What's New in Marketing - Issue 52, January 2007

http://www.wnim.com

More than just a makeover for the CV

Marketers in today's business climate recognise the need to embrace the industry's continuously evolving, fluid nature, however, depending on initial training to carry you through this evolution is no longer practical. With the number of emerging technologies and the ever-changing attitudes and behaviours of consumers, having the skills to react to this changing profession is of paramount importance to remain at the top of the game.

There are numerous advantages to continued professional development (CPD) and its benefits extend to both the employer and employee. From an employer perspective, offering CPD provides structured staff development and presents a good ‘hook' for organisations in this candidate short market. For some time now recruiters have seen a dearth of suitable candidates, and what we call a ‘war for talent' has ensued. Candidates with continued educational backgrounds and relevant experience are now able to choose from the plethora of roles on offer. In most cases a deciding factor for these candidates will include an assessment of the training opportunities available before accepting any offers. From a recruitment point of view, companies who offer CPD opportunities are more likely to gain reputations as employers of choice. Furthermore, these companies will typically enjoy increased levels of motivation and retention from their employees. It is the employer who is the ultimate benefactor of a workforce with up to date skills - it increases its own marketability and credibility to its clients.

On the flip side of the coin, CPD also enhances a candidate's prospects for career progression and gives them a competitive edge when securing a role. When making a hire, employers will typically seek a balanced mix of experience and education, and whilst there are exceptions to the norm, accredited training from a recognised institution, such as The Chartered Institute of Marketing, will always cast a positive glow over a CV and help secure an interview.

Updating skills through CPD programmes provides candidates with an avenue for demonstrating competence and expertise to current and prospective employers - many companies see it as a professional and ethical guarantee of the candidate's credentials and marketing integrity. In many instances employees who engage in CPD set a benchmark for fellow workmates to aspire to. These employees are able to share knowledge, make a marked increase in the contribution to team performance and act as mentors to less experienced staff – something all potential employers look favourably on.

As indicated earlier, the trend throughout 2006 has shown a shortage of suitably qualified candidates across all marketing disciplines, and we have seen candidates with ‘in demand' skills command more from employment packages to reflect their commitment to the profession. The marketing industry in the UK continues to boom which is reflected in the highly buoyant recruitment market in the sector. As companies continue to witness growth, the need for talented professionals will be sustained. This trend is expected to continue for the foreseeable future, and CPD will benefit both business and candidates in this respect.

Whilst it is encouraged to participate in CPD programmes and gain accredited qualifications, consideration must be given to the courses of study which will best benefit a candidates future career. Marketing recruiters have seen e-commercial skills become particularly high in demand – employees with commercial and business awareness abilities are given more responsibility and are often held in higher esteem when being considered for a post or promotion. Analytical skills and qualifications are also held in high regard, and with the emergence of new media and marketing techniques, analysing and evaluating marketing campaigns has become a whole new ball game. Accountability has never been so important and a demonstrated commitment to updating skills to complement emerging media and capitalise on its opportunities will be held in good stead by any employer.

About the author

After spending two years in Marketing, Paul Sykes joined Michael Page in 1997. Having started as a consultant in the Home Counties Paul opened the St Albans office for Sales and Marketing in 2001. He then moved to run the Midlands and North for Michael Page Marketing in 2003 and has recently relocated to his current role as a Director of Michael Page Marketing looking after the South of England. Michael Page Marketing is the UK's leading recruiter for professional positions in the marketing sector and operates from eight offices nationwide.

For further information visit http://www.michaelpage.co.uk/ .

1 + 1 = 3

As the mergers and acquisitions market begins to show signs of renewed buoyancy, it's prudent to remember that the successful integration of newly merged businesses is never a certainty.

In fact, during the heady days of the 90's boom, there were as many merger 'failures', as high profile 'successes'. More so if The Economist is to be believed when it concluded that 'study after study of past merger waves has shown that two out of every three deals have not worked'; insights which were echoed from within the Intelligence Unit that 'less than half of those involved in M& A considered them a success in retrospect'. The Sunday Times also weighed in with statistics showing that '61% of deals fail to cover their cost of capital' and 'fewer than 25% generate economic value for the buyer'.

Off the back of these depressing figures sprang a lucrative opportunity for management consultants to market post-merger integration services around the need for newly-formed organisations to focus on achieving clearly measurable critical success factors in finance, process quality, customer satisfaction, growth and innovation, and people commitment.

Yet, surprisingly, amongst all the measures for success identified as being vital, the one most frequently over-looked - or certainly under-cooked - was brand and communications.

To be fair, no one is going to claim it's unimportant to have a clear vision for a new organisation. Nor that it needs to be driven by a leadership blueprint and set of values that can help create a cohesive internal culture and compelling external business case. Yet, in the melee of pre- and post-merger 'noise', considered evaluation of these all-important 'brand' issues more often than not gets swamped by the need to address more pressing operational and financial imperatives.

Which is surely to attach insufficient importance to one of the potentially most powerful tools available to management not only to help in winning over the hearts and minds of internal (and external) audiences, but also to energise and motivate. Furthermore, given that decisions made during the early days of any merger will almost inevitably form the basis for a company's future brand position, if ill-considered, they may well adversely colour perceptions for the long-term.

In other words, it's essential that management give themselves the time, as early as possible in that process, to assess carefully the various options available in order to identify the optimum brand and communications solution. If I may borrow an old adage from the world of recruitment: ‘You never get a second-chance to make a good first impression'.

