As the legend goes, a prominent traditional media executive, after visiting Google in the early days, shared his dismay to senior executives at Google: "You're f@#king with the magic!," he bellowed, concerned accountability would actually start disclosing which ads work and which ones don't.
And so began the Age of Transparency. An era where marketing is no longer based on gut instinct and loosely coupled with results. Rather, an age where creative is melded with science to show what works and what doesn't with clear and direct paths to revenue and profit. The drumbeat has only gotten louder and faster as marketers, facing global competitive pressure, economic instability, an explosion of media options, and a significant shift in consumer behavior, are demanding change from their own senior leadership, agencies and media companies.
We've all heard about the Chief Marketing Officer having the shortest tenure of the entire C-Suite -- it is getting better, thankfully. However, it is starting to get old for the CMOs who are (often, unfairly) catching the blame for poor products, sales, distribution, innovation and the like -- primarily since they haven't had any credible metrics to point to in order to unassailably prove their impact on revenue. Lest we forget, that is all that matters at the end of the day. A recent study suggests that by 2015, ROI will be the number one metric for measuring marketing, yet less than half of the CMOs are ready for the shift.
Many corners of the marketing and media industry have clung on with dear life to outdated measurement techniques -- audience size, panel data, media mix models, last click attribution -- in order to keep the magic happening. This party is quickly coming to an end as marketers have run out of time and boards have run out of patience. Thus the rapid adoption of media they can actually quantify -- even if that has meant underestimating other, harder to measure media, that is actually delivering revenue. The old saying "I know my advertising works, I just don't know which half" is dead as progressive marketers push to measure 100% of their marketing. Bad marketers can no longer hide behind mysterious metrics and gut feel anymore. The shift towards transparency is inevitable, accelerating and should be exciting to most marketers and media companies.
Today we are at an inflection point fueled by:
1) Virtually unlimited reserves of data on consumer behavior (what they DO rather than what they SAY they do);
2) Better marketing science and analytics methods to measure cross-media and cross-channel effects (not just the obvious, campaign-specific results; and not just the short-term);
3) Cloud-based computing technology to handle the vast amounts of consumer data and ultimately allow for automated course-correction and adaptation based on market conditions.
And, of course, some first-movers are seeing real impacts on their business by applying the latest in analytics, data leverage and course correction -- because they can now do so. A recently public example is Ticketmaster, whose innovative CEO decided it was time to bring new analytics and tools to the industry that is still experiencing 40% unsold inventory on average. An entirely new approach to dynamic pricing optimization has been deployed and the results are stunning. You can actually leverage massive amounts of data around consumer intent, interest, market variables, star power, seasonality and hundreds of other variables to create high levels of predictability. The science, technology and expertise simply didn't exist two years ago to do this, and now the old ways of pricing (dynamic or static) and marketing look very antiquated.
Wouldn't you like to know exactly what is working and what is not in driving revenue, and then make the changes and get those results? In this Age of Transparency, it is time to dispatch the solutions launched when Ozzie and Harriet were on prime time television, and make the moves to create asymmetric advantage. History has shown that more nimble, market driven companies that continually adapt and adopt win. Which side of history do you want to be on?
Next Article: What is the Actual ROI of Social Media?
Wes Nichols is co-founder and CEO of MarketShare providing predictive analytics solutions for large marketers. Follow Wes on twitter @wesnichols