Marketing — Fluff or Growth?

I shared a keynote at mParticle’s 2019 Acceleration on the evolution of Marketing from a fluff engine to a Growth Engine. Many of you have asked for the content, here is a summary and the slides at the bottom. Take a read.

Why is marketing being a growth engine even a topic? Because in 9 out of 10 cases, it isn’t. It is a cost center, it is a team that spends a lot of money but has no idea what it does to the business. Marketers launch big tentpole campaigns a few times a year to create a splash not knowing if the splash moved any needle — often not even knowing which needle to move. They sit on an island not worrying about the business. In fact they don’t understand it or the consumer, what she wants, why she wants it. They say they are consumer obsessed but they are really “channel obsessed”. They organize by channel, operate by channel, partner by channel, incentivize by channel unlike the consumer who only operates around “value and experience”. Marketing is a fluff engine.

Well as a marketer though, am sure none of us believe that. We don’t want it to be that. Whatever we do and however we do it, the reason why we do it, is to impact lives, impact the business and impact the world…

Unfortunately it ain’t happening today at least not often enough. I see many reasons for it. But before I get started, I usually like to share my background and give you one last chance to stop right here, have a coffee, do something more fun because you are about to spend the next few mins listening to an engineer talk about why marketing does not work and how marketers need to UNLEARN marketing (in fact stop marketing).

Yes, I grew up as an engineer spending hours in front of a blue Turbo C++ compiler screen. As computer engineers we hated marketing and marketers. They were like sales people while we could build stuff. No surprises, my journey started as a pure engineer and technologist. Who knew I would sub-consciously make my way into the world of marketing. While I have never studied marketing, like everyone else I have been a victim of marketing (as a consumer) for many years.

Consumer Led Era

There is no doubt that this is a consumer led era. Disruption has already happened. Self-driving cars, people flying in fly-suits, press a button to order your next supply of Tide and get it in 4 hours, walk into your house and Alexa will tell you what you should do next. It’s crazy, insane and scary.

But has the world of marketing evolved with this evolution? Has it changed from the days of the Mad Men, when it was all about the Midas touch, everything you touched turned into gold. Marketing was all about the most creative and witty ad, the awards, the reach, the show. The belief that you as a brand are unique just like everyone else. More soft, more durable, more white.

The “Growth” Question Finally Pops Up

You know the industry is moving at the core when the traditional 100+ year old companies start to change (real or facade does not matter). That happened when Coke replaced the role of Chief Marketing Officer into a Chief Growth Officer. I don’t know if that changed the underlying mindset or culture or if it was just semantics. It was a sign nonetheless.

In many ways, the genesis for this growth mindset started with Facebook forming a growth team under Chamath Palihapitiya. You could argue that he was the architect who took Facebook from breaking the 100M MAU barrier (never done back then by any social networking platform) to a 500M MAU, setting the foundation for a 1B+ MAU over the next 10 years. Here is a great Q&A with Andy Johns, former product manager in that growth team at Facebook.

That success at Facebook and other product companies created a new layer of “growth teams” that sat outside the traditional Product and Marketing functions.

While that worked brilliantly for Facebook back then, it also meant Marketing and Product were not capable or accountable for growth. And they could continue to spend dollars and resources in launching features or launching campaigns, while the “growth team” would figure out a way to grow the business (drive user growth, build habits, virality, network effects and more).

Bifurcation of Marketing

As marketers we did little to prove that assumption wrong. Instead, we went ahead and bifurcated marketing into many pieces — mobile marketing, content marketing, search marketing and more recently it’s either Brand Marketing or Performance Marketing. Over the last few years, I have seen a number of founders and organizations oscillate back and forth between brand and performance. But is it really an either or?

Shouldn’t all brand effort drive performance and all performance marketing help build the brand. Shouldn’t you just “market to grow”, why else should marketing exist?

When I Say “GROWTH”, it is not limited to the quantitative growth of KPIs like CAC, LTV, CAC:LTV, MAU, DAU:MAU, Gross Margin and others. Of course we need to grow the user base. We need to grow the “user value” every single time since that is the only way for you to earn the right to bring the user back one more time.

It’s all of that “AND” growing the brand, growing that emotional underlying connection with your user base. It is strengthening that shared purpose and mission that you share with your audience. With a single minded focus on “performance” you can grow from the 0–1 stage but to get to 1-N stage (scaled growth), you need to build a resilient, purpose driven brand as the foundation.

The 3 are NOT isolated, they amplify each other and marketing has to prove that amplification, not just through a philosophical belief but through data.

CMOs need to prove the incrementality of a strong resilient brand on the efficiency and effectiveness of performance marketing

Growth is Not Owned But Orchestrated

I have nothing against dedicated growth teams, my biggest learnings have come from my experience being part of them. But I do have a problem with two types of beliefs:

First Belief, a stereotype that any single team or function can “own growth”. It is impossible. We can create that false perception but in reality scaled growth is “orchestrated and not owned” by any single function.

Scaled growth is orchestrated and not owned by any single function in an organization

You need orchestrators of growth who can ensure every team contributes to it. It is a function of many things going right from the core product to marketing to fulfillment to operations to engineering. Any broken part will impact the overarching experience, ultimately impacting growth.

In fact your internal culture is the single biggest driver or blocker of your company’s growth

Your culture needs to evolve from “my team” to “our team”, from “reporting to me” to “working with me”, from isolated teams to cross-functional outcome/KPI driven pods.

That culture within your organization can be orchestrated by HR but every single person in your organization has to own it and live it, every single day.

This is no different than building a brand — marketing is not the owner of the brand but an orchestrator of that journey. Otherwise the brand becomes a superficial layer that reflects your design system not your culture, your identity or your belief. Every function in the organization has to build that brand every single day.

Second Belief, that marketing can never be that orchestrator of growth. It has to be either the product team or the isolated growth team. Marketing should only focus on building the brand, running global tentpole campaigns. In fact in many leading product companies (cannot name for obvious reasons), marketing is only responsible for so-called “brand marketing” while consumer insights, analytics and even “performance marketing” sits with product or growth. I strongly believe that you organize around your leaders. In many of those cases perhaps that was the best path. However:

Any marketing organization that either directly or indirectly does not impact growth and/or is not held accountable for growth, should not exist.

No Smoke Without Fire — Most Marketers Focus on Outputs Not Outcomes

Having said all that, I do agree that most marketing functions focus on the vanity KPIs and impact and not tangible measurable growth. That requires a fundamental mindset shift in marketing, a shift from Outputs to Outcomes. I shared 10 principles to drive that transformation in this post.

You may or may not agree with much of the perspective but I am sure you would agree that Marketing has to become an “impact” function, not a fluff function.