While I can speak to the marketing budget slashing issue, that’s been done to death. There is ample evidence that the marketers with the stomach to power through a downturn and maintain (or increase) their marketing investments in times like these are the ones who profit handsomely when the business environment improves.

The other issue that gets my goat is the myopic shifting of multicultural business to a general market agency. I believe that generally to be a misguided decision that will backfire.

When making such moves, the marketers generally cite the savings that they will realize by combining multicultural and general market activities in the same agency. Some openly acknowledge that the quality of the work will suffer but still opt for the short-term savings in order to relieve the pressure put on them by their finance folks. Some others have been led to believe that the quality will be the same as it was with the multicultural agency (in some cases better!) and so to the marketer it seems like a no-brainer. What folly!

For the uninitiated, this is generally what happens:

• Step One: The client finance people issue an edict requiring marketers to reduce their expenses in agency compensation (some clients do that in parallel with overall budget cuts, while others do so as a “share-of-budget” exercise, keeping budgets flat year-over-year but reducing the percentage that is dedicated to compensating agencies.)
• Step Two: Marketers contact their agencies to let them know what will be required. Some contact all agencies, others start off with their “lead” (read: general market) agencies, where the bulk of the agency fee expenditures occur.
• Step Three: General market agencies, facing the prospect of revenue reductions, opt instead for manageable margin reductions and thus offer to take on the multicultural work for the same agency fee as in the previous year (or perhaps a bit more). It goes something like “Hey, instead of cutting our fee, how about we keep it flat to last year and instead we take on the multicultural work for no additional fee (or a very small fee)? That way, you save all those fees you’re now paying the multicultural shops.”

Now the client looks at the option of streamlining his or her life by working with one agency, having one scope discussion, paying one fee, having one meeting, etc. And on top of that, they save a bunch of money! It sounds like a dream. But it is more like a nightmare. Here are a couple of thoughts for marketers contemplating such a move.

1. Ask yourself how the general agency can do the multicultural work for no incremental fee (or a very small one). The work that was being done still needs to be done. If the work can just be absorbed by the general agency, that’s a tell-tale sign that either they have been overcharging or they will put a junior person with the appropriate last name or skin color on the multicultural portion of the business and call it a day (after all, the objective is a lower price tag, not good multicultural marketing). Maybe both.
2. Ask the general agency to provide proof of the quality of the work they say they’ll deliver. Have they done multicultural work before? Are they a leader in their space? Is that their specialty? Would they know good multicultural work if they saw it? Don’t discount the importance of quality work in trying economic times. Remember that alienating a multicultural audience will cost you dearly and for the long term.
3. Don’t cut the multicultural agencies out of the conversation. Share the issues openly with all stakeholders and get everyone working together to arrive at a workable solution that achieves your cost reduction goals without gutting any one area in your marketing plan. If you have to reduce overall compensation costs by X%, see how the whole team can share the burden. (Perhaps efficiencies can be achieved by consolidations in production or by sharing resources, instead of reducing intellectual capital).

All this notwithstanding, should you choose to follow the silly notion of moving business from agency to agency, do the right thing and offer the option to everyone. That is, if you’re considering moving your multicultural work to the general market agency, also entertain the option of bringing your general market work to the multicultural shop.

It wouldn’t surprise me to see the multicultural agency, experienced in working with constrained budgets and compensation, being the best option for the overall account. They can provide the same assurances of quality on the general market work as the general agencies do on the multicultural work, and they will certainly do it for less.

Even before the US economy took its swan dive into the commode, corporate sites targeting Hispanics were few and far between. Never mind the research supporting the need for companies to have Hispanic market sites up and running, even with full transactional capabilities. Never mind the research finding that Hispanics are going online in droves and finding precious little content tailored to them. Many clients still resisted and remained general market, English-only, on the Web. This was the case even for marketers with support for Hispanic advertising. Imagine that, investing in advertising to the Hispanic market, while alienating the same consumers online.

Today’s economic realities make things even tougher. As marketing budgets get cut left and right (enough has been written about the folly of cutting marketing investment in recessionary times, so I won’t go into it here), multicultural marketing budgets commonly find themselves in the crosshairs of short-term-thinking clients. Keeping the Hispanic website becomes a line item that is often too easy to cut as companies reduce headcount in internal support staff (who’ll manage the Hispanic site now?) and overall marketing communications targeting this population (would they prioritize the website over running a few more television spots?).

Especially in these tough times, clients need to reconsider any thought of cutting the support for their Hispanic-targeted corporate website. Here are a few reasons why, some of which I alluded to above:

1. Hispanics are online. According to comScore, there were 20 million Hispanics online last month. Brands should be there too. Marketers should not alienate Hispanic consumers on the Web by providing only a general market site.
2. Hispanics who are online tend to be better-educated and have higher incomes and better credit, making the Web a bit of a filter for the cream of the crop of Hispanic consumers. Talk about efficiency!
3. There is a dearth of Hispanic-targeted content online, making any marketer’s content stand out much more than in the general market, where there’s plenty of me-too content to go around.
4. Hispanic consumers often go online to learn about the products and services they seek, even if they end up completing the transaction in offline channels. Lacking a website, where will these consumers go to get the information they need to make a purchase decision?
5. Analyzing server logs from their Hispanic-targeted sites can provide companies valuable insights into consumer behavior. Product preference, information needs, purchase behavior, and more can be gleaned from “watching” consumers on the site.
6. Marketers who cut their Hispanic sites may find their Hispanic consumers more easily swayed by the competition, which by maintaining a robust online presence for Hispanics, sent the clear message that the group is important to them.

