What

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Whats KeepingMarketers Awake at Night
John GustavsonPresident and Chief Executive
OfficerCanadian Marketing AssociationCMA
Ottawa ChapterJanuary 30, 2007
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10 buzzwords not to use ina marketing
presentation
from the home office in Wahoo, Nebraska

1. outside-the-box
2. synergy
3. the big idea
4. ROI
5. paradigm shift

1. customer-centric
2. critical mass
3. buzz
4. it is what it is
5. low-hanging fruit

Courtesy the Creative Group
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Four market realities

1. Post-Enron marketplace -- More shareholder/public
   scrutiny
2. Ethical and trustworthy companies being rewarded
   with higher degree of customer loyalty
3. Government will step in if we dont effectively
   self-regulate
4. Canada facing economic uncertainty

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Four marketing realities

• Consumers have more choice
• Technologies changing at lightning speed
• Push marketing doesnt work anymore
• Consumers determine how they will interact with
  marketers
• New media leading to brand fragmentation
• More pressure on marketers to make measurable
  contribution to bottom-line and to deliver strong
  brand value

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Hot marketing issues

• Building brands in a complex environment
• Marketing ROI
• Managing the customer relationship
• Emancipation by technology
• The talent crunch
• The delivery infrastructure
• Governments agenda
• National DNC List / telemarketing rules
• Consumer privacy
• Identity theft

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Hot marketing issue

• Building brands ina complex environment

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Hot marketing issue

• Building brands in a complex environment
• Eight key factors
• Globalization/internationalization
• Impact of U.S. and international brands
• Challenge Canadianizing global brand
• Local brand management is Canada just a U.S.
  branch office are decisions going south?
• The empowered consumer
• More choice -- Todays average consumer hit with
  20 times as many messages compared to five years
  ago
• Control of experience driven by want vs. need

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Hot marketing issue

• Building brands in a complex environment
• Key factors (continued)
• Media
• Cutting through the clutter major challenge for
  brand managers
• Proliferation of new media/fragmentation
• Consumer-generated media/interactive
• Message blocking/filters
• Shouting at consumers doesnt work successful
  organizations talk with consumers

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Hot marketing issue

• Building brands in a complex environment
• Key factors (continued)
• Technology
• Consumer customization, personalization
• First to market importance
• Moving from supply to demand economy
• Pace of change unpredictable -- Time to
  market/cost to market
• Economic pressures CMO taking back seat to CFO

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Hot marketing issue

• Building brands in a complex environment
• Key factors (continued)
• Demographics
• Baby boomers vs. the online generation
• Impact of Canadas multi-cultural mosaic
• More public moral code
• Moral persuasion / government suasion
• Ethical business wins
• Organizational change who owns the brand?

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Brand 101The Brand Hierarchy
The governing ideals that marketers leverage to
build brands
Brand Esteem
Customer Experience
Brand Stewardship
Brand Knowledge
Relevance
Differentiation/ Leadership
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Global-ization Empowered Customer Media Technology Economic Demographics Moral Code Organizational change
Differentiation Leadership
Relevance
Customer Experience
Brand Esteem
Stewardship
Brand Knowledge/ Comm.
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Hot marketing issue

• Building brands in a complex environment
• Conclusions
• The brand is in a period of progressive change
• Organizations that are flexible relevant will
  win
• Marketers need to engineer the ideal customer
  experience
• Marketers need to better understand what makes
  the empowered consumer tick

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Hot marketing issue
MARKETING ROI
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Marketing ROI

• Barriers to marketing ROI
• Difficulty agreeing on common definition
• Lack of accepted cause and effect
• Lack of data reporting capability
• Lack of finance buy-in -- arriving at a number
  that will withstand CFO scrutiny

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Hot marketing issue

• Marketing ROI
• Marketers under constant pressureto prove their
  impact on overall business
• Challenges
• Main challenge for marketers is to better
  understand what theyre measuring and why
• Pressure from CEO/CFO to provide immediate
  short-term results can jeopardize long-term brand
  health (equity markets focus on quarterly
  returns)

