@TimSuther conversation with Argyle - June 2011

Argyle Conversations
by Argyle executive Forumsm

featuring

Tim Suther
Chief Marketing Officer
Acxiom

&

Emily Cavalier
Senior Project Manager
Argyle Executive Forum

On May 5, 2011, Tim Suther, chief
marketing officer for Acxiom, and
Emily Cavalier, senior project manager
for Argyle Executive Forum, spoke about
the shifting balance of power between
brands and consumers.

A r g y l e Co nv e r s a t i o n s
Page 2
May 5, 2011

Tim Suther Timothy Suther is Acxiom’s chief marketing officer and senior vice
president. He joined Acxiom in 2005 and is responsible for the company’s
global marketing, strategy and business development activities. Previously,
he led the company’s worldwide digital, agency and multichannel marketing services business.
He has more than 28 years of experience driving transformational results at the intersection of
data, marketing and technology.

He is a member of the board of advisors for Loyalty 360, and the North American advisory board
for the CMO Council. He is also a former member of the executive board of directors for the Sam
M. Walton College of Business Center for Retailing Excellence at the University of Arkansas, and
the former co-chair of the DMA’s iDirect Leadership Committee.

A critically acclaimed speaker and author, Timothy regularly presents on breakthrough
performance at leading global events, including Forrester Research Forums, Wharton
Marketing Conference, World Financial Symposium, CMO Leadership Forum, ad:tech,
Direct Marketing Association, and the Australian Direct Marketing Association. He has been
published in CMO.com, Knowledge@Wharton, 1to1 Magazine, eMarketing & Commerce, DM News,
and Direct Magazine.

Emily Cavalier Emily Cavalier manages programming, client projects and
client care at Argyle Executive Forum. She has been with the firm for
over four years. Argyle Executive Forum is a professional services
firm that convenes and connects business leaders from highly targeted business-to business
communities for strategic collaboration and business development. Over 30,000 executives
participate in one or several of Argyle Executive Forum’s communities with over 500 new
members joining every month.

Prior to joining Argyle Executive Forum, Emily was a business journalist at Business New
Hampshire Magazine and daily reporter covering local government, business and crime at The
Telegraph (Nashua, NH). She holds a Bachelor of Arts from the University of New Hampshire and
a Masters of Science from the Medill School of Journalism, Northwestern University.

w w w . A r g y l E F O r u M . C O M
A r g yl E E x E C u T i v E F O r u M 122 w E S T 26T h S T, 2N D F lO O r N E w yO r k , Ny 10001

Page 3
May 5, 2011

EMILY CAVALIER: We live in a world where consumers, rather than brands, are in charge,
with virtually unlimited information in their pockets. In this environment, what capabilities do
marketers need to cultivate in order to drive high performance?

TIM SUTHER: If you think about the relationship between consumers and brands, 20 years ago,
brands held all the power. There was no ability for a consumer to do a price check; there was no
ability to see how other consumers had rated their experience; there were limited places to access
information. Now, the balance of power has shifted. In a world where consumers have virtually
unlimited options, and incredible amounts of information about price and experience, what do
marketers need to have at their disposal to compete and win? At Acxiom, we’re blessed that we do
business with more than 8,000 brands around the world. We design and execute 350,000 campaigns
a year and may see 24 trillion consumer interactions. There are some repeatable capabilities that
these brands have been able to leverage to be successful.

The first capability is about reaching and
engaging your audience. Major brands “Defining a great customer needs to be
invest huge amounts of money in their dependent on three things—what they do
attempts to understand the future behav-
ior of customers, but unfortunately, they
with you, how they’re feeling, and what
usually leverage it in a very limited way. they’re doing elsewhere. We describe that
With advertising, for example, brands as multidimensional insight”
should use what they have already
determined as a great customer based on the $100 million or $200 million they’ve invested in
market and customer insight. That should be the vehicle that drives advertising, not what the
broadcast network says—or what anyone else says. So the first capability is really about brands and
advertisers leveraging the proprietary insight that they’ve cultivated over the years and using it to
reach and engage their audience. We like to describe this concept as the transition from broadcasting
to narrow casting, reaching just the people you want, when you want, and in the format that you want.
In an era of addressable media, this is now possible.

