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SapientNitro Global Marketing Series
Five Ways
Agencies Are
Grappling WITH
global marketing
Article
3
of 3 The Evolution of Global Marketing | By Freddie Laker and Hilding Anderson
Executive Summary
CMOs are struggling to adapt to a world that is fundamentally different from when
they started their careers. Disruptive digital technologies and the new expectations
of the global consumer are forcing global firms to adjust and innovate.
At SapientNitro, we have made a significant effort to understand how these changes
are impacting large global organizations. What we found was surprising: just 15% of
senior marketers are prepared to deal with the rapidly changing consumer, and just
8% believe agencies are succeeding in their support of global brands.
This should be a wake-up call for global marketers.
To further develop an understanding of the causes and implications of these trends,
we have conducted a 6-month study of 114 CMO-level marketers, including oneon-one interviews with former or current CMOs including The Home Depot and
Intercontinental Hotels.
Our research has culminated in three articles. The first is focused on identifying the
obstacles, and understanding the implications of these new challenges. The second
posits a new “Global Marketing Mindset” of the future CMO — one more comfortable
with technology, consumer insight, analytics, and multi-disciplinary strategy teams.
The final article explores the implications of these trends for agencies — how
agencies can better support large global brands; it also points out major areas
where they are currently failing.
?!
Together, these pieces represent our perspective on the future of global marketing.
While it is a challenging future, it also is full of opportunities for innovative,
adaptable, and entrepreneurial leaders and businesses.
DEVELOPEr
STRATEGIST
storyteller
DESIGNER
architect
engineer
anthropolist
MARKETEER
Global agencies continue to grapple with a digital world requiring
global consistency, but local articulation. Despite repeated efforts
over the past two decades, agencies have been unsuccessful at fully
solving the problems inherent in global account management in the
digital age. Our research revealed the damage it has done to CMOs
— just 8% of CMOs feel that their global agencies are supporting
them successfully. When we looked at marketers who identified
themselves as technology savvy, the number dropped to zero (0%).
copy writer
INTRODUCTION
SapientNitro’s recent research found five major problem areas,
which agencies must address: increased specialization, a lack of
deep country-specific knowledge, a lack of strategic digital thinking,
a lack of omni-channel global concepts, and a lack of investment
into skills and digital tools.
1. Struggles With Agency Specialization
Senior global marketers deal with the daunting challenges of managing multiple
countries every day. Too often, they are not getting multi-channel, global thinking
from their fragmented agency portfolio. The growth of disruptive technology has
fueled a proliferation of new types of specialized agencies. But it comes at a cost —
particularly for complex global brands.
As we mentioned in the introduction, the research shows that just 8% of senior
marketers believe their agency partners are succeeding in their support of global
brands. In our study, roughly 60% of senior marketers characterize themselves
as tech-savvy. Among those who are technology savvy — presumably the group
best able to understand the opportunities of this new disruptive technology — the
number believing their agencies were successfully supporting global brands
dropped to zero (0%). We believe these data show that even the most sophisticated
marketer will struggle with too many specialized agency partners.
Another aspect of the problem is that many digital agencies don’t offer end-to-end
solutions. According to a 2010 survey, 80% of those surveyed in the UK feel that
digital agencies are too fragmented and specialized, and want digital agencies to
grow their service to provide a fully integrated offering (such as design and build,
development, email, eCRM, search, data, display, and social media).” 1
One solution CMOs are using is to consolidate their agency partners centrally.
Our research found that nearly 50% of marketers are seeking to consolidate their
agency partners at a global level.
Top agencies recognize the problem of specialization and separate P&Ls, and
various solutions have been proposed. One option is to create “mini-agencies”
for big clients. WPP CEO Sir Martin Sorrell’s experiment at Dell — a $4.5B global
account — is an example of the benefits and pitfalls in this approach. In this case,
they attempted to attract the stars to the account from across WPP. But separate
P&Ls and the loyalty to the agency — not to the holding company — impeded the
ability to create the best-in-breed team structure. Dell quickly reverted to an “ad
hoc” set of agencies, and ultimately moved the account to three smaller agencies
— none of which were part of WPP.