In summary, I would strongly advise clients to not only forget about cutting Hispanic-targeted websites, but to increase the support (e.g., funding, resources) behind them. It’s an investment that will pay off handsomely in more business from this very attractive population.

Although at times the writing is uninspired and somewhat self-serving (the first third, for example, can be skipped), the authors make some interesting points about how advertising and DM have evolved in recent years. Traditionally, advertising was used as “air cover” or to “soften the market” by marching into the marketplace battleground with broadly distributed messages aimed at piquing the interest of consumers. Direct marketing, then, followed advertising, and targeted those interested folks with offers to convert that interest into actual sales.
Advertising was considered “top of the funnel” and direct marketing “bottom of the funnel” (referring to the purchase funnel). Advertising was supposed to hook them and direct marketing was supposed to get them onto the boat. Advertising affected their attitudes while direct marketing affected their behavior. You get the point.

As the authors argue in their piece, these days there is no such thing as a linear purchase cycle. There is no predictable, projectable flow of consumers from one stage (Awareness) to another (Interest) to another (Desire) to another (Action). Consumers today can go online and research brands and products on their own terms as opposed to those of marketer’s. And they do it much faster than before.

Where I disagree with these fine gentlemen is in the assertion that the two disciplines are the same. They are not. I agree that they are intertwined and that they no longer can work sequentially (but rather must work concurrently). I agree that direct marketing must play a much larger role in the marketing of a brand or product and that the role must be played throughout, not just at the end. But the same thing they are not.

The article discusses new roles for direct marketing (other than the traditional “closing the deal”). Direct marketing can improve a brand’s ability to listen to a consumer, react to the consumer, and learn from the consumer. Direct marketing allows a brand to personalize experiences and respond to a consumer’s needs more quickly and personally. Direct marketing allows a brand to take the conversation to the one-person level. All these activities and interactions contribute to the consumer’s perception of the brand and are therefore branding.

What the authors fail to address (and perhaps this is because they don’t want to get into this
conversation in public) is whether brand advertising per se is needed anymore. In this environment where (a) brand-consumer interactions are multiplied and accelerated, (b) more and more of those interactions are controlled by the consumer rather than the brand, and (c) consumers increasingly turn to peers and other “civilians” for information (and the truth) about brands, do we really need traditional brand advertising?

Traditionalists would tell you that people feel good about Nike or Apple because someone (marketers) told them how to feel. That they are good products, yes, but that all the goodwill surrounding strong brands was started by a marketer showering the masses with messaging painting the picture they wanted to be seen; telling the story they wanted to tell, the way they wanted it to be told.

From where I’m sitting, though, all that and much more can be accomplished by direct marketing, and it can be done in a more measured and managed manner, resulting in reams of actionable data that can be further leveraged in support of the brand. Perhaps that’s what the authors mean when they say that branding and response are the same. But I would say it differently. To me, branding is now just another function of direct marketing. Because doing brand advertising without a direct marketing framework these days feels irresponsible and dangerously disengaged from the real goal of all this money being spent: building the brand’s business by selling more.

It got to the point that I thought I knew more than my boss, the Account Supervisor on the business. I ran my projects well, with not a ton of supervision, and usually with no issues. I even had some minor client contact and did not embarrass myself or the agency. I thought that I was indispensable. And that’s when it started.

I began to keep my boss just a little less informed than normal, and give her information just a little later than before. I started sharing less, less often, and later. I was the keeper of the information. I had the knowledge. She didn’t. Knowledge is power, they say, so I was powerful. I continued like that for a while, almost walking on air intoxicated by my perception of power. I was like the squirrel stashing away nuts for the winter, storing away information so that I could sound smart or knowledgeable (more up to speed or up to date than my boss, even) if anyone asked anything.

Hoarding makes your cheeks floppy

Then it happened. We had a problem. A big problem. A big client problem. It was traced back to part of my work, to things that I managed. Things that I had been managing myself without sharing as much with my supervisor. All of a sudden, all eyes were upon me. Lots of questions were asked “how could this happen?” was a popular one), all the way up to the Director of Client Services. I was freaked out and afraid I’d lose my job (which made sense considering that my not sharing information had kept the agency in the dark about something that seemed insignificant to me then but to the trained eye of my managers would have meant something).

In the end, no one was fired and things were cleared up. My Account Supervisor heroically covered for me and taught me a huge lesson in the process. From then on, I was the most prolific sharer of information out there. I learned that having the information itself does not really give any power. It’s knowing what to do with it that does. It’s not about having the information and keeping it to yourself (where’s the power in that?). It’s about the power of sharing it and letting those around you know that you have it (that’s power).

I learned that the more I shared with my Account Supervisor, the more she saw how I was understanding things, managing things, and being proactive. That helped her assess my performance and it allowed me to grow. It also made my boss look good. And there I learned that making my boss look good makes me look good. It all trickles down.

Information about the client business, about a project’s status, about what someone said in a creative presentation related to our work, all wants to be free. Sharing it often with your supervisors lets them stay abreast of what’s going on (which is part of your job) and helps them help you do yours (which is part of their job).

Keep your boss informed of things so that he or she is not surprised (in any business, surprises are not exactly welcome) by any development. Keep your team abreast of what’s going on so that everyone benefits from your information and you benefit from theirs. And don’t hoard. It makes your cheeks floppy.