Case Study: Developing a Culture to Run Marketing As a Business

As 2010 approached, SAP found itself in a critical position. The competition was evolving to be leaner and more targeted. Customers were becoming more knowledgeable, demanding and price sensitive. SAP’s image was quickly becoming outdated, and there was a growing rift between employees and upper management that threatened to pull the organization apart. A new case study by Matthew Quint of the Center on Global Brand Leadership, Run Marketing as a Business: The Transformation of SAP Marketing, is a two-part study that delves into how SAP’s leadership worked to reinvigorate the company and how SAP Marketing evolved into a department focused on culture and ROI-driven results.

The financial crisis of 2008 impacted SAP and other enterprise resource planning providers in three major ways: it sharply contracted IT investments, it changed the ways that companies evaluated and purchased ERP services, and spawned a powerful new competitor in Software-as-a-Service (SaaS). Spencer Osborn from Ogilvy notes, “…There is an increasing trend of ‘prosumer’ purchasing behavior in the business IT sector. Google, Apple, and others brought simplicity to the IT interface and professionals now expect the same for business software.” The business was becoming more and more complex, and traditional methods of product management and marketing were no longer applicable.

Amidst these business and consumer challenges, SAP’s Board brought in new co-CEO’s, Jim Hagemann Snabe and Bill McDermott, who quickly set ambitious goals for SAP: generate a revenue target of €20B, create an operating margin of 35%, and reach 1 billion people with SAP technology and services.

The CEO’s broke from tradition and focused on expanded SAP’s portfolio of offerings through mergers and acquisitions. Simultaneously, SAP Marketing developed a strategy to transform SAP’s image to a more innovative, dynamic and approachable company. In 2011, Jonathan Becher was appointed CMO, and immediately began driving a platform effectively combining both the art and science of marketing. He elaborated, “[I]… think ‘business first, marketing second.’ From that comes a mantra that marketing is a business, not just a division that supports a business.”

Becher recognized that SAP Marketing was excellent at communicating clear messages that grew brand awareness, but he wanted to institute an approach that would align his team to build a culture that supported a measurable SAP Marketing strategy with overall company goals. Thus, SAP Marketing developed 5 key “transformation pillars” to drive all future marketing activities. By using these pillars as guide posts, Becher and SAP Marketing set to update SAP’s image to match its new and expanded product portfolio. Key performance indicators (KPIs) were created to measure marketing outcomes, rather than marketing activities. To further align incentives and encourage staff members to work together, bonuses were tied to achieving the 10 collective KPI’s.

SAP Marketing’s changes led Paul Greenberg, a customer relationship management and technology author, to declare, “SAP has transformed their company from…a highly traditional, conservative, closed company, to an open innovative, accessible organization…”

Learn how SAP Marketing was able to revitalize SAP’s brand against target business metrics and read more about how they plan to continue moving forward in today’s dynamic business environment in the new case study.

Download Run Marketing as a Business Part 1 and Part II.

By Matthew Quint

What You Don’t Know About One-Night Stands

If you’re reading this text, clearly I’ve captured your attention. I’m sorry to say this isn’t an article about one-night stands.

At some point in recent years, many of us have likely clicked on what we thought would be an interesting article only to discover that it was a paid advertisement in editorial guise. Content marketing is not a new concept, but it’s becoming an increasingly popular strategy for media companies and brands to team up on new ways to drive revenue. According to Pew Research Center, sponsored content increased by 56% in 2011 and is still on the rise.

Edelman’s Chief Content Officer Steve Rubel stresses that sponsored “content is no longer optional. It’s imperative.” At BRITE ’13 Rubel explains, “It’s hard now to amass large audiences the way you used to. And that means money problems for everyone.” He notes, however, that “out of economic disruption come great opportunities.” Rubel says that display advertising has become less lucrative in recent years, and can even drive down CPM. Content marketing, on the other hand, is a fraction of the cost with the potential for greater results.

Linda Boff, executive director of global digital marketing at GE, explains that it’s more Consider Wine Enthusiast magazine. Sure it’s a media company, but it’s also a brand. By incorporating custom content, Wine Enthusiast successfully increased site traffic by 154% and boosted monthly email opt-ins by 50%. Director of Internet Marketing Erika Strum tells MarketingSherpa:

We put time into creating… content that helps people either make a buying decision or entertains them. Even if they aren’t making that purchase in the moment, we feel that they will come back to us as a… source of information.