Usually the first instance of this 'pressured' thinking comes when the Board is confronted with the question: 'what shall we call the new company'? And whilst too many executives the answer may appear obvious, beneath this simple question lurks a myriad of complex ownership and politically expedient demons that can cloud objective evaluation.

If an acquisition, does it automatically follow that the dominant partner has the strongest future brand? Will the emerging new culture be a mirror of what already exists; or should it embrace the unique characteristics of the acquired (for which presumably a significant goodwill premium, in part at least, has been paid)? If a merger, does a solution that simply bolts together two existing brand names reflect a genuine desire to maximise the equity resident within both? Or is it more a matter of political expediency? Or, worse still, just not considered that important?

Would a new name, with all the legal and creative pains that entails, be more effective in positioning the organisation, even at the risk of jettisoning past strengths (but also certainly past weaknesses)?

An example of tactical thinking having significant long-term repercussions exists from the 90's when two large financial services' companies merged. Royal Insurance and Sun Alliance Insurance both had strong brand names with complimentary business and geographic strengths and took the decision early on to combine their names as Royal & SunAlliance.

On the face of it this seemed an eminently sensible solution and management was convinced this was a 'win-win' situation. Yet far from actually presenting a harmonious, value-added merger, the new name only served to reflect, despite their best efforts to the contrary, the differences that seemed to exist between the two organisations - internally and externally - and to re-enforce the management and operational tensions that were soon to emerge during the integration process.

Far from making a forward-looking statement, the contrary was seen to be the case: reflecting an organisation somehow constrained by its past. Arguably, if management had had more time to analyse the consequences of their initial decision they may have pursued a different strategy… as they were always going to struggle to establish themselves as an integrated global brand when publicly promoting a 'spilt-personality'. Business tensions and management upheavals rumbled on for many years.

Contrast this with Borealis, the global petrochemicals company formed from the merger of two very different corporate and national cultures (Neste in Finland; Statoil in Norway).

Early in the planning phase various naming strategies were evaluated and a decision agreed to create a new name in order to give the business a unique market and cultural focus, as well as strong values' orientation. Despite pressures from a marketplace notorious for cyclical downturns, the merger was a success from day one as measured against revenue targets, organisational streamlining, staff retention and qualitative image perception research, inside and outside the company. Today Borealis continues to go from strength to strength, notable for continuing on its own, highly accomplished acquisition trail.

Lest this article be seen to be solely about new naming strategies - and there are many instances when keeping an existing name is the best option - the point is a broader one. That companies not only need to approach their brand and communications thinking from a strategic perspective, but also at a sufficiently early stage in the planning process to ensure that, whatever conclusions are developed, they can be used to help align the new organisation behind a clearly defined sense of 'self'. Just as financial and organisational structures are important for success, so too are the

right brand, value and cultural structures.

So how can organisations strengthen their chances for success and what can be done to ensure that the emerging entity is seen as more than just the sum of its individual parts?

1.      Clarity. One of the main drivers for success in any M& A programme is the need for a clear vision for the newly merged entity. Ideally, this should go beyond pure business logic and operational synergies to encompass broader, value-added, even 'softer' more emotive, characteristics and aspirations. 'Changing the game' may be too strong a term, but it certainly needs to reflect a step change in attitude and performance set against changing industry dynamics.

2.      Missions. Included alongside meaningful financial and operational targets should also be other key measures regarding reputation, image, brand, corporate culture and ambition. Irrespective of any restructuring and rationalisation, the emphasis needs to be on a positive, invigorating set of values that can help drive a new, or evolved, sense of identity.

3.      Differentiation. Extending that thinking, clearly to define how the new organisation will be (re-)positioned in its market place in relation to competition. Is it simply about being 'the same, but bigger' (hardly compelling), or 'bigger, different, and smarter'? If so, what is the core differential? Importantly, how can that be expressed in a uniquely motivating way? More than just a simple 'corporate strap-line' this should underpin all future communications thinking and implementation.

4.      Name and visual identity. Ideally, it's at this stage in the process that issues to do with name and visual identity should be considered. By addressing these within the context of the broader vision, marketing and values' debate, management can ensure that decisions can be taken about these fundamental branding elements within a fully thought-out strategic framework and that an integrated programme can be developed.

5.      Organisational structures and portfolio management. Next comes consideration of the various brand and organisational relationships that need to be developed: either integrating existing operating company and business names, product or service brands; or rationalising the portfolio into a more streamlined structure. What to keep, merge, or de-list will depend upon respective historic, quantifiable brand strengths and the roles to be played within the new scheme of things. The key is to be clear about where the parent brand is heading and how these individual services fit into that overall strategy.

6.      Customer satisfaction. Given the internal focus of much of the merger process, it's essential that the 'voice of the customer' be heard throughout. Whatever structures are put in place, products or services developed, or marketing messages put out, they need to be managed in relation to helping the company better deliver against its promises and meet customer expectations. Maintaining an external perspective is vital throughout the entire decision-making process.

7.      Cultural alignment. Delivering against one's promises always means delivering against one's own set of service standards, and this means ensuring the company is fully aligned behind customer needs. More than just internal communications, this is a dynamic process of internal marketing that can help cement the integration process around pre-agreed operating and cultural values. More importantly the merger process can, of itself, be used to engage with staff to reflect and symbolise the emerging entity. Inevitably this takes time and commitment; it also requires communication and inspiration at every stage of the campaign.

To return to my earlier petrochemicals 'success story', one of the many aspects that helped was senior management's commitment not only to the 'softer' side of the process, but also a determination to engage with all levels of staff from the earliest stages.