The second thing is what we describe as multidimensional insight. Everyone wants the easy button.
They want to be able to find that one thing that reliably predicts what consumers are likely to do.
Unfortunately, it doesn’t exist. It isn’t just what consumers do; it isn’t just what they say.
Consumers have a hard time actually saying what they really want. I think the research says around
90% of Americans believe that they are above average looking or of above average intelligence,
which is a mathematical impossibility. Another common misconception is that the only thing that mat-
ters is what people do online. Defining a great customer needs to be dependent on three things—
what they do with you, how they’re feeling, and what they’re doing elsewhere. We describe that as
multidimensional insight.

The third capability is about a marketing central nervous system. This is the underlying technology
that allows insight to be scaled. Traditionally, marketers have thought about what they’re going to do
to customers. But in today’s environment, we need to also sense and respond to what consumers


Page 4
May 5, 2011

do on their own. In a world where there are 500 billion consumer-to-consumer conversations about
products and services happening every year, that bi-directional flow really needs to be there. You
have to have ambition about what a marketing program should achieve, but you also have to have
this sensory insight regarding what consumers are doing on their own.

The final element is the moment of truth. If you don’t apply all of these things at the moment of
truth, when the consumer meets brand, you’ve lost the battle. The fourth capability is the ability to
personalize and coordinate the experience across the consideration journey. This is institutional
memory and it is the vehicle where it all comes together—providing a delightful experience for the
consumer so that she rewards you with her business today and in the future.

What is the upside opportunity?

Across major brands, we feel that it’s in the range of 15% to 30% for most organizations. That’s a
big number, based on the amount of spend that is placed every year in advertising. We’ve worked
with three brands that each drove more than $100 million in return. I’m also basing it on research
conducted by Acxiom, and an independent study of 30 major brands spending a billion dollars of
live advertising with proper measurement. That study concluded that a full 37% of advertising in this
country was wasted. Wanamaker famously said half of advertising was wasted, but he didn’t know
which half. Well, the accurate number is 37%, which translates into $112 billion in advertising wasted
every year just in the United States, so 15% to 30% is a pretty good number.

Marketers are shoppers just like the rest of us in the sense that they have to choose which
solutions to offer clients. How can they prioritize these choices?

It’s never been harder to be a
marketing executive. It seems
“If you have created brand advocacy with a as though everyday there’s
customer, the most important thing you can something new. There’s a new
do is nurture that advocacy to encourage media option, a new piece of data,
that customer to stay longer, buy more, and a new ad format, or a new creative
recommend your brand to their friends” idea. It can seem overwhelming.
We think there are five things that
a marketer can do to prioritize the
options. The first is what we describe as harvesting the latent value of those who know and trust you.
If you have created brand advocacy with a customer, the most important thing you can do is nurture
that advocacy to encourage that customer to stay longer, buy more, and recommend your brand to
their friends. Tactics for harvesting latent value should be personalized, integrated and longitudinal,
around events that are meaningful in the customer’s life or in your product lifecycle.

The second item is capitalizing on the phenomenon that we talked about earlier: It’s not just about
what happens “here;” it’s about what happens “there.” If you are connecting better and nurturing
advocacy with your customers, don’t stop by doing it just when she’s on your website or in the


Page 5
May 5, 2011

store. With mobile, we have the ability to connect through the device that she carries around in her
handbag. The third area is harvesting intent. Many firms do a great job of building awareness and
creating favorability, but there’s leakage in that funnel. There are barriers that get in the way of
actually consummating a purchase. Understanding what those barriers are and remediating them
is what we mean by harvesting intent. That means making sure your awareness campaigns have
actionability, that when your consumer engages you personalize the experience, and if you don’t
close the deal, that the marketing program follows up on the intent.