Rubel has identified three ways that brands are partnering with media companies—syndication, integration, and co-creation. These partnerships borrow from traditional marketing models like paid media and product placement, but they now overlap with owned and earned media as an additional driver of revenue.

• Syndication: Rubel describes this method as “advertorial reinvented.” Sometimes the sponsor scripts the content, sometimes the publisher assumes this role, and sometimes they work together to design content.
• Integration: Similar to syndication, integration stems from product placement. But rather than placing a product within eyeline (think Wayne’s World) the brand becomes part of the narrative (think Mad Men).
• Co-creation: The primary difference with co-creation is that the sponsor provides the funding, but the media company takes responsibility for the content. Rubel likens this to a sports stadium. Gillette bought the naming rights to the home stadium of the New England Patriots, but Kraft Sports Group, which owns and operates the venue, is responsible for the action on the field. Okay, okay, “action” may not be what non-New Englanders would call it. But you get the point.

While many media companies have embraced sponsored content, some are still resistant. Google for one refers to this as “commerce journalism” and explicitly states on its website:

Stick to the news–we mean it! Google News is not a marketing service…. [If] we find non-news content mixed with news content, we may exclude your entire publication from Google News.

As with anything, there are associated risks. It can offer control of content, data and measurement, and opportunities for innovation. But there is the potential for backlash. You may recall this past January The Atlantic issued an apology for posting a content piece from the Church of Scientology. Readers complained that it resembled a traditional editorial, not clearly identifying that it was a sponsored article. “We screwed up,” were the words of The Atlantic‘s media relations team.

Rubel emphasizes, though, that sponsored content isn’t going away, at least not any time soon. He advises businesses to adapt to this marketing model. “You have to put a content engine inside your company. If it’s not there already, you have to think about how to get it in there.”

What do you think?

Watch Rubel’s BRITE ’13 talk to learn more about the benefits, and the risks, of these new media-brand relationships.

By Allie Abodeely

Investing in Unconventional Thinking

Some of the best brand stories emerge from unconventional thinking, especially in a market environment where pure financial wins are harder and harder to come by. Big blue-chip companies are increasingly turning to less traditional methods for expanding brand awareness and affinity by adding a more “human” touch to their marketing efforts. At the BRITE ’13 conference, PJA Advertising + Marketing’s President Mike O’Toole led a panel of marketers from Intel and PepsiCo who have invested in just this type of thinking. Panel members relayed some unique brand-building tactics and how they’re positioning themselves for stronger relationships with current and future customers.

O’Toole, host of PJA Radio’s “The Unconventionals”, started the conversation by noting some of the common characteristics of outside-the-box approaches. In particular, he highlighted the long-term nature of these initiatives, saying, “There’s a sense that if you create experiences that your customer cares about, the goodness will accrue back to you over time.” He also notes that content-owned platforms, vs. external media sponsors, have become a popular tactic in recent years. Txchnologist, an online magazine created in partnership with and sponsored by GE, is one example. Populated by a network of freelance writers and reporters, Txchnologist articles and op-eds discuss technology and innovation’s impact on modern day society. Through this vehicle, GE is able to drive conversation in the space and strengthen its position as an industry thought leader.

Another approach is to provide an outlet or resource that allows consumers to relate better to, or learn from, a brand. Both Intel and PepsiCo have heavily relied on this strategy, lending to the success they’re now seeing nearly three years after kicking off their respective initiatives. Intel’s Creators Project was developed to support new and emerging artists in music, film and design. Run by Creative Director David Haroldsen, the Project produces videos, releases albums, and builds stages for bands, among other things – all in the hopes of showing younger generations how technology enables them to reach larger audiences and celebrate creative expression.

PepsiCo, on the other hand, dedicates about 10% of its digital media spend working with startups during their nascent stages, believing that early investment in these highly innovative companies will lead to valuable business partnerships down the road. PepsiCo Beverages’ Global Head of Digital Shiv Singh tells Crain’s, “We decided to formalize a relationship, to really think about how to bring infrastructure to supporting startups, helping them help us.” Singh likened the relationship to a venture capital firm, but without the need for a checkbook. Startups benefit primarily from PepsiCo’s guidance on things like monetization strategies and marketing insights. PepsiCo team members co-locate incubator spaces, sponsor key events and broaden media relationships. In turn, these startups help develop PepsiCo’s credibility in the social and digital spaces.

