Tony Surtees. Founding VP and GM, Yahoo! Commerce Group. CEO, Santa Clara Group. scg. June 17, Santa Clara Group Pty Ltd

Transcription

1 Tony Surtees Founding VP and GM, Yahoo! Commerce Group CEO, Santa Clara Group June 17, 2003 Santa Clara Group Pty Ltd scg

2 Shoot your Marketing Manager RMIT BUSINESS DEAN S LECTURE SERIES June

3 Lessons from User experience drives everything Technology creates new opportunities Led by the market Human face to technology Power of a global brand & local relevance ebay!

4 Market changed forever Brands win, Experience Delivers, Ads? Networks are everywhere Marketing led by CFO, CIO & CEO Marketing+Finance+Technology

5 Coca Cola Here at Coca-Cola we're thinking about marketing in a radically different way Steven J. Heyer COO, Coca Cola Co.

6 While we recognize great advertising and great marketing,this year one of the biggest awards we gave out was for marketing ROI We are going to learn how to leverage more knowledge, scale and drive the efficiency and the effectiveness of our marketing investment. P&G CEO A.G. Lafey

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8 Trends Fragmentation & proliferation of media Erosion of mass markets Global market for talent, capital Next leap in productivity? Marketing is the target!

9 Market changed forever Brands win, Experience Delivers, Ads? Networks are everywhere Marketing led by CFO, CIO & CEO Marketing+Finance+Technology

10 CFOs used to see the brand as soft Du Pont is turning the softness of brand valuations into hard numbers. Carol Gee, Du Pont Global Director of Brands for Apparel and Textile Sciences CFO Magazine, November 2001, p99

11 Brand The leaders common deliver ground experiences around companies that have built great brands These is not companies performance. have They outperformed recognize the that stock consumers market for live the in an last emotional fifteen years world. and Emotions secured drive the greatest most, if share not all, of wallet our decisions Scott Bedbury, Starbucks Citibank-Interbrand study 1998

12 This is the end of the pure product era. We are a platform for delivering services that drive the customer experience. Carly Fiorina, CEO - HP

13 What British Airways does is to go beyond the function and compete on the basis of providing an experience. Sir Colin Marshall, British Airways

14 Expectations affects experience

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16 Effectiveness of advertising 30% of media had major positive effects 20% of media had minor positive effects 50% of media had NO positive effects Marder, Eric. The Laws of Choice: Predicting Customer Behavior. (in Professional Investor, Feb. 2003, p25)

17 Intel had better than an 80% market share in microprocessors before it ran its first "Intel Inside" ad

18 What ad agencies & marketers think about each other?

19 rests on the assumption that a repeated message can change people s opinions and behavior and that it can keep them coming back as long as they hear or see the message often enough Bob Coen s Insiders Report Universal McCann, McCann Erickson

20 New research ANA American Express BBDO Bayer Beringer-Blass Bristol-Myers Squibb British Airways Brown-Forman Campbell Soup Carat Citigroup Coca-Cola Compaq DAS DDB DaimlerChrysler D Arcy Dell Diageo Dow DuPont Eli Lilly Ernst & Young ExxonMobil FutureBrand FCB FedEx General Motors Grey Hakuhodo Hewlett Packard H&R Block IBM J Walter Thomson Johnson & Johnson KFC Kellogg Leo Burnett Levi Strauss McCann-Erickson Mars Merrill Lynch Microsoft Mindshare M-real Nestle Ogilvy & Mather Omnicom Orange Pfizer Procter & Gamble Reckitt Benckiser Saatchi & Saatchi Sonera Sony Springpoint TBWA Unilever Universal McCann UPS USPostal Service United Airlines Verizon Volkswagen survey by: Nick Bishop & The O Partnership (Paris) Through The Loop (London) Bellwether Leadership Research (Detroit).