As part of an internal marketing programme, senior management visited all the new subsidiaries to 'preach their message'. A geographically diverse business, Group board meetings were rotated around all plant locations with management making local presentations on progress. Not only did this help the CEO develop a better idea of the exact type of physical and human assets acquired, it also enabled him to get a good sense of the respective local cultures, as well as enabling staff to see him and his team in action. Importantly it also meant his management team worked together in a moving 'location-neutral' environment.

This was supported by regular briefings in anticipation of the formal re-brand and further communicated through a people-focused marketing campaign that reflected the new corporate positioning, values and service orientation 'in action', which acted as a further energising catalyst for change and motivation.

The benefits were enormous. The merger situation was immediately 'stabilised', based upon a clear statement of intent for the newly created organisation: what it was; what it stood for; where it was going; what made it unique. This helped align the two merged businesses behind one corporate 'cause' and began the process of embedding the agreed vision, mission and values. This not only re-enforced a sense of strong leadership, but also gave a focus to those issues deemed important, which led to faster decision taking and the realisation of initiatives that helped the organisation deliver against its promises. Ultimately this translated into tangible merger benefits and ongoing performance improvements.

Importantly, it enabled management to place brand, marketing and communications thinking right at the heart of the organisation, actively influencing and shaping policy alongside the traditional corporate functions of finance, HR, operations, distribution, and IT.

What was more impressive was that this was achieved by an industrial business-to-business organisation, rather than a consumer-focused one, which in theory should have a more natural affinity towards these type of issues. In that regard, perhaps the improbable mathematical calculation featured at the start of this piece is insufficiently aspirational…

Can 1+1 ever equal 4?

About the author:

David Rowson is Executive Chairman of strategic branding consultancy StrategicFusion. He has over twenty-five years' experience in advertising, communications and brand consulting. Prior to setting up StrategicFusion, David was European MD and founding partner of Luxon Carrà, the international corporate branding consultancy, which was ultimately sold to IPG, the world's largest advertising group and became part of FutureBrand. David's earlier career spanned both branding, design and advertising, having been Executive Director for Landor Associate's European corporate and retail practices.

The Might of Management Development

For many years the belief has persisted that inherent ability and personality were the all-important ingredients for success at work.  But recently this ‘leaders are born, not made' belief has been eclipsed by the growing appreciation of the value of job experience. According to ‘Management Development Works: the evidence', research published by the Chartered Management Institute, the most effective development route for managers in marketing – and other professional disciplines - is via on-the-job learning experiences.

In addition to the technical expertise required to succeed in a marketing career, demand for professional management skills is growing. Most managers responding to the research believe this growth in demand is happening for a number of inter-related reasons. 

Key factors are the need for a more broadly based business knowledge to help marketers meet customer needs and the widening of managerial responsibilities as organisations adopt flatter structures. There is also growing acceptance of the notion that management development needs to be viewed as a continuous process. Indeed, lifelong learning is the only sensible response to today's environment of rapid organisational change, rising consumer demands, the pace of technological change and the impact of globalisation. Yet, of 4.6 million managers in the UK, only 20 per cent have management-related qualifications.

This is one of the reasons why there is growing recognition of the necessity to nurture a culture of learning.  It's particularly important in marketing - an industry which is reliant on understanding wider business issues in order to deliver.  So it's a worry that resignation rates within the sector currently stand at 11.8 per cent (according to the National Management Salary Survey) as the implication is that individuals do not stay around long enough to benefit from on-the-job learning. Continuous professional development (CPD) which allows managers to develop their own competencies and supports their long-term career development is increasingly likely, then, to be embraced by individuals.

But it is still often assumed that CPD is the province of HR teams and that they are the ones responsible for initiation, implementation and follow-up activity. As if to emphasise the point, over the last four years there has been a decline in the amount of line managers involved in implementation – from 30 to 15 per cent. This all too often leads to the perception amongst employees that their development is not regarded as sufficiently important – how can it be if their immediate manager wants little involvement?

The reality is, however, vastly different. Indeed, almost half the organisations questioned in the research now have a written policy on management development and a dedicated budget for it.  And many employers are taking more responsibility at a senior level for employee development.  In 2004, 51 per cent of CEOs or Boards were directly responsible for initiating development policy, compared to 43 per cent in 1996. 

Yet the problem remains that too many organisations conduct this training and development based on the implicit belief that it is beneficial, rather than upon quantifiable evidence. But as anyone in marketing will appreciate, supposition is not enough.  For every activity there has to be a result and this needs to be defined and measurable.  After all, why invest if you are not sure about the return?

Similarly, with CPD, it is a misconception to say that the impact of development activities cannot be measured.  The implication, then, is that rather than invest blindly, you should find a quantifiable indicator linking training and development to both your and your organisation's goals, and use it consistently. And only once you have sufficient long-term data you can truly track results.

It is vital that future leaders in the marketing industry see that their bosses recognise the importance of CPD.  The evidence suggests that organisations are moving in the right direction.  It is fair to say that there is some way to go, but the activity to date shows that CPD does have a clear priority. For example, the survey shows that 61 per cent of HR managers employed a dual focus of internal growth and external recruitment, compared to half that number in 2000.  The message is clear – if you want to build a robust team, recognise that you cannot just buy it.  You need to invest in, and promote the development of, people through CPD.

