Brands failed by siloed approach to marketing

'Siloed thinking' in marketing departments
'Siloed thinking' in marketing departments

A new ISBA report highlights structural problems in an alarming number of UK marketing departments, with 'siloed thinking' the main problem, writes Andrew McCormick.

Something has gone awry within the marketing departments of some of the UK's biggest brands. According to research by ISBA, revealed here exclusively by Marketing, they house some startling structural shortfalls.

We are not talking about the marketing department of the future here, but the marketing department of today, and what can be done to fix it.

The key findings from ISBA's 'Structuring Marketing Communications Resources' report show that only one-quarter of the brands surveyed are satisfied with their internal structure, external structure and co-ordination mechanisms.

Almost half of respondents say their company's marketing is still characterised by 'silo thinking'. One third claim that their agencies do not collaborate at all, and fewer than half are satisfied that their structure enables effective brand stewardship.

Debbie Morrison, head of consultancy and best practice at ISBA, says the trade body's report was born of high-profile marketing directors coming to her and decrying marketing department structures that were not 'fit for purpose'.

'Old-fashioned structures need to be updated. We are at a tipping point of change and many big brands are taking a radical look at how they operate,' she adds.

Alfred Chandler, a leading economist in the 20s, once said: 'Structure follows strategy, or inefficiency results.' Marketing strategies have certainly changed radically since 2000, but structures have, in many cases, remained the same.

The list of marketing department problems highlighted by the report include anachronistic, siloed structures, unruly agency relationships and ineffective communication. With so many structural problems hampering marketers and their activities, how can they start to try to resolve it?

First, diagnosing the problems in detail is a must. Non-integrated structures lead to in-house departments and roster agencies thinking about creating an effective direct mail or PR campaign instead of overall business objectives. Moreover, it risks leaving the customer with a disjointed view of the brand.

Some companies have started to take action. Diageo is building an internal team of planners with a brief to consider integration from the off. Instead of leaving this essential job to agencies with agendas, this approach offers support to the marketing director who, often, is the only person in the marketing department with an overview of all activity.

A key element to mobile operator Everything Everywhere's restructure of the Orange and T-Mobile brands has been internal communications planning. Spencer McHugh, brand director of Everything Everywhere, has spent the past five years building up a planning function, designed to ensure that siloed thinking is overcome.

'I'm not going to pretend we're perfect,' he says. 'Our ambition is to become even more integrated and digitally focused. Processes are important and we have an integrated planning function, which aims to bring all the elements of our marketing together.'

McHugh says that this provides the Orange and T-Mobile brands with a ballast, balancing campaigns through separate channels, with the overall marketing goal in mind.

Juliet Blackburn, a consultant and former chief marketing officer at Skype, contends that there is more that brands can do on integration. 'Having a siloed department hampers the ease of working together but it can be overcome. It is down to effective briefing, co-ordination, communication and common interest from all parties,' she adds.

Insurer Aviva's global brand director, Jan Gooding, values the importance of structure but argues that emotion can often overcome structural flaws. 'No matter what the structure is, it is essential that the emotional engagement in the brand is there,' she says. 'What we have experienced at Aviva, is our transformation into a single brand, with everyone getting behind it globally. It means they are inclined to work together in a way that structural change could never achieve.'

Aviva has also taken practical steps to make sure its marketing meets overall objectives.

This has included setting up a marketing communications leadership team (see panel, below).

Blackburn's reference to 'all parties', is a salient reminder that marketing works well only if the right structure is in place to harness the ability of roster agencies. This is an area covered by the report highlighting problem number two for brands: how to manage a big agency roster that is abundant with vested interests and selfish practices.

The report found that brands, on average, retain seven types of agency. 'As more specialist agencies are appointed, brands just can't get them to collaborate for better efficiency and effect,' says Morrison. 'It is still the case that agencies are constantly fighting for share of budget, and in a recession, when brands have been examining structures, this has failed to change.'

Blackburn argues that marketers should not be held solely responsible for this failing. 'All the blame can't rest with the marketer,' she says. 'Agencies should play nicely together when encouraged to do so, but it doesn't always happen. For some, it just isn't in their nature, especially when the battle for the budget still plays a role.'

McHugh has a different view, however. 'It is up to the brand to set the agenda,' he says. 'We expect collaboration, but it rests with us to provide the integration mechanics.'

One way to get help with managing such a roster is to appoint a lead agency to a co-ordinating role. The report found that one in 10 brands employs a 'consortium' structure, whereby the lead agency manages all the others.

A handful has gone in the other direction, employing one agency to handle all communications.

Gooding is a great believer in expecting more than blinkered advice from agency rosters. A few years ago, Aviva worked with six major networks. Now it retains a lead ad agency, Abbott Mead Vickers BBDO, and a lead media agency, ZenithOptimedia, on a global basis. According to Gooding, this has helped Aviva in several ways. 'Competing agencies can get in the way of good work. What we are seeing now is that sharing learnings and best practice has increased.

That has helped us better measure the effectiveness of our marketing.'

While ISBA's report has highlighted structural flaws, Brand Learning co-founder and managing director Mhairi McEwan has identified yet more pressures coming to bear on marketing directors (see panel, left).

ISBA's initiative to address siloed structures and agency management has to be welcomed as a launch pad for tackling these problems. The report concludes that, 'in this brave new world, we need brave new structures'.

It takes brave marketing directors and chief executives, however, to take brands from the 'old model' of siloed thinking and petty agency squabbles to a new way of thinking and, most importantly, a new way of doing.

KEY FINDINGS

From ISBA's 'Structuring Marketing Communications Resources' report

- One third of brands surveyed believe their agencies fail to collaborate with one another

- Half say their structure enables their agencies to work together without their control

- Fewer than half the brands surveyed meet multiple agencies to discuss creative ideas

- Brands, on average, employ seven different types of agencies

- Fewer than half are satisfied that their structure enables effective brand stewardship

- Fewer than half believe that their marketing structure is simple to orchestrate

BRAND VIEW - Jan Gooding, Global Brand Director, Aviva

In order to get the marketing function working, it is important to work together. That's why (Aviva's chief marketing officer) Amanda Mackenzie created the marketing communications leadership team. It is a global marketing board, where marketers from every region work together on everything from marketing strategy to talent development. This has become better and better, so marketing now has a major impact on the business agenda.

AGENCY VIEW - Jed Glanvill, Regional Leader and UK Chief Executive, Mindshare

That half of brands don't sit down with multiple agencies is surprising. We have an open-source approach, which involves us inviting all stakeholders from the brand and other agencies to define strategy, and then we move on to working on everything in partnership. We even bring in media owners such as Facebook, ITV and News International from the start. It is important that agencies don't pretend that they can solve all the problems on their own.

CONSULTANCY VIEW - Mhairi McEwan, Co-Founder and Managing Director, Brand Learning

Marketers face unprecedented pressure due to challenges from globalisation, digital, head-count reduction and wider company reorganisations. They are also expected to have an overarching view of the brand and knowledge of techniques as diverse as point of sale and Twitter. Marketers realise that a big part of the job is helping the organisation deliver customer value. It is difficult to do unless you have methods in place to integrate the offering to customers.

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