21 Agencies said Clients provoke dislocation through a lack of clarity on what constitutes success No integration between clients & agencies Clients not (technically) structured to handle integration No real negotiation on remuneration Downward pressure on agency margins has a significant effect on client/agency relationships Challenged by increasingly limited talent pool

22 Marketers said 70% agencies fired by new managers first 12 months Agencies just mirroring (their) marketing problems Agencies need a better understanding of client needs Lost the strategic partner role through cost-cutting Big agency groups mean big inefficiencies for clients Distance between expectation and delivery in the area of brand communications integration is significant Lack of quality resources on the agency side

23 Market changed forever Brands win, Experience Delivers, Ads? Networks are everywhere Marketing led by CFO, CIO & CEO Marketing+Finance+Technology

24 Networks are everywhere Talking to individual customers Mass customization (My Yahoo!, Amazon) Personalization Customer care Talking to each other Market networked (IM, & SMS) Selling each other (viral marketing, ebay) Business networks buying groups, user groups, lobby groups, etc. Competitors Ford & GM co-investing building common car power train

25 How networked are we? June 6, In less than 24 hours, Bugbear.B has infected more computers than anything else. 23% of computers infected in 24 hrs!

26 more relevant & accountable practice $ ROI IRR finance % ERP integration marketing CRM technology 24X7 tools the new CMO like wow

27 New CMO Owns the customer experience No longer best creative marketer Critical support to CEO Driver of shareholder value, ROIC Realities of market & capabilities of new tools Product management skills Performance culture with process & metrics

28 Successful Marketers Are Behavioural Psychologists

29 Market changed forever Brands win, Experience Delivers, Ads? Networks are everywhere Marketing led by CFO, CIO & CEO Marketing+Finance+Technology

30 MF Culture Clash Marketing is optimism, fun & event driven Financial analysis is hard Same terms to mean different things Boards controlled by accounting/finance Justify relevant financial returns

31 Brand Valuation Questions Value of my brand; how has it changed over time? How strong is my brand and why? What will maximize my brand s strength and value? How to reverse the erosion of my weakening brand? Is my brand suitable for expansion into other categories and countries? Does my brand need a partner to enter a certain market and, if so, which one?

32 BrandEconomics Relative brand strength Brand essence & imagery EVA financial management Industry economic analysis definitive, financially grounded answers to key branding questions

33 Market Value Added MVA measures how much more a business is worth than the capital invested in it MVA EVA Shareholder Value Added Total Shareholder Value Total Net Operating market Profit value After Tax Equity Charge and for Capital Debt capital Shareholder Investment Gap between intrinsic value and market value is an investor opportunity

34 Brand strength Differentiation + Relevance Brand stature Esteem + Knowledge

35 Differentiation (uniqueness) First stage of brand relationship leads to trial More advanced the market, more crucial Differentiation is Yahoo & Starbucks ranked high early on Establishes the price premium Relevance (size of market) Intuitively, relevance would seem to come first Builds the brand relationship & staying power Fads have low relevance

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37 Brand lifecycle

38 Market changed forever Brands win, Experience Delivers, Ads? Networks are everywhere Marketing led by CFO, CIO & CEO Marketing+Finance+Technology

39 Why is technology relevant? Web has 90 million channels 40% of US productivity growth in 10 years largest single private industry contributor & $US373 billion in cost savings by 2005 OL s & Network effect Expectations changed forever Lessons from Intel, Yahoo!, Microsoft We re all in the valley

40 Technologies to watch Database & Analytics Addressable Media Instant communications Collaborative workflow tools Integration with ERP, Supply Chain Management, Financial Management, SFA Transaction tagging

41 The US Market At least six different markets (north-east, south-east, mid-west, south-west, California and north-west) Able to support many companies competing within each market and across the whole country A vast and complex economy Supports (demands) a high degree of specialization Often highly parochial (ex California & North East) The worlds pre-eminent Product Managers Success could be measured by achieving market entry in any of the six markets

42 Conclusions Market changed forever Brands win, Experience Delivers Networks are everywhere Marketing+Finance+Technology = NM

43 Contact Tony Surtees Santa Clara Group m: o: (02)