Current Marketing Threats & Opportunities

I have been asked by a number of people about the current state of the market and the key competitive threats and opportunities.   There have been many different context put on that question but I wanted to share some of my answers and see if there are any differing thought.  While many of these may seem like big vs. small agency that is not the case.  The opportunities are real for either agency to win this this current economy.

Threat – Fear

CMO’s and other senior marketers are paralyzed with fear and most likely won’t be trying anything new, deploying “big ideas” or switching to new agencies or unproven marketing tactics.  This is normal – they want to save their jobs and the precious resources they have.  However, doing nothing will lead to stagnation and the more aggressive marketer to gain market and mindshare.

Opportunity – Offering smaller success/results driven activities will allow agencies to be active in these companies.  While these projects won’t drive the revenue levels that “big idea” projects does they do allow you to have a favorable view from the clients and as the economy turns they will remember and reward your loyalty and desire to help them in times of need.
Threat – Consumer entrenchment
Times are tough and the purse strings are knotted shut.  Consumers are only buying things they must have and are making harder decisions on what to buy and which to choose.  They are asking “trusted strangers” their opinions and doing more detailed searches for reviews and experiences and not just buying on brand loyalty.

Opportunity – this is the perfect opportunity to leverage tactics that actually sell and connect with people during the buy cycle.  Integrating search and social media and searcher interest modeling we can find them during various phases of the buy cycle.  This helps us catch “anyone” who wants the products but more focused on those actually ready to buy.

Threat – Demand for Performance Improvement & Instant Wins
Every client and prospect I have met with tells me that they must sell things now.   It is scary how many agencies hear this and try to offer a big idea instead of helping them sell product now.   We see a lot of inefficiency in work that is being done by large agencies and there must be a refocus to sales while running the parallel big idea and branding programs.

Opportunity – If we can do an assessment and find the “low hanging fruit” for companies we can identify these quick wins where we can move the needle.  Similar to the “fear” opportunity we can get in do something quick and then show how smart and nimble we are to gain more access.

Threat – Google
Google is aggressively working to disintermediate the agency and key relationships.   With the recent layoff of 200 sales and marketing staff this will only increase.  They are showing the inefficiencies of agencies and doing it at higher levels of the organization where the greatest loyalty lives.  Google is leveraging Avinash and interesting presentations to get access to senior managers who can still green light projects or shift ad budgets.   I have seen the power of these very persuasive presentations that has opened doors and opportunities at many companies.

Opportunity – Work more closely with Google as a partner rather then pushing them away.  Leverage the summits that you can do with them to gain more interest and the value of integrating search with other forms of marketing.  Take advantage of the new thinking that comes from executives curiosity about “bounce rates” and the “missed opportunities” you can capture by increasing search and analytics programs.

Threat – Social Media Evangelists  & Popularity

Most of these people are hacks but they are getting attention.  They are getting access now that Digital Strategist’s should be getting.  They wield a powerful message of change and “voice of the consumer” in a time of desperation that is getting the attention of senior marketers.  Like every red hot tactic that came before; marketers will run amok and spend a lot of wasted dollars without really understanding the true business value of these tactics.

I would caution any marketer that hears a presentation o social media with only examples of “How Obama did it” or “How Zappos” is doing it.  Unless they are the owner of those programs ask them what they have done.  Both of these are very powerful success stories but the reality of both cases is they are backed by a solid foundation of service and value.  Would Zappo’s social media be as successful if they did not have a killer product and even better customer service?

Money is shifting from other forms of marketing into social media activities.  The fractured nature of the social media offering of most agencies is a problem. They are hiring the evangelists who really don’t understand corporate dynamics of marketing integration for the business applications of social media.

The other key issues is because of the access and attention they are getting with senior marketers they are starting to gain some power over marketing budgets – while the big agency still has the big relationship they need to be wary of the nimble “insurgents” who are getting time with the CMO and making a case for more integration and tactical services which runs counter to the ideas of most agencies.

Opportunity – All agencies need to be out there evangelizing on the whole ecosystem.  Agencies need bloggers talking about these prates and examples within the agencies.    This will get more attention and really help push us into the evangelist phases.   By getting more discussion time via blogs, conferences and whitepapers we can drive the changes and showcase how smart we really are in integrated digital marketing.
The biggest advantage the large agency has is access.  They have the CMO and marketing team on speed dial and if they can get in with a credible offer they can debunk the ideals of the average Social Media guru.   With social media, like with search, we can get into the organization.  Deploying both of these requires access to both people and teams where we can understand other needs.  We have positioned search as a wedge play where it opens the door for more opportunity.

Threat – Global Sales & Execution

Many companies are looking for sales outside of the US.  A recent interview with HP CMO in B2B Magazine indicated that 69% of their growth is coming from outside the US.  This has been the case for many companies from Amazon to Zurich Financial – much of the revenue is coming from outside the US and significantly more now from emerging markets.
One big problem with traditional and digital agencies is they have significant global footprints they just don’t leverage it well.  Many of the local offices come from acquisitions which have their owner agendas and P&L’s to content with and view integration is a potential drain on their individual performance.  Most agencies don’t have a “central advocate” for global business within their multinational clients.  This really needs to change.  Clients are starting to ask for a more coordinated global approach to strategy but local coordination.  I have seen a number of recent cases where local assignments were lost due to the perceived dysfunction of the parent agency or a simple lack of communication about the opportunity.

Opportunity – If agencies can harness their networks globally and have a seamless hand off I believe they can generate a lot of money not only in the US but also around the world.  Companies want market assessments and want to test opportunities in these markets which the local markets typically don’t have budget to fund this discovery.  We are seeing these projects go to smaller agencies to conduct which opens fore opportunity for the nimble shop to take business from the bigger agencies.
With search marketing we can estimate market opportunity via search demand.  We have done this for various multinational and it has helped them understand the the untapped opportunities.  If the agency can do this simple activity for them it could open the door for other local assignments in various forum of digital services that could be passed on to the local offices increasing the overall agency revenue.

Threat – Digital Migration
This is the elephant in the room. That most large corporations and agencies don’t want to admit.   There are a significant the number of people moving to digital and the companies are not moving as quickly.  According to a recent study 63% of CMO’s are moving significant shares of their budgets to digital marketing.
Corporate marketing programs and their antiquated Websites are not mirroring how people consume information in the digital age.  Yes, TV commercials are still very important especially for new products but they must be complimented by search and social/word of mouth activities.

Opportunity –  The opportunity for large agencies is to understand this migration and start aligning a significant digital collaboration to each of these programs.  If it is integrated at the beginning using agency digital resources you have effectively blocked new players from entering the company.  The “insurgent” agencies are using thee as tactics to enter the company pointing out that the big agencies don’t understand the synergies.
It is critical that the big agency must mandate a coordinated paid search program to align with the TV commercial fighting.  To not capture that uplift in searcher volume is negligence on both the agency and corporate marketer and will guarantee a loss of that additional revenue to a smaller shop or the engine directly.

Other threats?