March 24, 2008

Booz & Company/ANA Cross Industry Study

Booz & Company/ANA cross industry study finds marketing must move to a digitally focused business system and optimize and integrate client, agency and media consumer connections

Marketing Media and Ecosystem study 2008 points to the required tools for an increasingly “digitally savvy” world

Dubai, UAE, 24 March 2008 – A new study by Booz & Company in cooperation with the Association of National Advertisers (ANA), found that marketers are facing an increasingly complex combination of media fragmentation, new technologies, personalization and consumer power in a more digitalized environment. The study identified some major opportunities for marketers within the new digital marketing environment but, stressed the report, implementing the opportunities will require a complete marketing transformation.

“We have identified four critical areas where marketers must work harder for closer media integration in the digital sphere including consumer insight; media mix and channel management; marketing organization, culture, and talent; and ecosystem interconnectivity and partnerships,” said Gabriel Chahine, Partner at Booz & Company. “Some leading organizations have already begun to demonstrate the kind of change required, but there is no uniform model or template for all organizations. Instead, experimentation, innovation, and discovery are necessary challenges.”

“The convergence of media and technology, combined with the fragmentation and personalization of media, is affecting the connection between marketers and consumers in unprecedented ways,” Chahine continued. “The mix of media channels has shifted from being one-way, to a set of dynamic two-way media forums. Consumers not only talk back to marketers and interact with marketing messages, but also reshape and distribute those messages through global communities.”

Across the study, Booz & Company and ANA interviewed and surveyed more than 250 marketers, including 75 industry leaders—ranging from operational marketers to agency and media executives, digital strategists, chief revenue officers, CMOs and CEOs. Through their responses, the ways in which the complex media environment is reshaping the marketing ecosystem was identified, while highlighting the priorities, capabilities, and partnerships that will be increasingly required across the marketer– agency–media value chain.

A summary of the six key themes that emerged from the study follow below:

Marketing as Conversation: Marketing is less about sending messages to consumers and more about conversing and sharing experiences with them. To do this, marketers are calling on a new mix of media to further the communication of their messages, by deepening direct relationships with consumers and engaging with them in diverse ways, including on product sites, branded and unbranded community sites, interactive television, online test groups, mobile text programs, and blogs.

“To understand a consumer, the key is to listen and to observe,” said Chahine. “This is what drives consumer insights. Eighty percent of marketers in this study said that consumer insights are more important now than they were five years ago, and that they will become even more important in the future, as media becomes increasingly digital.”

Media as the New “Creative”: Message distribution in marketing in terms of timing, context, and relevance, is considered as important as creative output, with the digital sphere increasingly important. Media strategy and planning now have a raised profile within marketing organizations and departments and approximately 20 percent of marketers in this study have invested in internal communications planning functions.

“A flexible approach to media planning and buying will spread quickly throughout organizations. More than half of the survey participants agreed that media sourcing will look like the equities market in five years; they expect media to be bought, sold, and adjusted on a real-time and constant basis,” said Chahine.

“Marketing departments want capabilities that link media, creative and the brand strategy chain, part of which is communications planning and ’integrator’ roles for a full media mix,” he added.

Marketing + Maths: Recently, data has been flooding into the practice of marketing and with improved data quality, quantity and accessibility – maths has become a fundamental element of marketing. Marketers are now much more likely to have the metrics and capabilities to judge the effects of new media with advertising strategies, campaigns, and distribution increasingly based on predictive mathematical formula.

“In addition to having more data and more insights, marketers are building tools to project behaviors,” said Chahine. “Marketing models based on spend are no longer sufficient and predictive modeling tools are now the future for marketers. Among the financial-services or travel companies surveyed, 40 percent are using behavioral targeting as an input into marketing mix allocation and almost a quarter of marketers surveyed are adding people in marketing and media analysis roles – highlighting the intrinsic role that data now plays in marketing.”

Mind the Gap: Most marketers still allocate only 5 to 10 percent of their funds to digital media – despite the shift towards the digital environment. In some industries such as telecommunications and technology, there is a noticeable shift towards increasingly mature digital planning.

“Marketers across all sectors are increasingly making digital media a priority as it present numerous opportunities to engage consumers, generate data, and establish relationships,” he said. “Seventy-five percent of the survey’s participants use online advertising as part of their marketing mix and a quarter of the survey participants are using social networking, video posts, and blogs. The one point everyone agrees on is that digital spending will continue to increase.”

