make a credible impression in the C-suite.

This, for me at least, was a striking thing to read for two reasons.

Firstly that this is something I read almost every week in the marketing press – why are there so few marketing directors on executive boards etc.? So it struck a chord. The second reason was that I’d kind of assumed that Procurement didn’t have any worries in this department.

Marketers generally think of Procurement as the shock troops of the FD’s team with a direct line in to the boardroom.

So it’s good to know that existential angst is not the marketer’s sole preserve…we’re not alone in the universe.

Let’s then ask why we have this failure in common, the answer to which is encapsulated in Preece’s book.

Measuring marketing effectiveness is really bloody hard and I can understand that trying to pick your way through a blizzard of vendors with highly variable, subjective qualities must be extremely challenging or even impossible for Procurement professionals.

In my own field of expertise, public relations, an argument has raged for as long as I’ve been in the industry (about 30 years).

How do you measure PR?

For years the industry fiddled about with a measure called AVE or advertising value equivalent. It’s the idea that the efforts of the PR team would produce a piece of media coverage that can be measured with a ruler (stop laughing) and then compared to how much it would have cost to buy that space as an advertisement.

Where to start on the idiocy of that idea….it’s like a restaurant critic evaluating a meal by the number of calories per £ they ate.

It’s still in use today despite the efforts of the PR industry to banish it as absurd and outdated.

The reason it hangs around like a bad smell is that nobody has come up with a simple, universal measure. The alternative (to map outcomes of work to precise and unbending campaign objectives) is demanding, expensive and requires a level of sophistication that is not found in the day to day management of most marketing campaigns which are exposed to changes of direction by the day if not the hour and objectives become a highly malleable concept.

Instead of doing the thing that is useful but hard, people fall back on the useless but easy and the hardest part of marketing is setting the objectives and the strategy.

I still read briefs from experienced marketing people working in big, well organised companies that say things like ‘make people visit our website’.

When was the last time anyone made you visit a website?

This sort of idiotic instruction set or spec is both Marketing’s problem and Procurement’s and will remain the principal barrier to the C-suite.

When you have a common problem, you need a common solution, which is for vendors to sit down with Procurement people and try to agree ways of evaluating marketing outcomes that both parties can support.

That is idealistic and a more practical objective would be to agree ways of describing desired marketing outcomes, in other words, work on the language of the instruction or specification to drive out uncertainty and make it easier to link objectives to outcomes.

Phrases like ‘raise brand awareness’ or ‘think outside the box’ are uselessly vague or subjective and I would recommend David Owens book ‘Creative People Must be Stopped’ for a clear solution of how to cut this challenge down to size.

He explains why and how imprecise language constrains innovation and the evaluation of risk in areas of activity like marketing because it fails to capture the constraints on innovation and more importantly he shows how to solve the problem.

So….

We know what the problem is.

We have common cause in solving it.

We have the tools to address the problem.

Who will help me take this forward? I am genuinely interested to hear from Procurement professionals who would like to discuss this further.

Nigel Sarbutts, from www.brandalert.co.uk helps companies get more out of their marketing investment by challenging boards to define and communicate their objectives more clearly and marketing teams to improve the quality of their response.

In Praise of Volkswagen – a PR Masterclass

In PR terms, Volkswagen might be giving us a masterclass in crisis response strategy.

The statement by Michael Horn the CEO of Volkswagen USA is in my opinion as good as it gets:

“Our company was dishonest. We have totally screwed up. We must fix the cars to prevent this from ever happening again and we have to make this right. This kind of behaviour is totally inconsistent with our qualities. We are committed to do what must be done and to begin to restore your trust. We will pay what we have to pay.”

From a technical point of view it is very clever because it uses short sentences that cannot be misinterpreted and each one deals with a separate dimension of the scandal – ethical and technical and it deals with actions and financial commitments. Anyone reporting it is almost obliged to quote it in full and in so doing VW gets its message across unfiltered. That, of itself, is solid gold in a crisis.

It’s the strategic aspect that I find admirable.

It is obviously the opposite of the mealy mouthed pseudo apology that has felt the dead hand of a lawyer and that is why it is brilliant from two strategic points of view.