But it doesn't just have to be focused on evidence or qualification.  Sometimes the most effective learning occurs where there is a culture of managers learning from their colleagues. Much depends on how your organisation defines ‘formal' development, but whatever the answer, the important thing is to make it relevant and to allow yourself the opportunity to benchmark against like-minded organisations. To do this you can do two things. Ensure your CPD is linked to the new national occupational standards for management and leadership ( http://www.management-standards.org)/ ) and identify ways in which you can be formally recognised for the management activities they undertake.

To get true value from CPD you need to have the right questions in place from the start. What do you want to improve? How can you judge, further down the line, whether improvements have been made? If you can answer these questions you will be able to demonstrate that management development and CPD is a valuable investment.

High Performance Thinking Skills

What constitutes success? Does it pay to be smart? The 2005 averaged payments from the annual bonus in a top UK retailer at three levels of management are shown below.  This simple analysis shows just how much more people get paid for the responsibility they take and for how smart they are in gaining and holding down top jobs. Effort and intelligence are rewarded in this successful organisation. 

Are the board on average 1500 times smarter than the shop floor or 90 times smarter than their middle managers? Probably not. Being a bit smarter than other people pays back disproportionately.

Wrong Assumptions

So if being smarter gains bigger rewards you'd expect ‘thinking skills' to be on the top of the agenda for most schools and top of the best selling book lists. They are not. There may be many reasons. One lazy assumption might equate just passing exams with being smart. There are many very smart people who do not have too many paper qualifications. Alternatively perhaps people have made the assumption that smart people ‘are lucky' and ‘are born that way'. 

I recollect the idea of ‘born sales people' being in vogue many years ago until some smart Americans decided selling skills can actually be taught. Fifteen years ago there were very few people teaching creative thinking skills. Now there are rather a lot.  Again in the past the idea that you were born creative prevailed, was eroded and changed. You can learn how to be smarter than you are now . But you will need a plan and you will need to be committed to upgrading how you think and act.

Becoming Smarter

There is no one particular formulae to being smart. Being smart has a lot to do with making the most of what your mind is capable of. Stretch and capacity are very important too. However alert self-awareness is at the very top of the list. Without self-awareness and the ability to reflect you'll never learn important lessons about yourself. Another very important area to look at in working smarter is in the field of relationships.  The five top board members in our example could not have generated their own rewards without the best efforts of 150,000 other people. So work on relationship skills.

Personal Upgrade -Frames

Where would you begin to upgrade your beliefs, thinking-skills and behaviours in order to begin to be smart? Know thyself and then conquer. To get the best out of a relationship with yourself and with other people one of the central models you need to understand is ‘a frame of reference'.  This is quite simply the unique world we build up around us. 

Illustration copyright owned by Stephen Reid 2006

This frame of reference is ‘the box' – the one everyone wants to think outside of, when faced with a demand for new ideas! 

Changing Contexts

Frames are great when they are true. Marketeers, agency staff and management might get paid lots of money for the quick or well considered decisions they generate from well stocked educated individual and collective frame of reference. Things can change though. Worlds can be tipped upside down. Take a factory worker who wins millions on the lottery as an example.  In many cases they have said they intend to return to work the following week. Their world has changed but their working assumptions haven't yet been adjusted.

Early Warning Signs to Change

Frames work well when all is going to plan. Often this is because the frame of reference fits the prevailing context. When the context shifts people often fail to catch up or fail to change their working assumptions. People will often think that all they need to do is just work harder using the old plan or existing behaviours. That ends up in frustration or worse. You'll need to think smartly and change.

Blind Spots

Companies and individuals can suffer from this sort of blind spot. One way out of this is to keep an open mind, to keep challenging the status quo and in being receptive to feint dissenting signals. When the signals are loud enough it is often too late to change. Again if the proposed answer is always to ‘work harder' then you are probably missing something very important.

Keep Learning

Constant self-development and self-awareness are important requirements of staying at the top of your game, especially in the fast moving world of marketing and communications. You cannot stop. If you stop learning you are doomed. If you are still learning but those around you are not then they will drag you down when the context changes. 

Keep Very Good Company.

Very, very few individuals can achieve great things in isolation. The majority of smart people keep smart company. And smart people never stop learning and never stop asking the interesting question.

Get a Plan of Personal Upgrades

If you haven't yet got a continuing personnel development plan that you believe in and are committed to, now is a good time to start thinking about how you will begin to work in smarter ways. Start by getting to know yourself better and by being generally more self-aware. Once you embark upon this path you will eventually encounter dilemmas but that's a subject for another day.

© Stephen Reid November 2006

Stephen Reid has recently published his second book High Performance Thinking Skills (Oct 2006) ISBN 9780 955 270000

The book has been widely endorsed and reached WH Smiths top ten business book sales at airports and railways in only six weeks. It contains 82 short modules packed with tips and practical suggestions. 

CPD and the need to measure marketing performance

Continuous professional development (CPD) encourages the renewal of old knowledge and the development of new ideas. The principles of marketing are not new, but new applications and ideas, are always arising to meet new challenges in the market place.  The application of new technology and legal developments provide a major part of marketers CPD. However, while many marketers recognise the need for measuring marketing performance as essential for effective marketing management, it is an area of CPD that is generally unfulfilled.

Many marketers say that marketing is more an art than a science, and therefore does not lend itself to meaningful measurement of performance. Yet the increasing use of customer relationship management software has shown that marketers are seeing the need to demonstrate the performance of the marketing function and a quantifiable return on the financial investment.