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Hot marketing issue

• Marketing ROI
• No longer realistic to function in a silo where
  activities and successes are separate from
  overall corporate goals
• Successful marketers shifting measurement
  thinking from being campaign/product ROI focused
  to being more customer centric
• Latest Longwoods AdTrac study finds that 80 of
  marketers agree with the statement it is
  important to have a measure of ROI that deals
  with delivery and consumption across multiple
  channels

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Hot marketing issue
MANAGING THE CUSTOMER RELATIONSHIP
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Hot marketing issue

• Managing the customer experience
• Managing the customer relationship where the
  consumer is more empowered is especially
  daunting
• Marketers need to
• Respond to customers individual needs
• Anticipate changes in those needs
• Have the right tools to deliver

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Hot marketing issue

• Managing the customer experience
• Canada above global benchmark in
• Data collection and use
• Customer information
• Customer experience
• Canada falls below global benchmarks in terms of
  process management, technology support and
  retention

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Hot marketing issue

• EMANCIPATION BY TECHNOLOGY

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Hot marketing issue

• Emancipation by technology
• Personalized media technologies have spawned a
  "networked self" that is shaping consumer
  marketing and society at large
• Faith Popcorn
• Seismic shift in brand-customer relationship
• Negative customer experiences are broadcast to
  the world
• Blogs, MySpace, YouTube
• Impact of search marketing
• Does Google own the brand?

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Hot marketing issue

• Emancipation by technology
• Flip side More choice for marketers
• Important to engage in two-way dialogue
• Push marketing doesnt work anymore
• Blog disclosure/transparency a major issue for
  corporations and consumer groups
• Paid bloggers cited in Edelman/Wal-Mart case
  October 2006

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Hot marketing issue

• Emancipation by technology
• Conclusion
• New technologies are universal listening tools
• Creative marketing using new technologies can be
  very rewarding if done right -- it can also be
  destructive and dangerous for a brand

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THE TALENT CRUNCH
Hot marketing issue
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Hot marketing issue

• The Talent Crunch
• Inability to attract and retain talent number one
  threat to Canadian corporate profitability
• Accenture December 2006
• 26 of Canadian employers find it difficult to
  fill permanent professional positions (lumped
  into this group are marketing staff) due to lack
  of available talent that is threatening growth
  plans
• Manpower Inc. October 2006

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Hot marketing issue

• The Talent Crunch
• Staff turnover big issue
• Average CMOs tenure just 23 months/brand manager
  on the job for 18 months
• Impacts brand
• Impacts agency/client relations
• Major loss of intellectual capital when personnel
  changes every two years

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CMA educational programming

• Conferences
• Advertising/Marketing Forum February 15
• B2B Marketing March 1
• Not-for-Profit (half-day) March 28 Sept. 20
• Word of Mouth Marketing April 12
• Branding June 21
• Regulatory September TBA
• Digital Marketing October TBA
• Direct Marketing November TBA
• Marketing ROI November 22
• Seminars (Spring 2007)
• E-newsletters, introduction to direct marketing,
  blogs, data mining, copywriting, loyalty
  programs, effective persuasion
• Customized in-house training

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Hot marketing issue

• The delivery infrastructure
• Current four-year agreement between Canada Post
  and CUPW expires Jan. 31/07
• Talks under way to reach negotiated settlement
• Potential summer of labour unrest

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• Hot marketing issue
• Governments agenda
• national DNC list
• tougher telemarketing rules
• consumer privacy
• identity theft

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Government agenda
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Government agenda

• National do-not-call list
• Dec. 2004 -- Bill C-37 introduced in House of
  Commons
• Spelled potential disaster for business
• 2005 CMA appears before government
• CMA successful in securing
• Exemption where there is an established business
  relationship
• Reasonable penalties
• Exemption for charities
• Nov. 2005 Canada introduces amended legislation

