Have you ever wondered how marketing would be practiced in 2020? The first chapter of most marketing books explain how marketing went through an evolution starting with focus on production in the 19th century, sales focus in first half of the 20th century and finally consumer centered marketing which is still major philosophy of modern marketers. However, what about the execution? In the future are marketing departments going to operate the way they did in last 50 years? Considering the recent popularity of bricks-and-clicks model (a combination of online and offline marketing) which generated great success stories Staples and Walmart, customized online advertising (a combination of internet advertising and behavioral analytics) which became an industry standard and the recent rise of CRM (a combination of customer support and user analytics), I propose that marketing and market research are heading towards convergence. Let me explain…
In the last 50 years, we have witnessed that sales departments turned into marketing and promotions sections which then were divided into market research, advertising and strategy branches. And this seemingly worked as in early 90s there perhaps was no single large corporation which did not have any sub branches in the marketing department. On the other hand Allocating marketing tasks to smaller divisions just like the way militaries function might sound just common sense but not in all circumstances. If there is a need for fast decision making in uncertain environments and if all the divisions have to closely communicate and simultaneously co-operate, having many divisions would be an obstacle against achieving group goals. Let’s say the communications department wants to do advertising in order to increase the awareness, the promotions department wants do sampling to increase awareness and penetration, the research department wants do a usages and habits study to understand user dynamics and the management wants ROI numbers to remain profitable. Although these decisions would be made at the same departmental meeting, these divisions would conduct these tasks individually reaching different people thus tripling the time and cost. What`s more, it would be three times more difficult to calculate the ROI as we wouldn’t know about the overlap and cannot track the future behavior of the research participants or the consumers who received the free samples. It is just a no brainier to ask the same consumer about product expectations, then provide samples and promotions to him and then advertise to him and finally track his purchasing behavior real-time. This means researching about and marketing to the same consumer by integrating marketing research and marketing operations under one roof. Here are some other reasons why this convergence will happen soon
Internet Revolution and Cyber Consumers
Perhaps you have read over a thousand articles that started with “internet has changed everything”. Well, this is true for marketing as well. Now, consumers spend 3-4 hours on the internet every day, get product information online and purchase online. In the past, mass advertising was everything: a million dollar TV campaign would have magically consumers run to the supermarket to get your product. However, today it is the customized online ads that rule the world marketing. Since behavioral targeting is so developed where marketers can calculate the number of online exposures and online purchase tendency it is not difficult to guess the same people decide about banner ad contents will also calculate ROI, make decisions about in-site shopping cart and write a report about the impact of each ad version. This is not different than the same marketing guy handling with distribution, ad campaign and consumer research.
Unstoppable Growth of Social Media
Everyone knew about how important social media is but it was the time when Facebook announced reaching the 500 million user base that changed all marketers opinions forever. Now, social media is seen as the future of marketing platform by many and they are not wrong about it. According to Forrester research 80% of Americans use social media frequently. What makes it so unique is the reality, interactivity and connectivity unlike any other medium. As you can guess, this is like a hitting the jackpot for marketers because people see and interact with ads, purchase products/services and can be surveyed via their social media accounts. Once again, it’s just a plain logic to not separate these tasks to better utilize social media marketing.
In the last two years we have experienced a severe economic downturn and there is no soon recovery in sight. Marketing practitioners also feel the pain and cutting their budgets. Although, there is no clear data that shows if they are cutting from research or promotions it is plausible that companies will start considering combining these divisions instead of investing in them separately. Another outcome of the economic constraints is the search for optimum ROI. Marketers are under enormous pressure to increase sales with very limited budgets. Now more than ever, it really matters to achieve more with less. In the good old times measurement of ROI was just an ideal not necessarily practical but today, where even Facebook brand group exposure counts as an impression, marketers have to report to upper management about every single penny they spend for their campaign. To accomplish better ROI, companies are expected to conduct similar marketing tasks but just for cheaper costs. As I explained above, the only way to do this would be surveying about and advertising to very same consumer which has to be handled by the same department.