The first questions asked by marketers are often what should be measured? How can it be measured and what software is available? Yet these questions put the “cart before the horse”. The first questions should always be; “What do we need to know?” Who needs to know? Why? These three questions will have different answers at the various management levels of the marketing structure. Different additional questions will be asked according to what information is required by whom, for what purpose and in what form the answers are required.

The questions should start from the top of the organisation. What information does the Chief Executive need to know about the performance of the marketing function and what specific management data and metrics are required for analysis and decision making. For the Marketing Director, there will be a different and more extensive range of data as would be required by one directly involved in managing the marketing budget.

Each management decision making level will have a set of reporting data to monitor and manage their responsibilities. As each level collects data for its own management control and decision making, as well as for passing to the level above, so it becomes possible to establish an information data chain that extends from the lowest point, e.g. the customer and sales interchange to the Chief Executive. Through this chain of information data, the Chief Executive should be able to trace the connections from a marketing metric through to the causal area or actions.

Senior executives will be interested in metrics and benchmarks rather than pure measurements. This is because Metrics are the standards for measurement, providing target values that a company must achieve to reach a certain level of success. Measurements are the raw outcome of a quantification process, such as numbers, ratios and percentages. Benchmarks, however, are the very best measurements to which to aspire, the standard by which all others are measured. In most cases, Benchmarks are therefore used to establish the value of metrics to be used for measuring satisfactory performance, at any particular time.

All Marketing requires investment, so the effectiveness of marketing management must be clearly demonstrable to senior management, to further the internal understanding of the business's marketing effort and justify the investment. At Board level, metrics are the most useful form of information to be collected. From a Marketing perspective, metrics of Marketing Contribution, Return on Marketing Investment and the Optimum Marketing Performance, will provide a performance picture of the marketing function which may be compared to the metrics of the other “Business doing,” and Finance areas of the business. The question of “In what form” information is reported, is important to ensure information and data is prepared in a manner intelligible to the demander and comparable with data from other sources.

Measuring marketing performance benefits marketers by allowing the individual to prove their worth by measured results. Performance measurement should be seen as a tool of management efficiency by which all performance may be judged and rewarded.

Part of the problem with marketing management is that while it has used numerical data, this has often been limited to specific areas such as sales and product management and advertising. The requirement now is for reporting information that provides an integrated, intelligible and complete picture of the management performance of the marketing function as a whole as well as the return on the investment involved.

Having decided what needs to be known by whom and why, identifying which marketing activities have to be measured is the next problem. Can the subject be measured accurately and how frequently should it be measured? Whatever activity is chosen, inputs or outputs are the only useful measures. This is why advertising measurements are problematic. The investment in an advertising campaign is easy to establish. However, establishing the level of resultant sales is imprecise owing to a number of additional factors such as selling activity and the accumulated effects of previous advertising and sales campaigns.

Marketing measurement identifies what works and what doesn't within the organisation. Having extracted selected marketing measurements the next questions must be: Is the result useful? What does it tell us? Only information that actually assists in understanding and managing the marketing process should be used.

Ultimately, if you don't measure marketing performance, there is no way you can demonstrably improve marketing efficiency, effectiveness or return on investment.

For those seeking CPD on the subject, The Chartered Institute of Marketing provide one and two-day courses on Measuring Marketing Performance, while Contract Marketing Service, specialists in measuring Marketing Performance and Return on Marketing Investment, provides half and full day seminars on the subject.

© N.C.Watkis 22 November 2006

Contract Marketing Service are specialists in measuring marketing performance and return on marketing investment

http://www.contractmarketingservice.com/

http://www.businessperformancemaximized.com/

The power of partnership

“People can be divided into three groups: those who make things happen, those who watch things happen, and those who ask ‘what happened?'.”  

It's a great quote. Which group do you, your brand and your business fit into? The global economy means unprecedented pace. Competition is full on – 24 X 7. Organisational and geographic boundaries are shifting and blurring - even becoming permeable. Your brand and business could be impacted by changes happening on the other side of the world – possibly while you're sleeping.

Savvy marketers are seeing this as an opportunity rather than a threat. Companies are looking to reinvent themselves recognising the ‘survival of the fittest' ethos. And that strength comes not from facing the competition alone but by building sustainable partnerships and alliances.

Take the recently announced North American Coffee Partnership between Pepsi-Cola and Starbucks as an example. Rather than worry about whether a consumer might choose a cold can over a hot coffee - or vice versa - the two are focused on growth and opportunities. Giants in their own right, the two have got together to create a new segment in the ready-to-drink coffee category – worth more than $800 million in the US alone.

Do CEOs view getting into bed with the competition as a weakness? Quite the opposite. A recent study1 - based on interviews with more than 750 of the world's top CEOs - reveals interesting insights as to how business leaders view partnerships, particularly as regards innovation. More than three-quarters of these CEOs ranked 'business partner' and 'customer collaboration' as top sources for new ideas. One CEO said: “On a scale of one to five, collaboration's importance is enormous. I'd give this a six if I could.”

The findings show that CEOs are also looking beyond new products and services. They are increasingly focused on innovation in their business models and operations as key mechanisms for driving change. In the past, innovation may have been seen as something that had to be kept ‘inside' behind closed doors. Now, working closely with ‘outsiders', both customers and partners, is seen as indispensable.

Traditional market research is already rethinking its role to ensure it is not left behind by merely focusing on previous consumption patterns. Forward-looking companies are reaching out to other organisations. Brands are leveraging their collective power. Companies that can bring ideas to a shared table and can work successfully with others to go to market are the ones that will succeed. And the ideas or brands do not need to come from the same market sector.

