Your background is an interesting mix of media, advertising and startup world. I’ve always wondered that the way that startups do marketing is quite different from the traditional methods. Startup marketing people call themselves growth hackers and use all sorts of different terminology. But what is your opinion – what are the areas where startups can learn from traditional marketing worlds and vice versa, where traditional marketing world can learn from startups?
Let me just comment briefly on my background. I’ve worked on creative advertising agencies’ and digital agencies’ side for more than 16 years. And I’ve also worked with startups and been an investor in few companies. Compared to that, my media experience is actually quite brief. Well, obviously I’ve always worked with media agencies in a way - I’ve sat in the board of Carat for 2,5 years and I’ve also worked years at Aegis Dentsu. But with OMD I’ve been a little less than a year now. The experience here has veen fairly short but very exciting.
But the question you asked is a really good one. I think the startups differ from traditional advertisers and brands in a way how they see and plan things. Traditional brands have a much more what we call a long-term view on things. Startups on the other hand are often criticized for having a very short-term view. But traditional advertisers’ view on branding enables them to see marketing as a long-term investment. I truly believe that if every Coca-Cola, Mars and Snickers would have once behaved like most startups do today, we wouldn’t have any big brands, let alone any iconic brands. Startups very often expect very quick results – they want leads, conversions and sales ASAP. But I would dare to argue that if you take any FMCG or consumer branded product, unless you would know the brand, it’s quite highly unlikely that you would purchase it ever. You wouldn’t buy Nissan Qashqai if you didn’t know what Nissan was, let alone their approach to technology and their cool urban branding. It’s basically just a Japanese car but thanks to their branding and advertising you have a certain image of it.
In my experience startups are very impatient and they very often forget that unless you have awareness in your preferred target audience, it’s very hard to succeed. And this also goes very well for the B2B world. What startups could also learn from traditional advertisers is the brand building and also the use of more traditional metrics. Metrics such as awareness, brand preference, etc. can be seen as self-evident or whatnot, but they are actually very important.
Going back to your second part of the question – what could traditional brands learn from startups – I think one thing is to be a little more anxious to get results. I’m not saying just to concentrate on sales and leads, but to pay more attention to the measurement of investments and ROI. So that they would understand what is the actual payback of their marketing investments, also in a shorter term.
Another thing definitely is to become more digital. I know it’s already cliché and tiresome to say in 2016 “be more digital”, but I think it’s worth to emphasize that you should really embrace all the digital tools, platforms and mechanics you can use. For instance, if we run a TVC for any traditional client, it goes without saying that we would also need to watch the web analytics all the time, we should be looking how this TVC is driving different digital turnouts, how people are being activated, how is it affecting second screen usage, etc. We drive awareness in traditional channels, but we need to measure it like a startup guys – in digital and in real-time.
Startups are very real-time, they’re anxious to get results quickly. And they’re very critical about getting good ROI. For them 1000 euros is a big money and they think hard before they decide in which channel they’ll invest it. But brand builders again are looking more at the bigger picture – how are the long-term sales going, how is brand preference doing, etc. And both of these approaches are important.
Another interesting issue nowadays is related to the increasing market share of Facebook and Google. These big companies are part of the reason why increasing number of young generation marketers are used to models like pay-per-click – they pay something and they know exactly what they get for it. But when this kind of people have a meeting with traditional media agencies who tell them about TV, print and outdoor metrics which are quite vague and have no direct relation to sales, I would say it is a major cultural shock. Do you see this as a big problem nowadays? If yes, how to overcome it?
I’m not sure I would call it a problem, but it’s definitely an issue. I think the problem is that – as you said – the metrics are very different. Online you have PPC or CPC or CPM, and in TV the metrics are totally different. In a pay-per-click or pay-per-action kind of world, you actually invest in getting a direct response. But we must differ between operational and tactical marketing and more wider spectrum of media where objective of using them are quite different.
If your goal is to increase awareness, traditional linear TV has been the tool of the trade by which you can reach most of the population of any country. Outdoor again might be another way of raising awareness but also activating you when you’re on the move and reminding you about some product. What I’m saying is that marketers shouldn’t forget that every different media and channel has it’s own different purpose and different media objective. There’s not much point in comparing CPCs against TV or outdoor. TV with its audio-visual images might be a very good channel for storytelling, whereas SEM, e.g. Google search is very different – it’s more rational and more like a helpful tool which helps a consumer to find something they need. It’s two different worlds.
I also think that one of the reasons why Facebook and Google are so successful, and this is where probably traditional media owners should be awake, is that they target small and medium sized enterprises very well. And they don’t do it through media or ad agencies, but they offer the DIY model, which works very well for many small companies.
But if you want to do a proper integrated marketing campaign, you of course have to measure everything from the starting point to the effect on an inter-media level. So you cannot just be happy if you get 50 people per month visiting your website. If you are into bigger goals and into scaling up your business, and if you want to sell to 500 people or 5000 people, then you most likely would need to use marketing in a broader sense.
But if you ask me about the future or where the media owners should invest, I do think that if they want to target more smaller local companies, they should actually build better self-serving or so-called DIY channels and platforms. Quite often media owners try to catch the big fish, like Coca Cola or McDonald’s, but then you have the local pizza guy who can’t maybe afford to advertise on print paper, but he could very well advertise on the website and he could maybe even place the ad by himself. The Google was the first one who extremely changed the whole scene when they introduced the search advertising. It was so easy your mom could use it. And that’s why it became so popular.
If you look at Finnish media agency scene, what are the main trends right now in the market?
At the moment, the trend which advertisers in Finland are very keen on, is data-driven or data-led marketing. In OMD we practice a lot of data-led marketing which is based on our partner data (from different websites and ecommerce sites), our clients data (the data which they have about their clients), and also some third party media owner data. The data is not only based on your interest, but it is also based on your behavior, i.e. what are you doing online. For example, your behavior might suggest that you’re searching for cars, you might be in online forums, reading about cars, etc. And based on your behavior (which we get from current and real-time data), we will know your profile and your intents. And what we would do then – regardless where you are, we would bid high to get the right advertisement placed in front of you.
The data will define different audiences and segments and based on that we can create different advertisements for them. Thanks to the data we know whether we should target you with an ad showing Japanese cars or would you rather see ads with German cars.
So the data-driven digital marketing is definitely the
hottest thing in town. This might mean reaching smaller audiences, but
audiences that are much more likely to be converting into sale or some sort of
action. It’s not a cost-saving thing, but it is basically about efficiency and
Markus Grannenfelt is the member of the jury of the Balticbest 2016.