Firstly, it makes it very hard for this story to get any worse for VW so it gives them, as far as they can possibly hope at this point, a solid foundation, not shifting sands. The only way is up.

Secondly and this is where I think they might be being very clever indeed it sets the standard for other auto manufacturers who might be about to find themselves in the same position.

Any other auto brand that is engulfed by this scandal which does not make a similarly comprehensive and unambiguous mea culpa with its commitment to swift financial action, is going to find themself the attention of the media as story unfolds and expands to become one of not only wrongdoing, but corporate cowardice.

It seems unlikely that anyone is going to beat VW for directness and an apparent willingness to deal with this problem and confront their own shortcomings and that gives them a strong hand when the immediate sense of scandal has cleared.

The world isn’t going to stop buying cars, even diesels, and if most if not all brands in the category are swept up in this scandal, then the one that makes the most authentic and fully resourced commitment to solving the problems of its failures will be the one that comes out of it first and can begin re-building its most valuable asset. That means the one best able to capture market share from its category rivals.

It’s a big bet, but there is no halfway house here.

Bravo Volkswagen

Barcelona Principles – Problems and Solutions

On the evidence I have seen, few people care much about the Barcelona Principles. I’ll offer a solution here, but my evidence for making this claim is my experience judging a large PR awards scheme in the last two years.

On each occasion I have spent a day or so carefully reading about 30 or more award entries. The first year it was large consumer campaign category and this year it was large B2B category.

The companies entering were amongst the most high profile consultancies in the UK and the clients were mostly substantial, professionally run businesses.

I can’t recall a single entry where the Barcelona Principles had clearly been applied and there were plenty where the results were presented in terms of “media impacts” or some other close cousin of AVE.

After some years in existence you might imagine this wouldn’t be the case (especially when an awards entry is, by definition, when you present yourself at your most capable and professional).

I sense that the Barcelona Principles exist in a bit of a bubble of larger consultancies and companies which sell PR measurement tools.

Granted, as an independent consultant who does mostly communications strategy work rather than execution, I don’t see as many PR briefs as I used to when running consultancies, but I’m pretty sure I’ve never seen the Principles mentioned in a brief.

This hunch was backed up by comments made to me after I posted a tweet during the launch event suggesting that if after five years these principles still had to bang the drum about the inadequacy of AVE, that it was legitimate to ask about the effectiveness of the campaign to promote the principles.

I asked David Gallagher from Ketchum (one of the prime movers behind the Principles) via LinkedIn if the Principles were actually applied to the campaign to promote them. If I interpret his answer correctly (that this was discussed), they aren’t.

So if I’m right that five years after launch the Principles don’t really resonate with buyers of PR services and are something that only vendors really talk about, how will they ever catch fire?

Something has to change.

The problem is that whilst it’s very important that measurement is improved, the work underpinning the Principles seems to be looking at the wrong end of the pipeline. You can have the best set of standards in the world, the best measurement tools etc. but if what you are measuring is incoherent or ill-defined, then what’s the value?

More precise, reliable and valuable measurable outcomes come from more precise and reliable instructions at the start of the process and that is where I’d suggest AMEC and its industry partners focus their efforts in order to achieve more widespread adoption and get out of the bubble.

Measurement is hard because the inputs to the process are hard to define. If the brief is vague and susceptible to change, so are the outcomes and how do you measure that?

A better magnifying glass won’t help you, but better terms of reference in briefs will and that is an education task for all  stakeholders of the industry (not just the seemingly small number that devotes time and attention to the Principles) – vendors of all sizes, professional bodies representing both supplier and purchaser and procurement specialists.

All of these stakeholders are united by a vested interest in a better articulation of what business problem needs to be solved and what PR’s role is in accomplishing that goal. That strikes me as a huge opportunity being missed that would be based on collaboration.

The advertising industry is struggling with this issue as the recent study “From Mad Men to Sad Men” makes clear.

There the impact of unclear briefs and weathervane behaviour is costing the industry serious money as client relationships are getting ever shorter. It’s also costing clients serious sums in wasted time and effort chopping and changing agency in pursuit of perfection on the cheap.