Sport and music are not obvious bed fellows. Yet they were brought together like never before with the Nike and Apple® announcement earlier this year.

The first innovative Nike+iPod from this new partnership is a wireless system that allows Nike+ footwear to talk with your iPod® nano to connect you to what is claimed as “the ultimate personal running and workout experience”. Information on time, distance, calories burned and pace is stored on your iPod and displayed on the screen; real-time audible feedback also is provided through headphones. The idea is that it's like having your own personal coach or training partner to motivate every step of your workout.

What was also interesting from the recent CEO survey was the confirmation that collaboration makes businesses more successful. Out performers used external sources 30 per cent more than underperformers. This view was corroborated by management consultants AT Kearney2. Their research showed that companies who demonstrate excellence in partnering can out-perform the stock market average for their sector by a margin of up to 40 per cent. Clearly such an advantage is one no marketing manager can afford to ignore.

BT, the UK tele-communications operator, and HP, the US information technology company, are examples of companies who could not ignore the opportunity. In 2004 the two companies got together to develop a strategic go-to-market alliance to address mutual growth opportunities in the global information and communications technology (ICT) marketplace.

Although the partnership has been beset by both companies' legacy issues, it is more than just big corporate smiles and PR opportunity handshakes. It is enjoying some success. For example, the alliance announced a European IT and networking services contract with Hertz Europe recently. And the latest contract is with Aker Kvaerner, a global provider of engineering and construction services. HP and BT have been selected to supply an agile environment for IT and communications. The contract is said to be worth $50 million over five years.

One way to avoid the legacy issues of the two partner businesses is to create a separate fresh entity for the partnership. Ocado did this when they launched an on-line grocery business in partnership with Waitrose in January 2002. The business model is entirely different - unlike other supermarkets, the goods delivered from Ocado come direct from dedicated distribution warehouses rather than supermarket shelves, avoiding double-handling. Strong distinctive branding and advertising are differentiating the service at the front line, too.

Automobile manufacturer Mercedes and Swatch, a watch company, also set up Micro Compact Car AG as a separate business when they collaborated to produce the Smart car. The new organisation had very different ideas and approaches to product development from either Mercedes or Swatch. The car was launched in October 1998 – though this also marked the end of the joint venture as Swatch sold its interest to Daimler-Benz shortly before the Chrysler merger.

Partnerships could also mean approaching distribution outlets in a different way. Costa Coffee, for example, is in direct competition with the likes of Starbucks and Cafe Nero in many a UK high street. The chain has looked to differentiate itself by collaborating with other retailers such as Abbey National, WHSmith and Ottakar's book stores. The lure of warm beverages and the opportunity for customers to bank or browse at a more leisurely pace is delivering mutual benefits.

Bringing together products and brands can create whole new sectors – shampoo and conditioner in one bottle created the ‘two in one' sector in the hair care market. But this is an obvious connection. Innovation expert Paul Sloane3 recommends marketers look for weird combinations to spark creativity. And ‘weird combinations' means going far and wide – looking beyond any boundaries. Even the competition. Think of the Pepsi-Cola and Starbucks alliance. How could your brand work with what is today a competitor but tomorrow could be your partner?

Thinking beyond boundaries and seeking out partnership opportunities will make sure the competition doesn't catching you napping - and ensure you are not the one to ask; ‘What happened?'.

Ends

1 The IBM Global CEO Study 2006

[link to www. ibm .com/services/us/bcs/html/bcs_ ceo study2006.html ]

2 The Partnering Imperative by Anne Deering and Anne Murphy, AT Kearney [link to http://www.atkearney.com/ ]

3 PaulSloane is the author of The Leader's Guide to Lateral Thinking Skills [link to http://www.destination-innovation.com/ ]

About the author

Amanda Crouch is the chief executive of the Global Business Partnership Alliance (GBPA). GBPA is the leading corporate membership organisation focused on internal and inter-company collaboration and business partnering.

http://www.gbpalliance.com/

How much money are you wasting on search engines?

For me, applying digital technology for marketing has dramatically increased the challenge of keeping up-to-date about new marketing concepts and techniques. This is particularly the case with marketing through search engines. If you don't know the latest techniques and success factors, it becomes difficult to select the best agency or internal staff to complete this crucial work or to ask the agency those ‘searching questions' which will prompt them to work smarter for you.

It's certainly important to get search engine marketing right since search engines are a daily part of most people's lives – witness the latest Comscore data for top sites in the UK ( http://www.comscore.com/press/release.asp?press=1081 ) which shows 25 million unique 15+ users in the UK for Google and Microsoft sites. Another report, shows the UK ahead of the US, France and Germany in terms of number of searches per month per user – surprisingly low at around 50 searches per month.

In this article, we will take a look at recent developments with using paid search marketing through sponsored links in the major search engine networks such as Google AdWords, Yahoo! Search Marketing and Microsoft adCenter. I will highlight how potentially, large sums of money can be squandered if your paid search marketing campaign are not optimised. Some companies are spending hundreds of thousands or even millions of pounds per month with the search ad networks, so if campaigns aren't optimised, a satisfactory return on investment can be difficult to achieve in competitive markets.

The concepts and success factors I describe are taken from a recent 250 page Best Practice Guide of recommendations on paid search I have written for E-consultancy. The length of this guide shows the specialist knowledge required to run online ad campaigns effectively.