Number four is about smarter demand
generation. We all know that some “Organizations would be well served to
customers are worth more than arbitrage media based on real consumer
others, yet most firms rarely take
into account the likely profitability of
preferences and behavior”
customer relationships. Half of the
checking accounts in this country are unprofitable. Despite this, so many organizations are focused just
on acquiring new accounts. Never mind that 250,000 of your 500,000 new accounts will be unprofit-
able. Smarter demand generation is about leveraging proprietary insight right away in the demand
generation process. The final point is about channel and media optimization based on real consumer
behavior. Most organizations take a very blunt-object approach to planning for media. They lay out the
whole year ahead of time—but real consumer preferences change during the year. Organizations would
be well served to arbitrage media based on real consumer preferences and behavior.

How can marketers rank themselves against their peers?

That’s a great question, and one that I hear frequently from marketers. We’ve actually developed a
checklist of requirements that will allow a brand to assess where they are in comparison to those four
sets of capabilities that I mentioned earlier. We don’t have time to go through all of them, but I’ll give
you just a few examples. We talk about reaching and engaging your audience, to which everyone says,
“Of course I’m doing that.” Most likely, it’s not the case. The only reliable way to really know that you’re
reaching and engaging your audience is if you are taking data from that $100 million or $200 million
dollar investment you’ve made in your own proprietary market and customer insight. If you’re not doing
that, you are in all likelihood not reaching and engaging your audience. You’re reaching and engaging
someone else’s interpretation of your audience. That distinction is what generates a lot of waste.

In the area of multidimensional insight, the question I would have is, have you put in place the
necessary foundation to connect your primary research to behavior you see and behavior that’s
happening elsewhere, particularly online behavior? That’s a good test. As it relates to your market-
ing central nervous system, a great test is whether you have an identifier on your data stores about
customers that is standardized and integrated. If I have a relationship with my customers, do I really
have the ability to assimilate information about my customers into one cohesive spot? Mind you, it
doesn’t have to be physically all in one database. It might actually be in 50, but you just need a way
to quickly assimilate the information so that you can provide a logically unified view of the customer.


Page 6
May 5, 2011

Finally, regarding personalized and coordinated engagement, ask the following: Is it integrated
across channels? Is it longitudinal? Is your communication with the customer connected to previous
experience? Are you using triggers in her lifecycle or the product lifecycle to drive the communica-
tion? Opposed to “pushing” what the brand wants, you really want to think about “pulling” from what’s
important to her.

In what ways is tomorrow’s integrated marketing mix different from where we are today?

At a macro level, marketing and advertising traditionally has been based on consumer attention.
You want to have advertising that comes in a format where consumers are actually paying attention.
Today there’s an enormous mismatch. For example, the amount of time that consumers spend
online is pushing 40% of their media-consumption time. Yet, the amount of money that marketing
organizations spend online as a percent of their total budget is somewhere in the low teens. There’s
a pretty big disparity. One industry firm has said if those two things were in balance, $50 billion would
move into the online space, primarily from television, magazine and newspapers. I think we’ll see a
continued, aggressive increase in budgets for Internet-based advertising.

Mobile, particularly for firms that
have a large physical presence, “If marketers can create a compelling brand
is a potential game changer. experience, let’s curate that experience and
It’s often said that the offline
world is going digital and the
make it really easy for consumers to tell all their
digital world is going mobile. The friends about it. The consumer becomes the
intriguing part is that the mobile hero of the story”
world is actually coming back to
analog, with tablets and in-store experiences. This creates a good consumer experience opportunity
and a good marketing opportunity if done correctly. Another thing I think we’ll see is a rebalancing
between paid and earned media. Advertisers will act like publishers, getting really solid on content,
and paid media will decline while earned media increases. This brings us back to where started,
talking about how consumers have the power. If marketers can create a compelling brand
experience, let’s curate that experience and make it really easy for consumers to tell all their friends
about it. The consumer becomes the hero of the story.


@TimSuther conversation with Argyle - June 2011

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@TimSuther conversation with Argyle - June 2011