New media is defining a new era of business. The forces of creative destruction are carving out the corporation of the adjacent future. Here’s an example.
Procter & Gamble – reaping the benefits of creative destruction
Procter & Gamble (P&G) CEO Robert McDonald said, “historically, the 9% to 11% range [for advertising as a percentage of sales] has been what we have spent… In the digital space, with things like Facebook and Google and others, we find that the return on investment of the advertising, when properly designed, when the big idea is there, can be much more efficient. One example is our Old Spice campaign, where we had 1.8 billion free impressions”.
The CEO’s comment above was background to Procter & Gamble’s announcement that 1600 marketing employees had been made redundant.
From an outsider’s perspective, it appears the marketing efficiencies that made 1.8 billion ‘free’ impressions possible is P&G’s long standing investment to social media and digital.
Get busy being creative or get busy being destroyed
At iStrategy Sydney 2012, Director APAC Marketing at Adobe Systems, Mark Phibbs explained that 74% of their marketing budget is spent on digital.
When Mark asked for a show of hands of others investing a similar percentage of their budgets on digital, few raised hands could be seen.
So what is the average percentage of budget dedicated to digital in Australia?
eConsultancy’s State of Digital in Australia 2012 reports that client-side respondents on average spent 31% of their overall marketing budgets on digital. The report states that only 6% of client-side respondents indicated digital makes up 91% – 100% of their marketing budgets.
With almost 11 million unique Australian visitors accessing Facebook and YouTube per month, I suspect more, than fewer of Australia’s corporations are missing an opportunity to innovate how they engage customers and consumers.
The lack of greater investment in digital (particularly new media) is currently an opportunity missed.
Whether a declining Australian economy or corporations find themselves falling behind competitors advances the pace of new media driven innovations remains to be seen.
Applying a creative destruction make-over to your career
While, we the employee, cannot control external market forces, we can control our careers.
If you work in a corporation and are mapping out how to define your place in the corporation of the adjacent future, Forrester Research has identified the following emerging disciplines to focus on.
- Analytical pattern recognition – spot data patterns that point to hypotheses to be tested.
- A/B testing – a marketing program is never optimized but is a continuous iteration of small improvements.
- Customer life-cycle metrics – being aware of each customer segment’s customer journey across the life cycle and the ability to define customer-focused metrics.
- Social buzz monitoring and influencing – Actively engaged in social media to understand its dynamics be familiar with social monitoring tools.
- Thought Leadership – Develop big ideas (e.g. P&G CEO’s comments) that will address a key business challenge.
- Neuro-marketing – Being familiar with the emerging new research methodologies that quantify emotional and subconscious responses to brand interactions.
- Platform prioritization strategy – adopting simple framework’s like Forrester’s POST method (People, Objectives, Strategy and Technology) to decide what platforms to engage on.
(Source: New Skills Define Adaptive Marketing Success, Forrester Research, Inc., October 11, 2011.)
Is your business ready for the forces of creative destruction? Are you ready for the forces of creative destruction?