It is important for marketers to discuss these factors with agencies since many agencies are still paid a management fee on percentage of media spend rather than a paid-for-performance models. This means there may be little incentive for those working on paid search to increase performance since the more they spend, the more money they receive.

I will cover different potential ways in which ad budget can be squandered by reviewing the “Dos and Don'ts” for search engine marketing – but with the emphasis on the Ten “Don'ts” that you should avoid. Here they are.

1. Don't forget the Quality Score .

Marketers who are not actively involved in search engine marketing may believe it's simply a case of the highest bidder on a search term buying their way to the top of the listings. This has never been the case with Google, and it has recently become more complex.

Google Adwords uses a hidden ‘Quality Score' to assess the quality of an ad which according to Google is based on “ your keyword's clickthrough rate (CTR) [the main factor used for some time], relevance of your ad text, historical keyword performance, and other relevancy factors ”.

Other relevancy factors are likely to include the bounce rate of the landing page and the amount of content on the destination site, so pages that don't engage well relative to competitors will rate less highly or will at least have a higher minimum bid for each search term.

Google was once alone in offering a quality or relevance-based approach to paid search ads, but in mid 2006 Microsoft launched its adCenter service offering paid search on what is now Microsoft Live Search this also uses a quality-score based principle. Likewise, Yahoo! Search Marketing has a new system, codenamed Panama in test which will launch in 2007.

So now, for each the three major search ad networks, it is important to understand the principles of the quality score which affect relevance and work hard to improve results from these.

Let's now look at some of the ‘Don'ts' of paid search marketing which stem from the Quality Score.

2. Don't forget the importance of Campaign Structure .

Campaign structure refers to the way in which your keywords are grouped within the paid search advertising account to define the appropriate ad creative to be displayed when these terms are searched for.

If the campaign is poorly structured, relevance will be low, so your clickthrough rate will be low and your price bid will have to be high compared to competitors to get the listing position you need.

Campaign structure is vitally important since it determines how closely you can target your paid search activities. If you have many diverse keywords for an ad you will be less able to deliver relevance. For example, if you are a phone retailer, it doesn't make sense to serve the same ad regardless which phone model the searcher is looking for, instead you need specific Ad Groups in Google that give a different message according to the product or service sought and the qualifier used to narrow down the search.

If you have tens or even hundreds of keywords in each Ad Group, you are almost certainly providing less targeted ads than the supplier who has more Ad Groups each containing a smaller number of words.

3. Don't forget the importance of Ad copy .

This can only be described as a ‘no-brainer' – the more relevant your ads, the higher clickthrough rate you will receive, so boosting your clickthrough rate and increasing your position at the same cost or if you prefer reducing the cost-per click and maintaining the same position.

But you will only receive these benefits if you, internal search resource or the agency put the effort into continually experiment with ad copy and message. I find this doesn't happen if the client is asking the right searching questions. Google has great tools for tweaking and tracking ad copy, so they should be used.

4. Don't forget the Landing pages.

It used to be that the paid search networks didn't really care what happened after they have generated revenue from the user clicking on the ad. Today they do, with Google even sending out a robot to examine landing pages and sites for relevance. These are similar to the robots used in natural search to assess landing pages. They are looking for substantial sites with useful relevant content. If you have simple landing pages which are image based and don't suggest relevance, then Google will effectively penalise you by increasingly the minimum cost per click for your ad to display.

So, those are the main factors related to quality score. Let's now look at some other methods to waste money!

5. Not completing in-depth Keyword or Keyphrase research

In-depth keyphrase analysis is important to identify a wide range of phrases which your audience are using to find information related to your product, services and content.

But it is time consuming to perform keyphrase analysis. It requires a lot of time upfront and an ongoing effort to expand your keyword list.

But keyphrase analysis is at the core of setting targets, implementing and reviewing search engine marketing.

I know some companies in a sector who have hundreds of keyphrases, while others have thousands or tens-of-thousands. The more keywords you identify, the more scope you have for targeting the keyphrases that are performing better, which are often lower volume, more complex phrases for which searchers have greater propensity to convert.

Detailed keyphrase analysis and selection enables you to:

• Review possible phrases which will enable you to connect with potential customers as they search for products, content or experiences.
• Select keyphrases which indicate intent on the part of your audience which helps qualify your audience and decide which phrases you should prioritise on.
• Set goals for returns on SEM based on the number of relevant searches and the cost of achieving results.
• Select search engine marketing strategy for achieving results for each keyphrase – which combination of SEO, paid-search and affiliate marketing will work best?
• Review progress against these goals.

6. Not treating the Content Network differently

The content network of third party sites, on which your ads can potentially be displayed entirely separate from the search engine itself, is, in my view, the biggest hidden secret in paid search marketing.

Google gets around 40% of its revenue, not from searches on its own site, but displaying contextual ads on other sites or searches linked from other sites. These ads are displayed as part of the Google AdSense programme that advertisers can subscribe to. For example, if you navigate to www.davechaffey.com/Total-E-mail-Marketing , you will see ads about E-mail Marketing since Google has detected what this page is about and it then displays relevant ads since it is more likely to get clicks and so revenue if the ads match the content.

My main message in this section is ‘beware the content network'. Ignoring it will often lead to poor ROI since searchers often click impulsively on such ads as part of browsing sites, rather than when they are proactively searching within the search engine. Clickthrough rates and conversion rates tend to be much lower on these types of ads. However, the content network is useful for using other sites to extend reach on keyphrases which are limited by the number of people searching upon them.

