Where’s the money?
Raja Rajamannar, global CMO of Mastercard and the current president of the World Federation of Advertisers, tells his team that advertising is dead. The comment is designed to get the crew thinking. He’s only half joking.
Six years ago, Mastercard decided to not rely on advertising as its main pathway to consumers. Now it’s about experiences. Experiential.
“Storytelling is dead, advertising is dead. It’s all about story making,” says Rajamannar. “If I have to fast forward 10 years, the marketing and advertising mix is going to be completely different. Experiences will be predominant.”
He’s shifted a lot of budget from traditional advertising to experiences. An example is the Priceless Cities campaign which has run a series of experiences, including recreating famous restaurants, for cardholders.
Many speak of a reduced flow of dollars to traditional advertising. And the latest analysis from Gartner shows that marketing budgets overall are shrinking, just a bit, at least in North America and the UK.
In Australia, the flow of dollars to media agencies has been weaker over the last year, with a sharp fall in advertising spend by banks and car companies.
The money is still out there and marketers are still spending, albeit at a reduced rate, but their focus has shifted. They are going where the consumers are – digital and social media.
On the world stage, reports keep coming of the bigger advertisers spending less on agencies. And many see a changing of the guard ahead when the big advertisers are replaced by technology companies.
P&G, one of the world’s biggest advertisers, has cut its advertising spend by $US1 billion over the last four years. And it wants that number to be $US2 billion by 2021.
Analysts at research house Forrester describe what’s happening with marketing: “Digital is ubiquitous, the advertising and marketing services landscape is in flux, and the lines between marketing and customer experience are forever blurred — all while customer expectations continue to rise. CMOs who continue to live by the campaign will die by the campaign.”
The pressure on CMOs and their budgets keeps increasing. Gone are the big blast campaigns, shooting off in all directions. Speed, driven by the promise of technology, is the keyword.
Increasingly everything happens in real-time or near-time, chasing data, making best-bet decisions on where and how to place ads, and then moving on.
The role of the marketer
