Marketers being squeezed as companies seek short term results
Marketing budgets are at risk of being cut as companies increasingly take a short term view and invest in quick sales rather than longer term growth strategies, the chief marketer of electronics giant LG has warned.
Lambro Skropidis told Mumbrella firms are becoming “beholden to shareholders” and looking for rapid results which can work against marketers.
The problem is being exacerbated as the tenure of chief executives and managing directors gets shorter resulting in a tendency to look towards shorter term wins “to get runs on the board”.
“Twenty years ago people were in their roles a lot longer and invested in the longer term. Today, people are managed more short term and increasingly companies are being asked to achieve short term deliverables,” he said.
“Often it’s far easier for the sales function to use funds as it provide less risk. They can say ‘I have spoken to my customer’ and walk back in with results.
“There is only one pool of money and the challenge for an MD is to say do I take the money and run when I know I am going to get a result versus investing it somewhere else and maybe, or maybe not, get a bigger result further down the track.”
In order to take the risk out of marketing, CMO’s must more accurately predict the financial outcome of their work, Skropidis said.
That will instil confidence in the marketing department and management “will be willing to fund things”.
“The ‘trust me I’m an expert line’ doesn’t cut it anymore. If you show unpredictability, the day of getting the investment you want will start dwindling,” he said. “There’s a lot more discussion about ROI than there has ever been and marketers are being asked a simple question by the MD – ‘what am I going to get back if I give you this money?’.
“A blank stare back isn’t cutting it anymore, neither is measuring after the event. The industry has to come to terms with the fact that it has to get better at predicting the future and it’s not an easy task. People often shy away from it because it often doesn’t lead to the outcome people want.”
Skropidis called on marketers to step up their research in order to better predict results – something they often overlook.
“The amount of companies who implement big budget activities with little or no research is astounding,” he said. “Increasingly marketers are going to have to give people who control funds greater comfort that money is going to be spent wisely.”
Marketers themselves are becoming risk-averse as they demand ideas from agencies that will produce results. For that reason, creative ideas that bring with them an element of risk “are being left on the shelf”, the LG marketing chief said.
“Some of the best campaigns are risky,” he said. “The challenge is how do you do great things when you are almost being led down a path of less risk.
“In the same way marketers can’t throw the ‘trust me’ line, they are telling agencies ‘you are telling me that’s a good idea but how do I know that? What evidence have you got to take the risk element out for me?”
Lambro Skropidis will be appearing on a Q&A panel at next week’s Secrets of Agency excellence conference (SAGE) conference
Steve Jones
The big question is – if it was your own money would you accept someone saying ‘Trust me’?
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