It seems reasonable to assume that this behaviour is affecting PR as much as it is advertising and also that it isn’t going to improve any time soon unless the relationship between client and agency/consultancy is framed in terms of the benefits and value created by a closer working relationship, rather than trying to achieve better results by one party in the relationship feeling the account is forever at risk.

Linking this back to the Barcelona Principles, I’d suggest that five years on, the argument for measurement needs to be urgently reframed in terms of asking not “how do we improve measurement standards to make them relevant” but “how do we help the industry to define outcomes that can be measured”.

That is hard to do, but the alternative as the ad industry knows to its cost, is much worse.

The Brain’s Problem With PR and Marketing Measurement

PR Measurement

Image Ruralsprawl, ?Brain? March 17, 2008 via Flickr, Creative Commons Attribution.

This is for everyone who has been challenged to demonstrate a return on investment from PR or marketing.

Take heart.

If, intuitively, you find that a little dispiriting then it’s OK, not only is psychology on your side, neuroscience and biology are too.

A long time ago, I was in the final stages of trying to secure a contract from a prospect client. Everything had gone well, the chemistry, the pitch, the follow-up. Then the decision maker called up and said he wanted to meet to iron out some details in order to make the final decision and could we meet that evening in a nearby pub. No problem I said.

The reason for mentioning it took place a long time ago is that this was before mobiles were commonplace and neither of us had one.

The meeting was fine and we got on so well that the time slipped away and the client suddenly realised and said “I have to go call my wife to tell her I’ll be late, but before I do, the real question I need answering before I can appoint you is this…. How will I know if it’s working, if I’m getting value for money? Think about it and I’ll be back in two minutes.”

With that he went to find the payphone.

It’s the question you dread because it can’t be answered in any hard edged, data rich, evidence based, truly convincing way. How can you evidence future performance, when the future doesn’t send us data?

In the next two minutes I could either win it or lose it.

Everything was to play for. If I could answer the question right then I’d won the business.  If, instead, I offered some waffle or I sounded unsure about our abilities to perform I might undermine all the confidence created in this nascent relationship.

I was still trying to think of how to answer when back comes the client and says “That’s all sorted, my wife understands.”

In a moment of inspiration and without thinking it through I said “How do you know?”

“What do you mean, how do I know what?”

“How do you know that your wife isn’t really pissed off at you about being late and in reality your dinner’s in the dog?”

“I just know, why?”

“Some things you just know and it’s no different with your PR, you just know”

He paused….“OK, you’ve won the business”

The inability of the client to articulate his answer to my question is the critical point here. He was struggling for words to describe his absolute conviction that his reading of the situation was right and everything was right back home.

This was his limbic brain at work. The part of the brain which governs higher value functions like trust and empathy on which fundamental decisions are made but lacks the ability to describe them.

Let that thought sit there for a moment and then start to ponder the consequences for designing a measurement system for what businesses most strive for  – to be trusted, is processed and judged by the part of the brain that cannot adequately say why this trust exists.

Back to the limbic brain for a moment.

Neuroscience tells us that the limbic brain is that part which assesses whether we can trust something, providing us with a powerful even unstoppable emotional response (it’s why you see spectators at events all holding their heads when a player misses). But, crucially, it is a response that has no language or reasoning (which are processed by the cerebral cortex, which deals with rational decisions)

In his bestselling book, “Start With Why” author Simon Sinek powerfully describes that the most inspirational leaders and the most successful brands connect with and stimulate an emotional response  more than a rational response which can be both consistently articulated and codified and this is the heart of the measurement conundrum.

He gives Apple as the perfect example of a brand that plugs straight into our limbic brain, probably better than any other. A Dell, he writes, might have a better specification than a competing Apple product, it will certainly be a lot cheaper and (in my opinion at least) it will have better customer support. But what it won’t do is make the user feel special, feel that he or she has made a smarter decision for reasons that are about them, not the product itself.

Those reasons might be to do with wanting to feel that they are not a corporate drone, that they are creative and individualistic, or rebellious. Whatever is the primary reason it is to do with self-image that is by definition unique to the user and certainly not measurable by any known standard.  (Other than their willingness to pay a premium for an Apple product over another with comparable and rationally measurable performance specifications)

The conundrum is this.

