Are Holdcos a running joke among brand marketers?
Opinion
It’s time for holding companies to retrain their people to understand marketing and brand building better, says Mark Palmer.
In my new book, The Work Smarter Guide to Marketing – Better Marketing Without the Bullsh*t, I reveal that we are in a crisis of understanding in marketing.
I’ve written the book for those who would like to change this in business, startups, marketing and agencies. Sophie Devonshire, CEO of The Marketing Society, describes it as ‘An invaluable, refreshing, return to the essentials of marketing – a great and useful read”
The scary truth is that most people with ‘marketing’ in their title have never been trained in it. Of the 4Ps (Product, Price, Place & Promotion), most influence only one – Promotion.
Numerous industry studies suggest that overall advertising effectiveness has declined in recent years, particularly for short-term performance marketing results.
Nike and Starbucks are just two examples of brands in recovery because previous CEOs pursued an overly pure data-, digital-, and performance-driven approach to marketing.
Nike even began calling advertising ‘demand creation expense’. When CEO Donohoe, a former management consultant and technology business leader, resigned, Nike brought back a brand lifer. The share price rose 10%.
The largest companies advising the marketing industry are undertaking their largest-ever marketing and brand reset. Omnicom has just forecast $750m in cost savings. WPP has called in McKinsey again (it did so previously in 2020).
Omnicom CEO John Wren said recently, “With the completion of the deal, Omnicom is setting a new standard for modern marketing and sales leadership — creating stronger brands, delivering superior business outcomes, and driving sustainable growth”.
If you interrogate this from a marketing or brand positioning perspective, it’s platitudinous. Regarding creating a distinctive brand positioning, if I told you WPP or Publicis had said the same, you wouldn’t be at all surprised.
No laughing matter
It’s a running joke among many senior marketers that the very companies they pay to advise on building brands and spending marketing funds, smash together their own agency brands with no more thought than which name goes first, or can I go straight to an acronym.
For years, growth strategies for holding companies have pursued disjointed, incremental brand and marketing transformations after transformation. Holding company’ value propositions’ and ‘brand positionings’ are reverse engineered as they’ve cut costs and chased margins.
Saying we offer scale and size, then digital first, then data with digital is hardly a distinctive positioning. Now it’s scale with digital, data and fewer people – justified by AI.
As marketing has become more complex, the Holdcos have made it more complicated. They’ve siloed their people into specialist skill sets and disciplines. Even though they own creative and media companies, a whole generation of media people has rarely worked with creatives, and vice versa.
As Holdcos execute their latest change, apparently without consulting their customers first, it’s fair for a brand to ask: if I asked the people in your organisation the question, ‘what is a brand?’ or ‘what is marketing?’… how many would stumble? My guess is a lot.
When Howard Schultz returned to Starbucks in 2008, he famously shut down all stores for a day to retrain baristas on the art of making espresso. It was a symbolic act to admit and then fix that it had lost its core expertise.
If a holding company really wants a transformation that engages with brands in how it delivers quality and authenticity in marketing services, it’s time to cut the bullshit and retrain all its people on the proper understanding of marketing and brand building instead.
Mark Palmer is the founder of Maverick Planet – a facilitated strategy & brand change consultancy. He also guest lectures in marketing at London Business School, University College London, Henley Business School & The School of Communication Arts.