Many company boards view the term "brand" as little more than a simple marketing tactic, not as a core driver of cash flow or a key to retaining a customer base.
In many cases, marketing as a whole is discussed from an ad-hoc perspective during budget talks—which is why it's often the first expense to be cut when revenue comes into question.
It's also the likeliest reason the marketing discipline is so underrepresented at the board level. Just look at the Fortune 1000: Active marketers don't hold even 1% of board seats.
And that probably won't change in the very near future, as marketing ranks toward the bottom of "most-wanted" board backgrounds at 21%—well behind financial expertise at 62%.
But business is much more competitive and moves at a faster pace than in years past, with the journey from marketing to revenue reduced dramatically. No longer is marketing the end of the pipe, focused solely on using a product or service and driving demand. As the world economy moves from pipe business models to platform- and ecosystem-based models, the dynamics of demand creation and monetization are merging to create holistic value. As a result, marketing will take a more central role in the new business dynamic.
And customers are driving it all. They are in full control of the path to purchase, increasingly demanding more from brands—with louder and louder voices, no less. If boardrooms fail to maintain a pulse-check, they can lose sight of a customer base. Now throw in changing forces of the market, especially with direct-to-consumer business models taking a stronger hold, and it only stands to reason that marketing needs a seat at the table.
Marketing can help leverage data to speak to the key dynamics of the business and keep the voice of the customer at the center of the boardroom.
Besides, Marketing often sits at the center of a company's transformation. Whichever direction you move or innovate your brand, it will have limited value if it's not connected to—or, indeed, driven by—customer needs.
The Agency-Business Relationship
Changes of the dynamic within the board will naturally have an impact on the agency-client relationship. Many brands will move to becoming true business partners with an agency, asking for the work to provide an even greater ROI. Accordingly, agencies will need to approach client business in ways different from traditional approaches.
For one, agencies must develop an almost intuitive understanding of a client's business. It's not enough to master its marketing. Agencies need a deeper appreciation for market share, competition, distribution, and business model to ensure the work is relevant to these dynamics. That will help put ideas and solutions into the correct context for the client.
There will also come the need to help the boardroom understand the competitive advantage of creativity—in all its guises, from big concepts and platform options to creative partnering and ecosystem development for the brand itself. As clients embrace creative ways of looking at the business, they'll begin to grasp the deeper dynamic of developing greater and greater customer experiences. That can be a real value add.
Of course, those changes will move the relationship from transactional to, well, relational. Gone are the days of taking a brief and then returning with a solution to a client's marketing woes. It will be more about co-creating with a brand.
What that looks like will depend on the client. Not all brands want to look at a business challenge with you and work up a joint solution for the board, but that's pretty much the ideal: to work as one unit.
Making a Real Go of It
While these new dynamics are great to speak about, the day-to-day reality is much different. As an agency, you'll need to constantly unlearn some key components of your intellectual property and value chain and build new skill sets within your teams.
What roles and responsibilities will best reflect the needs of not just today, but also tomorrow? Chief storyteller is one role that can make your brand attractive to your customers and to Wall Street. What other information do you need to capture and learn about a client's business? Do you understand the client's revenue and margin model?
Agencies will have to think beyond the "ad," evolving into always-on experiences within a broader ecosystem of engagement strategies. You'll have to come to the table with a clear point of view on the value of every solution coming from within your ranks—with the data to back it up.
On the flip side, brands will also be required to bring the agency deeper into the business. This means sharing the good, the bad, and the ugly. That way, you can develop solutions relevant to the business. How else do you ensure that everyone is one the same page?
Again, what this looks like will depend on the brand, but establishing a forum for tracking ongoing projects ensures that everyone is held accountable for his role in the solution. It'll also help brands (and the boards that run them) understand the discipline more fully, bringing a new appreciation to the art of marketing.
Both the agency and client can do a few very practical things to embrace and respond to this trend. The following often top the list:
- Transform the quarterly business review into an ideation moment. Quarterly business reviews have long been used to get a better read of a business's potential. Although that's all well and good, QBRs can help move the needle for all parties involved. Use your next review to provide real business updates on the progress against key challenges. Share sales and profit information to provide deeper context. Map out next steps to hold each other accountable for progress from quarter to quarter, and ideate around these business dynamics.
- Reward progressive behaviors that drive the business. Clients and agencies should review key KPIs together so that the picture of success is always evolving. Consumers are a key driver here. Their expectations are not confined to a sector; they expect to be in control, and they will exercise their voice in social channels when they feel they are not being catered to. Pay close attention.
- Keep the customer at the center. Customer expectations should be your guiding light. Gather all the necessary data to gain deeper insights into your customer base. Use that information to inform products, services, messaging, etc. Make customers an obsession, and then bring in an agency to convert that obsession into business gains.
* * *
No one can predict what the future holds for the agency-client relationship. But you can bet your bottom dollar that Marketing is moving closer to being in the boardroom—and your value add will get you there. Just be very sure that you and your client partner are ready for it.