The clock is ticking towards 2020, faster than many would like. All the slicing and dicing of budget planning that takes place during the next two months is a necessary evil--and is often dictated by a predetermined (and stiff) organization chart. But, just because the org chart provides structure, it doesn’t mean it’s truly cost efficient.
Here’s an example, another “blast from the past” reference...
When I worked at Y&R, I managed an iconic consumer product brand. It had been around a long time.
We freshened it up with the fat-free craze of the late 90s, and gave it some charm and relevance. But the fat-free competitors were aggressive. Ad spending was the highest ever, just to keep up.
The product came in two delivery systems: a shelf stable you-make-it box, and a ready-to-eat refrigerated version. The organization was structured so that the P&Ls for these product lines were evaluated separately, which will make sense to anyone who’s worked the refrigerated section of a supermarket.
“Ad spending was the highest ever, just to keep up.”
But alas, the marketing was separate too. For the consumer, the decision wasn’t cold versus boxed, it was [insert iconic brand here] versus other choices. Unit sales grew with the investment in advertising, but profitability stalled.
We couldn’t convince them of the cost efficiencies of looking at marketing from the customer’s view. The organization chart won. Argh.
I get it. Org charts are undeniably important; critical even. But, when they refuse to consider the customer, profitability can stall. It’s something we keep top of mind whenever we talk about budget, a real-life “lesson learned.”
How efficient can you be with your 2020 marketing spend?