Clients are increasingly looking for the integration of teams across multiple
disciplines — design, architecture, engineering, anthropology, and storytelling can
all play a role. Some of the best thinking comes when these skills are united under
a single roof, not spread around the world.
Brands need to find the right
strategic partners to get the
right ideas. I’ve seen brands
with 30 people from different
agencies.
Former Unilever SVP Brand Marketing
Tight integration is particularly
important for large, global
accounts for four main reasons:
the importance of countryspecific knowledge, the risk
of a cacophony of noise if not
properly organized, the difficulty
in identifying team resources
in global accounts, and the
growing emphasis on multichannel experiences.
Increased specialization represents a challenge for which agencies — particularly
large, global agencies — continue to seek solutions.
1
Costa, Marylou. “Remodelling the Agency Relationship for the 3.0 Age.” August 2010
Figure 1:
CMOs Report That Agencies Are Not Succeeding
In Their Support Of Global Brands
% of respondents who agreed or strongly agreed
Agencies today are succeeding
in their support of global
brands.
Our current global agency
partners have the necessary
global footprint to support our
brands.
8%
2. Local Needs and Tastes Remain Under-Explored
12%
FIGURE 1 To survive in the new marketing world, marketers must be flexible. Yet a minority of marketers
feel prepared to deal with integrating their marketing activities to reach these consumers.
Source: Q2 2012 online survey to 114 senior marketers with global responsibilities
And there is substantial budget being spent locally; nearly a quarter (23%)
of companies spend more than 50% of their marketing and merchandising
budgets at the local level. 3
One big surprise from our research is the gap between the promise of local
customer understanding and the reality. Agencies realize the importance
of localization, yet just 11% of their senior-most clients strongly agree that
global agency partners have a deep understanding of local needs and
requirements.
We also know that deep customer insight helps win pitches. According to our
survey, deep insight into changing customer behaviors is the number one
capability for choosing agency partners (see sidebar). And this local insight
is critical for both tech-savvy marketers and less tech-savvy marketers; both
scored “deep insights into changing consumer behavior” in their top three
selection criteria for new agencies.
The core problem is that many agencies’ global footprints are insufficient,
according to clients. Just 12% of CMOs strongly believe their current
agencies possess “the necessary global footprint” to support their brands. 2
Figure 2:
CMOs Prioritize Knowledge About Local Needs
And Tastes In Choosing Agencies
This local knowledge is growing more important in the digital age; 92% of
respondents responded that the importance of tailoring campaigns to local
values, customs, and norms is going to be the same or more important in
three years.
2
Costa, Marylou. “Remodelling the Agency Relationship for the 3.0 Age.” August 2010
October 2011 CMO Council study titled “Powering Performance on a Field Marketing Level
Through Localized Content, Advertising, Promotions, Search Contacts, and Cyber Community
Connections”
3
% of respondents who agreed or strongly agreed to the question
Q: What are the most important global trends in marketing that
will impact your business in the next 3-5 years?
Ability to provide deeper
insight into changing
consumer behavior
36%
53%
89%
How do large multi-nationals choose agency partners? Top 3 selection criteria for:
#1
Best-in-class creative
Brand stewardship
(e.g. brand strategy, etc.)
33%
38%
54%
49%
88%
87%
FIGURE 2 Managing global campaigns in the new global and digital world was identified as a key challenge.
In particular, social media, and blending online / offline experiences were key global marketing challenges.
Source: Q2 2012 online survey to 114 senior marketers with global responsibilities
non-tech savvy marketers
technology savvy marketers
95.7%
87%
82.6%
82.6%
Brand stewardship (e.g. brand strategy, etc.)
Ability to drive cost efficiencies by utilizing fewer agencies across
multiple geographies /capabilities
Ability to provide deeper insight into changing consumer behavior
Best-in-class creative
Best-in-class creative
VS
Significant amount of local expertise in our key markets
(e.g. agency having physical offices in key markets)
Ability to provide deeper insight into changing consumer behavior
Brand stewardship (e.g. brand strategy, etc.)
88.3%
88.3%
88.2%
88.2%
FIGurE 3:
Agencies setting up a global campaign
for a global organization must have
a presence and/or experience in the
markets they are focusing on. An agency
with one office in NYC cannot serve the
needs of our organization in Bangalore.