The highest goal of marketing is the unmeasurable – the goodness of fit between what a brand promises and its relevance to an individual; a unique jumble of intangibles like trust, empathy and passion and loyalty.

If it is the case that the better you are at your job, the less measurable your efforts, what is the value of measurement other than at a fairly trivial level?

Measurement has an important role, which is to allow us to compare between options, the click rate for one piece of content or a design over another for example.

But to declare that everything is measurable or parrot that “if you can’t measure it, you can’t manage it” is absolutely missing the point of why your primary objective.

That seems to me to be a complete and quite easily measurable failure of measurement.

PR and its Fetish

Warning this contains the words NAKED, VIRGIN, FETISH and WOBBLY BITS. And BOLLOCKS (twice)

This started life as a reply to a typically thoughtful piece by Stephen Waddington who wrote about PR’s problem with self-confidence as it does battle for share of budget in a new era when the lines between media channels and who pays for that content to be both produced and appear are getting ever more blurred.

He worries that in this turf war between agencies for share of the cake, PR is lacking in its ability to persuade and command attention and authority.

My response to that is yes, absolutely and I think I know why and where the solution lies.

The PR industry has to face up to a dichotomy and decide one way or the other. It craves respectability, gravitas, authority but it values, even fetishises youth over wisdom and is forever obsessed with the new, new thing rather than asking whether it is the right thing.

This obsession is fuelled by a number of fairly entrenched factors such as:

1) A pyramid agency model that needs lots of young, cheapish people doing as much billable work as possible, hopefully at rates beyond their skill level if the client will stand it

2) A career progression norm that says you’ve got to get as high as possible as fast possible

3) A trade media, awards system (and arguably a buyer mentality) that champions novelty over effectiveness – been on Second Life or Jelly lately? How’s that AR based campaign working out?

4) No industry gold standard CPD system

I am happy disclose that I am 50 so be under no illusion that there is some naked self interest at work here.

The narrative that younger people have better, more relevant, more ‘cut through’ ideas and so should be listened to first, fails on three counts:

The “more experienced” amongst us will know that, you really, really don’t forget how you felt in your teens or twenties. You actually think more about that period in your life more than you did at the time. The number and nature of media outlets available then versus now makes precisely sod all difference to how you feel about love, ambition, belonging and all the other big abstract ideas that brands want to channel in order to “engage” (sell us stuff).

Second, whereas I remember how it feels to get the key to your first flat, your first car, take your first holiday with your girlfriend – the kind of life stage vignette so beloved of marketers – someone in their 20s can’t possibly know how it feels to face the big milestones of later life – the sudden freedom of post parenthood, post mortgage, or on the downside, your parents needing care or the reality of your body not being quite the dumping ground for all manner of fun toxins it once was.

This is a foreign country to these people, they are not natives. I on the other hand, have two passports, their land and mine.

Thirdly, my generation has all the cash, we buy cars, holidays, big tellys, clothes to hide our wobbly bits, all sorts of shit to help us sustain youth. We earn more and are not so saddled by debt or rent. Marketers should be all over us but we are spoken to by people fumbling with an unfamiliar language.

Here’s an example.

Yesterday Virgin Money launched the Never Mind the Bollocks credit card.

I have a feeling that some brand manager looked at the data and worked out that the core demographic came of age in the punk era and that this would “engage” with them.

It’s dad-dancing in reverse.

It’s patronising bollocks and anyone who experienced the creativity, excitement and originality of punk – in other words, the core target for this product, is laughing at it.

Great job.

So here’s the thing, if you want better outcomes in your PR or communications programmes work with people who know how to respond with the authentic voice of experience.

With authenticity comes authority and the confidence to challenge in order to get to the right answer and to Stephen’s point, the right share of budget in the turf war.

Mix it with the optimism, energy and willingness to risk that is youth’s priceless value, but assuming that those qualities alone will guarantee success is not borne out by….experience.

There you have it Stephen, the answer to the question you posed. How can PR be more self confident? Be more experienced. You can either wait for it to happen to you or you can buy it now.

Second Life anyone…?