Both Intel and PepsiCo have hit plenty of speed bumps before achieving the results they are seeing today. The panelists were also quick to underscore the importance of ongoing measurement. Data and findings from focus groups, website traffic, and attendance at sponsored events are critical to recalibrating program strategy where needed and helping to secure increased budget, time and credibility.

Watch BRITE ’13’s “Unconventional Marketing Investments” to learn more about how PepsiCo and Intel go beyond traditional marketing tactics to strengthen consumer engagement.

Visit Public Radio Exchange for full episodes of “The Unconventionals,” a PJA Radio Production with academic sponsor The Center for Global Brand Leadership at Columbia Business School.

BY NANDITA RAY

Gamification and the Future of Mobile Payments

Geo-gaming platform SCVNGR launched LevelUp in 2010 in response to a dual opportunity to change the payment landscape for retail brands. For retail customers, LevelUp means unlocking discounts or freebies at cafes, restaurants, workout studios around the country — similar to how Groupon, Lifebooker, Scoutmob and other online deals companies work. However, it is LevelUp’s value-add for the merchant – i.e., small business owners – that sets them apart from the pack.

Chief Operating Officer (or “Chief Rockstar” in the company’s terminology) Michael Hagan explains the concept of LevelUp as “the check-in, the challenge and the reward…in one bite” and underlines two major benefits of their app. One, LevelUp provides an option to avoid costly credit card processing fees that can end up taking a hefty percentage of small business owners’ profits daily. On top of that, LevelUp helps merchants build and strengthen their brand relationships by facilitating mini marketing campaigns which impact each patron individually. Driven by game features which customers play to unlock deals, these campaigns provide merchants a greater opportunity to capture new customers and actively change habit via incrementally better bargains upon each visit.

In a recent op-ed for Fast Company, LevelUp CEO (a.k.a. “Chief Ninja”) Seth Priebatsch attributes the growth of innovative mobile services not to forward-looking companies, but to tech-savvy consumers who place great value on efficiency – whether they realize it or not. These consumers, according to Priebatsch, are the ones dictating market disruption through casual demands, such as more convenient payment methods, security, accessibility to higher education and the ability to personalize online content. Given that viewpoint, it will be interesting to see how LevelUp and SCVNGR continue to respond to this “revolution of consumer choice.”

See Michael Hagan speak about gamification and its effects on the future of mobile payments at our BRITE ’13 Conference (March 4-5, NYC).

BY NANDITA RAY

PepsiCo: Think Fast to Keep Up with the Digital Consumer

PepsiCo Beverages’ global head of digital Shiv Singh has spent a good part of the last few years advising small businesses, start-ups and blue chip brand managers alike on how online and mobile innovations are impacting traditional marketing strategies. Along with penning the book Social Media Marketing For Dummies in 2012, the digital marketing guru has presented on the topic at high-profile venues from ad:tech in New Delhi to Austin’s SXSW, outlining what steps are needed to stay relevant and engaging in the increasingly social, fast-paced consumer environment.

To market effectively, Singh underlines the importance of real-time insights, saying, “It’s the only way to truly stay culturally relevant with consumers.” This is clearly a challenge given that marketing activities within large companies have traditionally required 9 to 12 months’ lead time before a campaign, or even a statement, goes public. This fundamental shift in process is a giant step, but if done right, jumping that hurdle can propel brands into the next level of social media savvy. Oreo’s Super Bowl Tweet in response to the power outage this year – which was retweeted 10,000 times within one hour, according to Chicago Business – was a great example of how quick turnaround can have a big payoff.

Another more recent example comes straight out of Singh’s backyard. As Digiday reported, Pepsi was one of the first major brands to jump in on the newsfeed-clogging Harlem Shake craze that appeared online in late January. With more than 44 million views on 12,000+ meme-related videos uploaded by mid-February (according to the Mercury News), the cola brand released two commercials – one featuring Pepsi, another Pepsi Max – reflecting the importance it places on pop culture and real-time relevance to engage consumers.

See Mr. Singh speak about how PepsiCo is making its brands relevant for future generations at our BRITE ’13 Conference (March 4-5, NYC).

BY NANDITA RAY