Senior Global Marketer from 2012 Survey
HOW DO TECH-SAVVy MArKETErS THINK ABOuT AGENCIES DIFFErENTLy?
How important are each of the following
capabilities when selecting agency partners?
TECH-SAVVy1
NON-TECH SAVVy
% who strongly agreed
% who strongly agreed
Is online an important revenue channel for
your business (i.e. selling products or services
online)?
Our current global agency partners push us to
think across all channels, not just one or two.
Significant amount of local expertise in our key
markets (e.g. agency having physical offices in
key markets)
74%
24%
44%
Ability to provide deeper insight into changing
consumer behavior
I am satisfied that our current global agency
partner(s) depth (e.g. deep marketing insights) and
breadth (a mix of digital and traditional) of skills.
Ability to drive cost efficiencies by utilizing
fewer agencies across multiple geographies/
capabilities
61%
17%
39%
47%
+27.1%
0%
+23.7%
24%
+20.6%
41%
+20.2%
0%
+17.3%
24%
+15.3%
Agencies today are succeeding in their support
of global brands.
14%
0%
Cross-channel expertise in both digital and
traditional commerce
46%
24%
FIGURE 3 The new CMO - one who is as
comfortable talking CMSs and multi-variate
testing as brand tracking studies – has very
different expectation on the role of agencies.
What we found was that they are much more
likely to expect multi-channel thinking from
their global partners, much more likely
to choose agencies which offer depth and
breadth – and hence be satisfied with that
breadth – and also to believe agencies are
succeeding. Agencies which can connect to
these types of knowledgeable leaders – and
provide the right mix of services – seem to be
performing better than those who are not.
DIFFErENCE
Source: Q2 2012 online survey to 114 senior
marketers with global responsibilities
+14 %
+22.7%
4
Best-in-class creative
52%
The research also revealed that this local knowledge gap among
global agencies appears to be driving the usage of local agencies
— agencies that often lack the technical depth to build gamechanging digital platforms at scale. Two-thirds (67%) of senior
marketers agree that local agencies are an essential part of their
global, go-to-market strategy. The result is that game-changing
digital or cross-channel experiences may never get built.
Digital pure-plays, which traditional agencies have developed over
the years, were also singled out as missing the global footprint.
A former CMO of a global CPG corporation summed it up: “My
experience has been that a number of digital agencies lack a
global perspective. They don’t have a strong [global] footprint.”
71%
-19.0%
Tech Savvy is defined as those who agreed or
strongly agreed to the statement ‘I consider
myself to be very knowledgeable about
technology (e.g. the back-end infrastructure
for marketing programs)’
And if you need more validation of the emphasis on local expertise
by global CMOs, respondents to our online survey also were clear
about this need.
Agencies setting up a global campaign for
a global organization must have a presence and/or
experience in the markets they are focusing on.
An agency with one office in NYC cannot serve the
needs of our organization in Bangalore.
senior global marketer from 2012 survey
There are very few agencies
that can truly operate at a global
level and provide equally good
services in different markets.
This is particularly true in the
emerging economies. This trend
is exacerbated once you start
to work across multimedia
channels … relevant marketing
is done on the ground and is
culturally specific.
experience
researcH
insigHT
markeT knoWleDge
culTural aWareness
experTise
local neeDs
senior global marketer from 2012 survey
The solution that many agencies look for is to operate as a global network;
it should be a network where any region can connect with and bring in the
global perspective and insight. But the reality is that the success of this
approach depends on the effectiveness and quality of the global management
team. Deep consumer insights on the global level are key to developing great
global experiences.
For example, mobile technologies vary by market. One story we heard was
of a client who tapped top creatives at agencies in London and India for
Two-thirds of senior marketers
(67%) agree that local agencies
are an essential part of their
global, go-to-market strategy.
a feature phone
(non-smartphone)
project in Southeast
Asia. Only the India
team got it right —
the London team
didn’t embrace
the limited technology of feature phones, while the India team developed a
groundbreaking campaign using the available features. Other global mobile
nuances include variation in the support of texting plans, or the rising role of WiFi in lieu of voice plans in developing countries from Mexico to Brazil. This level
of local understanding is helped by geographic proximity.
