Marketing Governance

PepsiCo, the food and beverage group, has achieved greater coordination in its global advertising creative and production activities, yielding cost benefits and more consistent messaging. In a bid to rejuvenate flagging performance levels, the firm is currently focusing on five strategic areas, including technical issues like execution, productivity and enhancing cash returns, as well as innovation and brand building.

While discussing the last of these matters, stated it was on target to spend 5.7% of revenues on ads and marketing (A&M) this year, an uptick from 5.2% in 2011. Indra Nooyi, PepsiCos CEO, said:

Weve made good progress on increasing our A&M investment and weve significantly stepped up our media in key markets. Much of this is enabled by having much greater coordination among our operations globally, allowing us to leverage creative and production activities across multiple geographies, which gives us cost leverage and drives greater consistency in our brand messaging. Read More

Forrester. The business intelligence company conducted an online survey of 864 B2B marketing executives. Among the results is the discovery that across various industries, gaps in marketing investment growth have narrowed from levels reported in 2011:

• High-tech services firms still lead the industry pack in 2012, but with a much more modest growth plan of 9%, compared with the 17% reported in 2011.
• Manufacturing firms are second with a 7% increase as they invest in digital channels. Thats up 3 percentage points from 4% in 2011.
• Pharmaceutical, medical device, and biotech budgets are showing a sharp change of direction, shifting from a 3% cut in budgets in 2011, to a 2% increase in 2012. .

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Traditional and digital advertising expenditure levels enjoyed healthy growth last year, reports from Nielsen and GroupM have shown. According to Nielsen, the insights provider, worldwide adspend rose by 7.3% to $498bn in 2011, primarily based on published rate cards estimates.

The company stated that the market expanded by 6.2% during the final quarter of the year, when ad sales through TV, newspapers, magazines and radio came in at $131bn. Latin America posted an 11.6% leap, an acceleration hitting 11.5% for Asia Pacific and 11.3% for the Middle East and Africa. North America saw a 1.8% increase, but Europe was down 0.4%. Read More

survey by Doremus and The Financial Times. Over 600 executives from a variety of companies and industries gave their views on the business environment for the coming year. Six out of ten respondents said that they expect a further decline in the global economy over the next six months, with almost half saying that they don’t believe the economy will recover until or after 2013.

Contrary to what the previous statistics would suggest, companies announced they expect to increase rather than decrease their spend, with advertising and marketing spend increased by 10% in 2011 already. A quarter of organisations surveyed plan to hire this year, with the same proportion expecting their company’s employment levels to decline. Read More

Marketing executives are planning to increase spending on all forms of marketing in the coming year, according to the CMO Survey. Marketing budgets are expected to increase 9.1 percent and companies plan a 7.2 percent increase in marketing hires over the next 12 months.

At the same time, optimism among marketing executives for the overall U.S. economy reached its lowest point in two years.  On a scale of 1 to 100, respondents rated their own optimism level 52.2 on average. The lowest time before this was in February 2009, when the average was 47.6. Read More

For as long as I can remember marketing surveys have regularly arrived in my inbox asking for answers to questions designed to capture trends in marketing activities and spend. The format is pretty consistent; ‘over the coming year are you planning to spend more / same / less on the following.’ And the following might include a range of media – TV, Radio, Press – and of course over the years this has expanded to include categories such as direct marketing, promotions, PR, digital, website, social and so on.

This is all very well, but to my mind has failed to recognise that as well as production and media costs there is another category of spend that is relevant but missing. Increasingly with the shift from paid media and print to free or relatively low cost media such email, blogging, Twitter or your website, the reach of the content is driven not by how much money is spent on media but by spend on technology and strategy. Read More