The “Digitally Savvy” Organization: All those surveyed agreed that becoming highly capable in marketing in the digital environment is both a challenge and a priority despite the fact that many organizations still have a long way to go. Marketers highlighted several barriers to being ‘digitally savvy’ with reasons from lack of senior organizational support and lack of experience in new media and the lack of digital talent.

“The pressing issue, like in many industries is that of talent and building the right team for the future of the organization,” said Chahine. “Many organizations are finding it difficult to find management talent that understands digital media. What we are seeing therefore, is a shift towards training those already inside the organization and sharing best practices across departments and geographies.”

The Network Effect: The move to digital media necessitates a higher level of collaboration and coordination across all players in the ecosystem. Almost 60% of participants believe that creative, strategic, and media capabilities should be rebundled but there is uncertainty on the appropriate type of agency to play the lead role. Many participants in the survey commented that media-agency partnerships will become more important than traditional full service agency partnerships, in an increasingly digital age.

“Marketers must increasingly act as integrators, coordinating ideas and execution across all marketing channels. Some organizations may have more than 20 points of contact with various agencies—a creative agency, a media buying agency, a digital agency, and a PR company etc. Marketers agree that today’s agency model needs to change, although there is disagreement about the agency model of the future,” concluded Chahine.

The study went on to discuss those factors which will be instrumental for marketers in coping with the demands of an increasingly digital age.

Leader Keys to Success

  • Make your consumer an advocate: Shift marketing objectives from sending a message to facilitating conversations with and between consumers. Understand user-generated content and how consumers use your brand. Vest your brand with meaning. Be authentic.
  • Elevate media and communications: Develop an internal ‘integrator’ position (e.g., communications planner). Appoint senior media leadership, incorporate media early in the strategic planning process, and integrate media with marketing.
  • Expand consumer insights capabilities: Leverage one-to-one consumer interactions and digital channels that provide real-time behaviors and patterns. Understand how consumers use media for entertainment, community and information. Lean on partners to provide additional data and insight. Embed them across the organization.
  • Apply rigor: refine and iterate your marketing mix: Build partnerships with digital agencies, media agencies and media companies to track ad placement, versioning and effectiveness. Digital media brings a new level of transparency and efficiency to the optimization of the marketing mix.
  • Bring digital out of the back room: Digital and interactive are no longer ‘niche’ capabilities. They are part of the requisite skill set for all marketers. Recruit and train accordingly.
  • Don’t stop at technology: Align the organization, hire the right talent, and initiate a progressive culture. Identify and address organizational barriers.
  • Learn globally: Develop structures to share best practices in new media. Watch technology patterns, social trends and consumer technology adoption rates in leading geographies.
  • Institutionalize experimentation and media innovation: Encourage experimentation and support ideas for incremental improvement. Formalize experimental spend efforts. At the very least, have a default budget framework such as allocating ~5% into experimental media.
  • Establish an increasing number of marketer, media and technology partnerships. Staff accordingly. Place bets across the media and technology landscape.
  • Manage complexity via partnerships: Know the difference between those capabilities to keep in-house and those better managed by external partners. Know when an idea is scalable, or a competitive advantage, and should be resourced internally.
  • Question marketing models: Identify clear brand objectives, evaluate multi-channel (e.g., relationships, event, in-store, email) marketing options to meet objectives, and develop business cases.

Of the marketers surveyed, only 24% consider their organizations as “digitally savvy”. 64% of those that participated agree that marketing departments should be organized around consumer segments, instead of brands while 51% cite lack of organizational support as a barrier to their use of new media. Overall 0% will decrease spending in digital media.

About the ANA

The Association of National Advertisers leads the marketing community by providing its members insights, collaboration and advocacy. ANA’s membership includes 360 companies with 9000 brands that collectively spend over $100 billion in marketing communications and advertising. The ANA strives to communicate marketing best practices, lead industry initiatives, influence industry practices, manage industry affairs and advance, promote and protect all advertisers and marketers. For more information, visit


Booz & Company 
Gabriel Chahine

Smriti Singh
Tel: + 971 4 3676156
Fax: + 971 4 3672615
[email protected]