Marketing spoke with Professor Andrew Stephen about the future of marketing, and how technology can be harnessed to usher in an era of marketing with purpose.

Professor Andrew Stephen is L’Oreal Professor of Marketing at Oxford. He delivered a lecture on the future of marketing in an increasingly convergent world at the Centre for Business Analytics event at Melbourne Business School on 20 October.

Marketing caught up with Professor Stephen to learn about his four component framework for purposeful, responsible marketing, brands using tech in innovative new ways, and the moving target technology presents, and how marketers must build on technological skill sets to remain agile and grapple with the ever-changing landscape.

 

Marketing: How do you define marketing with purpose, and what is the basis for your four-component framework?

AS: It’s really about using technology and using all the tools that marketers now have at their disposal, particularly in digital contexts and digital channels, to do better marketing. I talked about some statistics around how consumers feel about digital advertising, and the rise of people using ad-blocking software.

The numbers were pretty clear. It was an industry study. About two-thirds of people who use ad blocking gave the reason ‘because ads are annoying.’

I think only 8% of people said they have an ideological opposition to advertising, so it’s not that people think advertising is bad or evil. It’s rather that a lot of the advertising that people are getting exposed to on websites and in apps just isn’t good.

It’s maybe mis-targeted, or low quality, it might not be informative enough, it might not be interesting, or it could just be distracting and irritating.

Marketers have a responsibility, and maybe aren’t really living up to it. If we’re going to intervene in people’s daily lives with messages and communications, then we need to do a better job. The future of marketing needs to take this into account within the technology enabled, data-driven marketing world in which marketers are operating.

In that context, purposeful marketing is really about using technology and data in ways that enable marketers to do a better job, and to serve customers and other stakeholders in a better way.

I laid out four components of this, the first one was, before anything else, you need to address business needs. 

If you’re not doing that, then you’re not going to keep the lights on. It’s great to have greater purpose, and it’s great to think about creating customer value and making people happy, but, unless there’s a good business model that is profitable and sustainable, then there’s really not much point.

Marketing’s maybe moved away from that, it’s almost in some respects seen as inappropriate to talk about the business needs when we want to think about customers, but business is business.

The second aspect – before you think about customers – is the people inside the organisation. Employees, as well as other stakeholders that are part of the marketing process. That might be suppliers and vendors, it could be other people in your distribution channel, retailers. Other parties who are there to help you go to market, and to be in the market place.

That’s also a forgotten part. A lot of conversations I’ve had with chief marketing officers recently, they’ve sounded more like I’m talking to HR directors, than talking to a marketing person. The issues that they’re talking about are fundamentally internal people issues, oftentimes about the need for upskilling, the need for helping people adapt their skill sets to a data-driven digital marketing age.

This is what is on the top of the mind for the CMO these days. There’s plenty of things on the top of mind for a CMO, but I think the people aspect is an increasingly important one.

If we’re thinking about doing marketing with purpose, we have to think about our people within the organisation, and how we can make them better marketers, and more adept at dealing with the complexities of things like data and analytics, and helping people who don’t necessarily have that background learn some skills so they have some appreciation and understanding for things like analytics.

 The third part is customers. There’s obviously been a big theme recently where marketers talk a lot about customer-centricity.

We can now have a more single view of the customer, but it’s still not fundamentally about putting the customer at the heart of our thinking, because you’re still narrowly thinking about the customer only when they’re interacting with you or your brand – your channels, your advertising, whatever else.

Marketers forget that customers have lives. They’re real people. Whether it’s B2B or B2C, there’s a broader context in which we need to think about customer-centricity. The products and services that on offer. How they actually play a role in that persons life. Realising that it’s not always about the product and brand, it’s about how you fit in with whatever that person’s trying to do in their lives.

That more holistic view of the customer as a human – as opposed to this atomic unit of a customer that is a record in a database – is really important.

But actually, the analytics revolution in marketing has perhaps made marketers move away from thinking about customers more holistically and broadly, instead to think of them in that more narrow sense. That’s a mistake. We’ve seen lots of examples of customers turning away from big brands. Turning away from big multi-nationals and consumer packaged goods and going to small local things. Part of that is because, I think, there’s a more authentic and sincere relationship that they can then have with those brands, or those retailers.

You have to actually create something meaningful and purposeful in the eyes of the customer as opposed to just seeing the customer as a source of revenue.

 

M: And the final part?

