Where Procurement Meets Marketing and More: Notes from the Advertising Financial Management Conference
I recently attended my second Advertising Financial Management Conference, an event hosted annually by the Association of National Advertisers (ANA). The ANA’s members represent a quarter trillion dollars in marketing spend, and increasingly that includes public relations. As procurement managers (one-third of attendees) become more integral to the public relations selection process, I see this and other financially focused programs as must-attend events. Yet very few public relations firm CFOs attended the Conference—in my view, a missed opportunity for our industry.
To inspire more of us to attend such events going forward, I thought I would share some event highlights. Although the conversation did focus mostly on online and off line advertising, it extended beyond simple cost-cutting to cover considerations such as value, collaboration and mutual trust. Many issues relevant to public relations firms emerged during the 2-1/2 day program, from macro business trends to what’s next in digital, social and mobile.
Paul Matsen, the Cleveland Clinic’s Chief Marketing and Communications Officer, described how social and digital communications have changed healthcare. Emphasizing the importance of using data to drive strategic marketing decisions and message customization. Matsen argued that optimizing the full marketing mix of earned, owned and paid media enabled marketers to reach the “alpha influencer.” “ As a CMO who must closely evaluate his marketing spend, he advocated a “robust earned media program” as well as close and frequent assessment of results to help determine proper messaging. According the Matsen: “Metrics can be used diagnostically to improve creativity to validate results.”
Kelly Mooney, CEO of Resource Interactive, discussed how brands are successfully navigating cutting-edge digital marketing trends. As she put it, “Buying has never been so impulsive, opportunistic and peer-influenced. E-commerce capabilities have evolved from destination sites to multiple content-rich experiences across a range of touch points.” Mooney’s speech evoked the CMO’s difficult task of discerning the right risk/reward equation for each marketing opportunity. It’s a challenge we’re addressing in our annual Critical Issues Forum, which will consider the intersection of reputation, brand, and consumer. Since consumers not only make purchases but share recommendations with real and online “friends,” the marketer’s job becomes more analytical—and complex—than ever.
Sir Martin Sorrell, CEO of WPP, parent company of Council members Burson-Marsteller, Cohn & Wolfe and Hill + Knowlton Strategies, gave a compelling speech, depicting creativity and problem solving as key concepts in the client-agency relationship that should trump a focus on cost reduction. In Sorrell’s words: “…until you get 100% market share there’s more you can do with marketing.” Sorrell identified ten important marketing trends will clearly impact business decisions made by public relations firms:
- A shift toward the East and South, including China, India, Russia and Brazil (the last of these countries is hosting the 2014 World Soccer Cup and the 2016 Olympics)
- The shortage of human capital, (i.e. those possessing the skills and abilities necessary in tomorrow’s job market)
- The Internet’s continued growth
- Increased pressure on suppliers due to growing retail power
- The rising importance of internal communications, i.e. the intersection of the company and brand
- The developing relationship between global and local structures (i.e. companies’ use of technology to increase efficiency while strengthening local market relationships)
- Finance and procurement’s rising influence in the making of marketing decisions
- The increased role of corporate governance and oversight
- Sustainability’s rise to a more prominent place in corporate strategy
- The increase in agency consolidation stemming from compensation pressure
At our April meeting, “Measuring and Monetizing Social Media,” I was reminded that today’s marketing environment is more complex, more data-driven, more analytical and more integrated every day. The Advertising Financial Management Conference only underlined this point. Public relations firms need to be nimble and creative, as always, but also provide meaningful analysis to clients, helping them to interpret the sea of information and tell better stories. To compete, we also must continue to show discipline around budgets and align marketing and financial goals.
Overall, the conference provided not only a good chance to step back and assess opportunities and challenges for our industry, but also to build relationships with the finance and procurement executives who increasingly guard the marketing purse strings.