7. Not using the Keyword Matching options for targeting

Keyword matching is an important targeting technique within paid search since it gives you precise control of which ad you display for the combination of keywords entered by searcher. We say ‘can give precise control', because all the search engine networks have default broad keyword matching options which are designed to save time for those managing campaigns.

Keyword matching is performed according to different match types specified by the advertisers. These are rules defined by the search networks for controlling when advertisers ads are displayed dependent upon the search term entered by the search engine users.

The three main match types are:

·                Broad matching where the ad will be displayed if the keyword or related terms are searched upon. Example: for an ad keyword: “plasma tv” the ad may also be displayed if the search term “plasma television” is entered.

·                More precise matching known within Google as Exact match (Example: ad only displays if the precise phrase “plasma tv” is entered and Phrase match (Example: ad displays if the precise phrase “plasma tv” plus any other words is entered).

·                Negative matching  where the ad will not be displayed if the searcher includes a specific word (Example: ad won't display for “cheap plasma tv” if “cheap” has been entered as a negative keyword).

Negative matching is particularly useful for increasing clickthrough rates on a keyword by ensuring your ad is not displayed for irrelevant ads.

8. Not Micro-managing search listing positions .

The top position, if you can achieve it through boosting your quality score, is not necessarily the best position in terms of conversion rates and so return on investment. Sometimes, the best combination of conversion rates and bid price maybe in lower positions where searchers seek out an offer that appeals to them.

Dayparting is another relatively sophisticated keyword position approach typically used by larger advertisers. Improving ROI through varying bidding strategies during different hours of the day consistent with consumers use of search engines and their purchase behaviour. Positions based by boost when conversion rates are higher or they may be reduced when they are lower.

9. Don't treat Search as a silo .

Although many search engine marketing companies now exist since it is a specialist discipline, this does not mean that searching happens in a vacuum. Prospects search as part of a wider journey which often involves their being exposed to other online promotion techniques like affiliate marketing and display advertising. And, of course, most of us still spend a lot more time in the real world compared to the virtual word meaning that PR, print and TV advertising and direct mail will also have an influence. So it is important to research the impact of these multiple touch points.

10. Don't forget to Track the right thing for your business .

I've left the most obvious one to last, but obvious most doesn't mean the easiest. Many companies can refine their tracking and its not a one-off activity. It is vital and obvious for retail businesses to track, to sale, to assess the conversion rates, cost of acquisition and profitability of new customers. But how do these vary for different types of keyword which vary for a customer as they search repeatedly, dayparts and different styles of search?

For other types of business which don't transact online, it is necessary to review marketing outcomes or events. It is a question of identifying value pages which indicate engagement with a brand, e.g. registration, forum view or post, product pages, repeat visits and attributing a score to them – effectively every page or visit has some value.

About the author

Dr Dave Chaffey is workshop leader for a range of one-day e-marketing training workshops from The Chartered Institute of Marketing:

• E-mail Marketing ( www.cim.co.uk/0766 )
• Running Effective E-marketing Campaigns ( www.cim.co.uk/0767 )
• Improving Your Results from Digital Marketing ( www.cim.co.uk/1138 )
• Marketing Research Using the Internet ( www.cim.co.uk/1135 )

Go to http://www.cimtraining.com/ for course details and online booking.

Dave Chaffey is trainer and consultant for Marketing Insights Limited ( http://www.marketing-online.co.uk/ ). He is a prolific e-business author whose books include ‘ Total E-mail Marketing ', ‘ Internet marketing: Strategy, Implementation and Practice ' and E-business and E-commerce Management .

the marketer

the marketer, published 11 times each year, is the award-winning magazine read by members of The Chartered Institute of Marketing. Members receive 11 issues each year, completely free of charge.

Susan Lintell is Market Development Manager at the Alex Picot group, comprising Alex Picot Chartered Accountants and Alex Picot Trust Company Ltd. Founded in the 1890s, they are the oldest firm of chartered accountants in the Channel Islands.

A Chartered Marketer, Susan has been a member of The Chartered Institute of Marketing for nearly eight years. Being the first Market Development Manager at Alex Picot group is a challenging role, and Susan certainly appreciates her CIM background. “I became a member of The Chartered Institute of Marketing because I wanted to be able to add the qualification to my CV, and to learn more about my profession.” Susan's belief was well founded. “My qualifications definitely helped me to clinch my new role.”

Susan says that the post graduate qualification and CIM membership has given her added confidence, and underpinned her practical experience. “Having worked in the profession for some time I had marketing experience, but studying with The Institute helped me to understand the theories and their practical applications which lie at the heart of marketing. This knowledge has enabled me to make the most effective use

of the marketing budget – whatever its size. Membership of The Chartered Institute of Marketing is also a great networking opportunity and I now have a wide circle of experienced practitioners with whom I can discuss issues and share challenges.” 

Susan's main task at Alex Picot group is business development which includes

launching and managing a new visual identity. It will apply across the group and define the relationship of each company within the group. The image of the business will be in sharper focus, with a fresh identity that relates 21st century skills to the established core values of friendly and professional service. This will be accompanied by revised literature and a new interactive website with the same fresh look. The revised image will help the group identify with clients, both worldwide and locally, to develop new business and to grow.

“I will be working on recruiting new customers, as part of a comprehensive business development plan and thanks to CIM I know the importance of looking after our existing customers too!”

Susan is keen to share the knowledge she gained with The Institute. “I really enjoy being in a position to help others understand more about marketing. My own teachers were excellent, and I very much hope that I am helping to spread their wisdom.”