AS: The final part, is when we think about business purpose, probably the more immediate thing we think about is societal contribution. ‘what good is marketing doing more broadly for the world?’

Marketing can be used in so many different ways to be a positive change agent, but again, if we don’t think more broadly, and we don’t think more purposefully, then we forget about that extension. It’s not about corporate social responsibility just for the sake of it. It needs to be done in a manner where there’s actually a good business model behind it.

To use an example, in the US, the business model of old legacy publishing companies, lots of newspapers and magazines, and maybe local radio and tv broadcasters as well, is under attack. It has been for some time.

There’s still a need for, particularly in the newspaper business, great local and regional level quality journalism. In the United States, there’s the national level of the market, that I wouldn’t say is doing well, but is keeping its head above water for the time being. The New York Times, Wall Street Journal, Washington Post those sorts of publications.

That tier beneath them is disappearing. Think about societal purpose. That’s a big problem. People need to know what’s happening in their part of the world, or their city, or their neighbourhood, not just what’s happening on the national or global stage.

And so, to the point about creating business models that help achieve societal purpose but also make good business sense, about four of these large media owning companies said ‘It’s really, really expensive to do what we do, so we need to cut costs, or we’re going to disappear.We’re going to pool all our advertising inventory, and create a new company that sells all of that inventory.’

That’s then better for advertisers, because you’ve got a one-stop shop where you can do a media buy across a bunch of different publications, media outlets , websites and TV all at once. So, it’s more efficient for the marketer, it’s more efficient on the ad sales side. They’re shifting the cost, and reducing that cost, and then the profitability of that new business model then goes back into funding quality journalism at that local and regional level which has otherwise been disappearing.

It’s creating a business model that helps achieve societal purpose, but it’s also good for business, and you have that beautiful win-win situation.

It’s not just about CSR, or doing eco-friendly things, or reducing carbon footprints, it’s actually about saying ‘here is a problem that’s bad for the public, how can we create a business model that will help us fix that problem?’

They’re the four components of marketing with purpose in a heavily technology-driven world. Addressing business needs, people needs, customer needs and societal needs. The context here is really thinking about how technology can be used in smart ways and purposeful ways, as opposed to just using technology for the sake of it, which is often what happens.

Marketers get really excited about the shiny new toys: ‘we can now do this, or we can now do that,’ and that’s great, but it’s problematic if you don’t think about how it fits into the bigger picture.

 

M: What are some examples, from your opinion, of some brands or major players who are using tech in some really smart ways around the world?

AS: One actually is related to the ‘people’ component. If you think about marketing technology, and think about how marketers approach their job at any level now, there’s a lot more data. There’s a lot more information. There’s a lot more options, tools and software platforms to think about, which is pretty overwhelming. Some large companies are addressing this by saying ‘we need to equip our people with better skills for dealing with this marketing technology world.’

A really good example is L’Oreal This is one of the major advertisers in the world in terms of ad spend. They’re great at branding, fantastic at how to use traditional media to build and expand and sustain those brands, and launch products. Great at TV and print. But not as great, historically, at digital.

New digital channels keep coming out, particularly in social media space, which just aren’t part of their global marketing core competence. So, what they’ve said is ‘OK, we’ve just got to train our people. We’re going to deploy a lot of different training tools, techniques and diagnostics’. It’s almost like taking a test. Their marketers can self-assess themselves in terms of their skill levels, and go and seek more bespoke training and professional development options within the organisation.

It’s a smart way to use technology to help make their marketers more data driven, and more tech savvy. They realise then, if they know that, they can do a better job of delivering on other needs that their customers would have.

That’s one example.

Another one that is pretty cool, pertaining to the customer aspect is – not meaning to stick within the cosmetics industry – an example from Nivea. They did some work in Brazil with their ad agency where they had this research for sunscreen products. They had a piece of research that basically showed how parents were really struggling with trying to get their kids to wear sunscreen, particularly little kids.

It was a problem, because you want people to wear sunscreen. It’s important to teach kids at an early age that this is part of the routine. They were struggling with this. What they came up with, which was a great use of technology as well as a great customer insight, was a doll that parents could buy  bundled with the Nivea sunscreen kids product. They could give the doll to the kids to distract them while they’re putting on the sunscreen. The cool thing was, is the doll had a coating on it. This is technology, but not digital technology. It had a coating on it that was photo-sensitive. When the doll was exposed to the sun it would get sunburnt. It would go red. The only way to stop it from going red was to put sunscreen on the doll. It was a clever and cute way of teaching three-year-olds about the consequences of not wearing sunscreen. Then, if you do put sunscreen on, what’s the positive consequence of that?