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National DNC List

• Definition of existing business relationship
• 18 months exists where a consumer has made a
  purchase or donation, has rented, leased or
  contracted for, or has otherwise participated in
  a organizations provision of products or services
  within the past 18 months.
• 6 months exists for six months from the dateof
  an inquiry or application from a consumer

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Government agenda

• Telemarketing
• Several outstanding issues (B2B exemption, list
  cost to business, government responsibility for
  execution, enforcement, complaint investigations
  and consumer education)
• Choosing DNC List operator part of government
  procurement process
• February/March RFP to be issued
• Late 2007/Early 2008 DNC list up and running

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Government agenda

• CRTC also conducting wholesale review of all
  telemarketing rules (Note No exemptions here)
• CMA still stands by 2004 position
• Need for universal calling hours
• Seller-specific internal DNC lists
• No agency-specific DNC lists
• No need for unique registration number
• No toll-free number or live agent requirement
• 31-day enforcement window (for both internal
  national DNC lists)
• No change to existing and contact info rules
• ADADs and voicecasting permitting for B2B EBR
  telemarketing
• PDD maximum 5 abandonment rate
• Spring 2007 CRTC to finalize telemarketing rules

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Government agenda

• Consumer Privacy
• Federal privacy law undergoing mandatory
  five-year parliamentary review
• Consumer groups want higher level of consent and
  stronger enforcement
• Privacy Commissioner
• Not looking for more enforcement power
• Believes law is generally working well
• Some concerns around notification of privacy
  breachesand transborder flow of personal
  information

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Government agenda

• Review of federal privacy law
• CMA appeared before Commons Committee in
  mid-December (first national association to
  appear before hearing)
• Law appears to be working well
• Too early to make any substantial changes

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Government agenda

• Review of federal privacy law
• CMA position on data breach notifications
• Organizations have responsibility to notify
  consumers where loss or theft of personal
  information poses reasonable risk of harm
• Challenge to establish correct threshold for
  triggering notification
• Need for national guidelines

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Government agenda

• Review of federal privacy law
• Outcome unknown at this time
• Growing uncertainty
• Escalating pressure from privacy advocates for
  tougher privacy laws
• With prospect of federal election, easy win for
  politicians
• Hearings continue
• Draft report expected in Spring 2007

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Other major threat identity theft
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Other major threats

• Identity theft
• People believe their personal information is at
  risk phishing attacks, transaction security,
  credit cards, spam
• Number one privacy concern or worry for
  Canadians
• Top consumer complaint at U.S. FTC

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Other major threats

• Identity theft phishing attacks
• 176 brands hijacked in October 2006
• Single record for one month (96 brands hijacked
  in October 2005)
• Financial services 1 target
• Source Anti-Phishing Working Group

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Conclusions

1. Consumers more empowered than ever before
2. More and more difficult to build brand
3. More pressure to deliver ROI
4. New media/technologies changing at lightning
   speed
5. Big brother is watching

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Ongoing CMA role
ADVOCACY

• Government relations
• Self-regulatory initiatives
• Do Not Contact service
• Code of Ethics and Standards of Practice

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Ongoing CMA role
KNOWLEDGE

• Expanding marketing thought leadership
  offering on the hot issues facing marketers
• New marketing blog www.canadianmarketingblog.com
  
• New Advertising and Marketing Forum on The
  Business of Ideas February 15
• B2B Conference March 1
• New content on CMA website www.the-cma.org

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Ongoing CMA role
COMMUNITY
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10 buzzwords not to use ina marketing
presentation
from the home office in Wahoo, Nebraska

1. outside-the-box
2. synergy
3. the big idea
4. ROI
5. paradigm shift

1. customer-centric
2. critical mass
3. buzz
4. it is what it is
5. low-hanging fruit

Courtesy the Creative Group
48
Whats KeepingMarketers Awake at Night
John GustavsonPresident and Chief Executive
OfficerCanadian Marketing AssociationCMA
Ottawa ChapterJanuary 30, 2007