0400 How do CMOs measure the performance of their operations, staff, and partners?

What does this mean for marketers? How does this all work for marketers?

I wrote a book about 8 years ago, just on the tail end of the dot-com fiasco. It was called, “Firebrands: Building Brand Loyalty in the Internet Age.” It received really solid reviews. But it sold worth crap. Okay. That was the dot-com thing.

Ultimately, it resulted in meeting the Chief Marketing Officer for Nokia - a fellow named Anssi Vanjoki. In our first meeting he said to me, “I’d like to share with you why I chose Grey Worldwide as our worldwide ad agency.”

To put this in context, Anssi stands about 2 meters tall - about 6 foot 4, has dazzling blue eyes, a booming voice. You know, he’s kind of a scary dude.

He said, “I invited 2 finalist agencies to meet me. I said to both of them: Don’t show me any creative. That you got this far mean that you’ve world-class creative. You show me creative — I throw you out of the office right now. Instead, show me the systems, processes and accountabilities for managing a half-billion euro account. On the basis of that, I choose.”

In all my years in marketing, I’d never heard of that from a VP or Chief Marketing Officer. It felt like news from Mars. But it has reverberated ever since.

In fact, it was that conversation that gave rise to the distinction of marketing operations management — or MOM.

This figure depicts my best guess as to how Anssi envisions the execution of strategy by his marketing operations. How he envisions and holds strategy.

By the way, in one of the Nokia workshops, I heard the best definition of strategy from a really smart guy, Matt Wisk - now the CMO at United Online. Matt said, “All this conversation around strategy is a bunch of nonsense. Strategy is one thing: a mechanism for marshalling resources for maximum competitive advantage.”

Wow. Strategy is not a mental map. It’s not a story. It’s a mechanism for allocating — marshalling — resources to achieve maximum competitive advantage.

This gave rise to what I now call a “strategy map for marketing operations.”

In it, you will find five categories of marketing resources. First, brand integrity. That’s all about establishing emotional connections with the customer. Second, you have strategic differentiation. That’s all about delivering a “Wow!” And visceral delight to customers.

Third, market coverage. No matter how great your value proposition, if you don’t get market coverage, very little happens. Market coverage is really about achieving a commanding position in the market, hitting all the key touch points where brand touches the customers.

Fourth, we have MarComm supply-chain orchestration. How do we get our operations and systems to produce things on time, at budget — so we can achieve concurrent global launches — or at least concurrent pan-regional launches?

MarComm supply-chain orchestration also emphasizes how automation and productivity improvements enable you to reallocate spendings in operational aspects of marketing; how to reduce headcount, soft costs, and external expenses, and apply those savings to more strategic areas like buying more ad words, more media. We call it the productivity dividend.

It also addresses the how marketing should address the question, “How do we use DAM? How do we use MOM?”

I can see only one point: reduce your internal operating costs within the current budget cycle and spend those savings more strategically before your CFO snatches them. Thus, you essentially get more money to spend of the strategic stuff without increasing annual budgets — to use a military term, get more tooth and less the tail (of logistics and supply lines).

DAM and MOM enable you to buy more media without increasing your overall annual budget.

Oh, by the way, I have found that most marketers hate efficiency. Marketers just hate efficiency and most everything connected with it. Marketers care about creating opportunity — not about being stingy. Marketers only get interested in efficiency to the extent that say — “Here’s a productivity dividend of $10 million that you can now spend and your CFO doesn’t have to know about it.” That gets a marketer excited. A productivity dividend of free money.

Fifth and last resource of a marketing operation, you have digital brand-interaction. Let me explain what I call “digital brand-interaction.”

TITLE:
Long Tails Wag Big Dogs

SUBTITLE:
How the synthesis of professional and user-generated content will continue transforming media, entertainment, publishing, and marketing

KEY TOPIC:
How digital asset management speed convergence of professional and user-generated content

PRESENTATION DATE:
12 May 2008

VENUE:
Henry Stewart’s DAM and MOM Symposium, New York, NY USA