The bottom line is that many global pitches are made — and won — based on
the strength of consumer insight in multiple regions. yet a great challenge
remains in how to operationalize strategic insight across different P&Ls,
cultures, and languages. The research shows that too often global agency
partners are not bringing deep local understanding.
FIGurE 4:
DESPITE COST PrESSurES, LACK OF LOCAL KNOWLEDGE
IS DrIVING CMOS TO LOCAL AGENCIES
3. GAPS PErSIST IN THE STrATEGIC MIx
% of respondents who agreed or strongly agreed
Our current global agency partners
have a deep understanding of local
needs and requirements.
35%
Local agencies (i.e. those operating in
just one country) are an essential part
of our global, go-to-market strategy.
11%
In an environment of disruptive technology, CMOs are demanding
more from their agencies. Agencies are increasingly being tapped for
deep strategic insight across both traditional and digital. According
to our survey, however, few agencies (just 10%) are fully integrating
digital and traditional strategies for their clients.
46%
51%
16%
67%
In the agency world, both traditional and digital agencies share the
blame. For traditional agencies, our survey found that just 11% of
global CMOs strongly agree that traditional agencies have a good
understanding of how to leverage digital. While digital agencies are
hardly exempt: less than half (43%) of CMOs agree or strongly agree
that their digital agency partners have a leading strategic role in the
marketing decision-making process.
COST EFFICIENCIES DrIVE CMOS TO WANT TO
CONSOLIDATE
% of respondents who agreed or strongly agreed
Ability to drive cost efficiencies
by utilizing fewer agencies across
multiple geographies/ capabilities
46%
32%
Over the past five years, both groups have continued to invest to try to
close this gap. For example, agencies are shifting from a “big idea”
to an organizing idea — one that defines a brand experience across
channels, countries, and platforms. And it is even more important for
global accounts than domestic accounts, as it can provide guidance to
local partners and allow them to extend and improvise on their own.
In our experience, the home office tends to want to be more brandoriented, while local markets want tactical, short-term activities with a
defined rOI. An organizing idea allows you connect these two goals.
The bottom line is that while traditional agencies particularly are
strong at developing ideas, which map to an overarching strategy,
both groups need to do a better job of integration and working across
channels.
78%
FIGURE 4 Less than 11% of CMOs strongly agree their global agencies have a deep understanding of local
needs. The result is that CMOs continue to look elsewhere for this critical capability, often to niche, local
shops which in the long run increase brand, management challenges, and increase ‘silos’ of expertise.
Source: Q2 2012 online survey to 114 senior marketers with global responsibilities
4. CHALLENGES IN DELIVErING GLOBAL MuLTI-CHANNEL IDEAS
FIGurE 5:
COST EFFICIENCIES DrIVE CMOS TO WANT TO
CONSOLIDATE
% of respondents who agreed or strongly agreed
Our marketing activities are fully
integrated and working together
(e.g. digital activities are in sync with
traditional media campaigns).
9%
FIGURE 4 Less than 11% of CMOs strongly agree their global agencies have a deep understanding of local
needs. The result is that CMOs continue to look elsewhere for this critical capability, often to niche, local
shops which in the long run increase brand, management challenges, and increase ‘silos’ of expertise.
Source: Q2 2012 online survey to 114 senior marketers with global responsibilities
Multi-channel consumers spend more — up to 400% more —
compared with a single-channel consumer 4. yet in our discussions
with company and agency marketers, too many described situations
where global silos within organizations and agencies prevented the
development of effective cross-channel experiences.
The research is clear: in this new multi-channel world, just 16% of
senior marketers strongly agree that their global agency partners are
pushing them to think across all their channels, not just one or two.
4
“Multichannel At The Heart: Lessons From M&S On How Multichannel Is A Part
Of Everyone’s Job” Laura Wade-Gery, Executive Director, MultiChannel eCommerce
from Marks & Spencer
Campaigns should be developed to be
channel agnostic. [The] going assumption is
that it has to go anywhere and everywhere.
On the POS physically and digitally. On TV.
Online. If you start with a channel in mind, it
will be very difficult to have global ideas.