A use of a different type of technology, a materials technology, to solve a customer need, to really address a problem that a customer has, to do it in a way that also delivers an educational benefit. It’s not just ‘you buy this product to do a certain job’, you’re buying this product to solve a problem, and it’s helping you in a broader way.

 

M: You’ve been studying marketing since the late 90s, what’s the biggest change you’ve seen, and what do you think it’ll be moving forward?

AS: I would say technology, unsurprisingly. That means a lot of different things. To be specific, the biggest change that I’ve seen in the marketing space over the last decade has been the shift to being ‘always on and constantly connected’. That’s heavily enabled by smartphones, and mobile internet connectivity. It’s not just that, it’s then what we can do with our smartphones. We carry around these little computers in our pockets, and they’re always connected to the internet. That’s the hardware and the infrastructure, but without uses for all of that, it’s kind of pointless. It’s transformed the way that we communicate, so as people, it’s enabled us to do things that we wouldn’t have otherwise behaved. Maybe for worse, in some cases, but I think it’s a net positive.

It opens up all these new possibilities for how marketers can interact and engage with customers in the right place and the right time. That has the potential to be very valuable.

Also, it means we’ve had this massive revolution in the amount of data that we’re now able to get on customers. It’s not about using data and analytics to sell more stuff, it’s really about – for the first time – having the ability to more deeply understand what people do, and why they do it. That’s led to a lot of improvements in the sophistication of marketing as a practice.

The concern with that, and thinking about what’s next, is that we don’t use all of that potential. Data is one perfect example. Just because you are now collecting tons of data on customers and digital advertising metrics, and you name it, you’re getting a lot more data that can be used, doesn’t mean marketers are using it.

That’s the real problem. On the one hand, it’s kind of just leaving money on the table. Literally and figuratively. Its also highlighting the fact that the technology world, and the capabilities that technology bring to the table has advanced at a pace that’s been more rapid than what the typical marketer has been able to do. That’s problematic.

If we think about where this is headed in the future, I think marketing is always going to be this art and science. A combination of creativity and instinct combined with numbers and data and data-driven decision making. It’s not a question of what’s the right balance, it’s ensuring that the marketers of the future are really equipped to use all of this information, all of the data that’s getting generated, so they can identify great market opportunities, they can deliver more value to customers and various stakeholders.

The future is going to be continually technology-driven, and data-driven, but for the profession of marketing, the future is really thinking about ‘how do we do marketing with purpose?’ How do we use the resources we have in smart ways, to enable us to do that?

The biggest challenge is going to be making sure that current marketers, as well as marketers that are at university now, or at high school now, who are one day going to be in a marketing job. They need to be very data savvy. They need to know their way around analytics. I don’t think we’re there yet.

 

M: As soon as a large portion of the industry is up to date on a particular technology, then another will come along to catch up on.

AS: Yes, it’s a moving target and that doesn’t make things any easier. What you can do, and certainly this is what we tell our students at Oxford in the MBA program, ‘we’re not teaching you how to do one particular thing, we’re teaching you a way to think about approaching that problem.’

Therefore, the marketer becomes a bit more of a problem solver. I do a lot of research into how marketers should use social media, for example. There’s always some new social media platform on the horizon. Three years ago no-one would have taken you seriously if you talked about ‘what’s your marketing strategy for Snapchat?’

Now, every brand is taking that very seriously and investing resources in it. That’s great, but how you approach that, should it necessarily be in terms of the way you go about experimenting and learning what’s going to work and what’s not, shouldn’t be any different to how you would have done that with respect to Facebook or Twitter or Instagram or any other platform that came before it, if you have a process in place.

If you see it as a new opportunity, one that needs to be cracked and figured out, that’s the role of a business school, when we’re trying to future proof our students for careers in marketing, it’s more about giving them problem-solving abilities. Yes they need to learn certain tools and techniques, but it’s more about grappling with the uncertainty of the future when something new comes along. When the CMO walks into your office on Monday morning and says ‘hey, we need to figure out Snapchat’. You need a process in place for doing that.

As a professor, that’s the way I think about this from an education standpoint. The moving target is the reality and that’s not going to change. Instead of telling people how to hit the particular target that keeps changing, we can teach them how to figure out where the target is and how to grapple with that.