– SVP Global Media, CPG, Experience: North America,
South America, W. Europe, S.E. Asia
FIGurE 6:
MuLTI-CHANNEL CAPABILITIES ArE IMPOrTANT…
% responding moderately or extremely important
Furthermore, when we studied non-technology-savvy marketers, they
appeared particularly likely to minimize multi-channel. In our survey,
none (0%) of the non-tech-savvy marketers strongly believe they are
being pushed to think across channels. This is clearly different from the
tech-savvy marketers, who indicate that roughly a quarter (23%) of their
agencies push them to think multi-channel.
In the face of the latest in disruptive technologies, the ability to go outside
of traditional channels is critical. For example, many 18- to 25-year old
men targeted by marketers are very difficult to reach using traditional
media buys. One senior leader noted that “ultimately, traditional channels
are not the only or even the best way to reach these segments.” Social
media, in-game media purchases, and other tactics should be applied to
reach these consumers. Agencies will be doing their partners a disservice
if they don’t bring these ideas to the table.
And CMOs realize it. As one respondent noted when asked what was the
most important characteristic of their best global agency relationship:
“the ability to help with the strategic application of brand to a multichannel and multi-country environment.”
The implications of this gap are significant. Agencies have a responsibility
to help their clients envision and then deliver global multi-channel ideas,
even if it means we must fight to overcome outmoded organizational
structures, practices, and partnership models.
Cross-channel expertise in
both digital and traditional
marketing
39%
46%
85%
…BuT TOO FEW AGENCIES ArE HELPING CLIENTS
THINK ACrOSS CHANNELS
% of respondents who agreed or strongly agree
Our current global agency
partners push us to think
across all channels, not just
one or two.
47%
10% 57%
FIGURE 6 Deep consumer insight emerged as the most important single capability for selecting
agencies. yet too many agencies are failing to invest in research and consumer insights. The result
is that local knowledge lives in local agencies, while global agencies have the budget and technology
capabilities to create the strong experiences which CMOs are demanding.
Source: Q2 2012 online survey to 114 senior marketers with global responsibilities
FIGurE 7:
DIGITAL AGENCIES, IN PArTICuLAr, ArEN’T BrINGING
THE rIGHT STrATEGIC MIx
% of respondents who strongly agreed
I’m satisfied that our current
global agency partner(s) depth
(e.g. deep marketing insights)
and breadth (a mix of digital
and traditional) of skills.
Our digital agency partner(s)
has a leading role in our
marketing decision-making
process.
10%
6%
CMOs Aren’t Satisfied
And Digital Isn’t yet Leading
FIGURE 7 Great global strategy requires a mix of depth and breadth, yet few agencies are excelling.
And though they specialize in the major area of growth for agencies, many digital firms aren’t taking
a leading role in delivering great strategy.
Source: Q2 2012 online survey to 114 senior marketers with global responsibilities
FIGurE 8 :
DIGITAL AGENCy PArTNErS ArE ONLy ADEQuATE IN DIMENSIONS OF
SCALE AND MuLTI-CHANNEL COMMErCE
% of respondents who strongly agreed
Our digital agency partner(s) have the ability to
scale and handle large engagements of any scale.
Our digital agency partner(s) have deep
expertise in commerce (i.e. kiosk, online, mobile
and in-store digital commerce experiences).
47%
43%
10% 57%
7% 50%
5. rIGHT SKILLS AND ASSOCIATED TOOLS rEMAIN CHALLENGING
FIGURE 8 The ability to scale, and the ability to provide deep commerce expertise are core elements of delivery for digital agencies
in the new world. yet too few are delivering at the level they should.
Source: Q2 2012 online survey to 114 senior marketers with global responsibilities
FIGurE 9:
DIGITAL SKILLS rEMAIN A CHALLENGE FOr CMOS – AND AGENCIES
ArEN’T PrOVIDING THE SOLuTION
Q: How challenging do you consider each of the following for your marketing organization?
Is this less challenging, more challenging, or about the same as it was 5 years ago? In 3-5 years?
ExPECTED CHANGE IN 3-5 yEArS
TODAy
% responding moderately
or extremely challenging
LESS
Gaining access to the
appropriate skills and
people across the
organization
51%
26%
18%
MOrE
Clients rely on agencies to provide these skills. yet the skill
requirements at many global agencies haven’t kept up. In
a recent CMO Council survey, just 9% of senior marketers
believe traditional ad agencies are doing a good job of
evolving and extending their service capabilities in the
digital age. 5 New sets of integrated tools — and the proper
training — in analytics, localization, and multi-channel
campaign development and delivery all take time to learn.
And, it can be quite difficult for an agency to combine
regional knowledge with these new digital skills.
32%
Skills such as real-time data that measures social media
chatter or digital media performance are incredibly
% of respondents who strongly agreed
Our traditional agency
partners have a good
understanding of how to
leverage digital.
Agency leaders know that their clients struggle with a
lack of skills in digital — especially globally. In our survey,
over three-quarters of senior marketers (77%) noted that
it was moderately or extremely challenging to gain access
to the appropriate skills and people. And nearly a third of
respondents (32%) believe it will get more challenging in
the next three years.
11%
FIGURE 9 As we reported in an earlier article on this subject, access to the appropriate skills and people across the organization is
quite difficult for CMOs. But Agencies are not doing their part. In particular, gaps in analytics, localization and multi-channel campaign
development were identified in our research.
Source: Q2 2012 online survey to 114 senior marketers with global responsibilities
important. This data is fundamental to executing multichannel marketing campaigns so critical in reaching the
new consumer.
Tools among companies and agencies are another gap:
the lack of a single, cross-channel digital marketing
platform was identified as the number one obstacle to
the growth of digital marketing among 350 enterprise
decision makers. 6
The research confirmed this: traditional agencies are likely
to be challenged. In fact, 47% of client marketers plan
to build internal capabilities and use incumbent agency
services less. Furthermore, 45% are bringing in outside
consultants to help set up and structure digital programs. 7
5
CMO Council 2012. http://www.cmocouncil.org/press-detail.php?id=2943
6
http://www.dataxu.com/news/press-releases/digital-marketing-studycmos-believe-big-data-is-a-game-changer/
7
CMO Council 2012. http://www.cmocouncil.org/press-detail.php?id=2943
About our research
Conclusion
The rapidly evolving world of marketing poses new and dynamic challenges for agencies. Tasked with
partnering with CMOs and their marketing teams globally, agencies have an opportunity to be a trusted
partner managing an ever-increasing number of marketing channels, and rapidly changing consumer
demands.
Yet what we found in our research was that many CMOs remain dissatisfied by their partners. Despite
multiple attempts, more hard work remains for agencies to build the right team and assets to deliver
sophisticated global accounts that balance local articulation with global consistency.
For more research on how CMOs and organizations are changing the way they think about global
marketing, be sure to see the other articles in SapientNitro’s Global Marketing Series: “CMOs Reveal
Obstacles to Successful Global Marketing” and “The New Global Marketing Mindset.” The first is focused on
identifying the obstacles, and understanding the implications of new challenges of globalization and the rise
of disruptive technology. The second posits a new “Global Marketing Mindset” of future CMOs — one more
comfortable with technology, consumer insight, analytics, and multi-disciplinary strategy teams.
While the five areas covered in this paper demonstrate major problems for both marketers and agencies,
they also represent an opportunity for forward-thinking agencies to set themselves apart from the pack —
for the ultimate benefit of agencies and marketers alike.
© Sapient Corporation 2012
Building on our team’s three decades of multi-channel
marketing experience, SapientNitro conducted a series of 20+
detailed interviews with senior marketers within and outside of
SapientNitro, and followed it up with a far-reaching survey to
114 senior global marketers and global CMOs. We also reviewed
existing literature related to this topic. The majority of the
research was conducted in Q2 2012.
We have captured this research in three articles — the first
focused on new global marketing challenges, and second on key
elements of the global marketing mindset, and the third on five
ways agencies are struggling with global brands today.
About THE AUTHORS
FREDDIE LAKER – is VP of Global
Marketing Strategy and has extensive
experience working across a broad range
of global clients. He actively speaks at
leading conferences around the world
on topics ranging from global marketing
trends to emerging disruptive technologies.
HILDING ANDERSON is a Sr. Manager
of Research + Insights, and focuses on
digital strategy and the emerging digital
consumer for SapientNitro. He is also the
editor for Insights 2013, Sapient’s annual
digital trends report.