An interesting change is developing within the internet industry. Companies are starting to really value and appreciate brand marketers. It wasn’t always thus.
If you went back in time to 2005, the landscape would have looked very different. The hubris and excess of the dotcom bubble was over. Investors had been burned by some of the excesses of that time, and many internet companies struggled to justify their valuation or in many cases very business model.
The internet sector was much more nascent, and many rising businesses were led by technical founders, more naturally attuned to data than feel. Companies started to invest much more heavily in both paid and natural search, as well as using broader display advertising and affiliate marketing channels. Certainly within venture capital backed internet companies, there was a mistrust of brand marketing – perceived as not necessarily wasteful, but often unmanageable and risky.
Worse, there seemed to be a gulf between brand and performance marketers. Years of thoughtful training, often in FMCG environments, didn’t really provide those marketers with the sort of technical knowledge that effective performance marketing required. Where brand marketers were hired, they were often kept away from owning acquisition or CRM. CMO roles seemed a more natural home for a performance marketer – after all, they could have a Head of Brand Marketing report to them, and that might be less risky than the other way around.
But even then, if you looked under the covers a little, you could see some of the changes that would later emerge.
The internet sector is not a homogenous thing – rather, it contains different subsectors and strands, and levels of maturity within. Whilst the internet sector in 2017 is no doubt more mature than in 2005, there are nevertheless new products and industries that will be brought online, and new business models that will be tested.
Back in 2005, two subsectors stood out as being the most mature in the internet sector; online gambling and online travel. Interestingly both sectors contained the highest proportion of brand marketers relative to their peers.
Whilst many of those more brand oriented marketers found it challenging to own performance marketing, they nevertheless played an essential role in building their businesses. During the early days of building a new online category, trust must be established. Whilst it seems trivial now, to encourage the consumer to abandon the safety of the high street travel agent and spend hundreds or perhaps thousands of pounds online required building trust and a sense of legitimacy. Online gambling and travel companies have essentially similar products, and therefore a lot of the softer, more emotive aspects of the customer relationship were important.
If we look forward to 2017, brand marketers are increasingly in demand as internet and mobile businesses seek to differentiate themselves. The rise in performance marketing has led to increased acquisition costs as companies bid on the same keywords or compete for attention in app stores. Whilst the cost of performance marketing acquisition channels can easily be measured, many companies are noting their rise.
A shift in mentality has occurred – with more traditional channels such as TV and radio proving arguably undervalued. Trivago in particular has notably grown very strongly due to extensive TV advertising and going therefore somewhat against the grain of traditional wisdom.
Today’s internet brand marketer is a somewhat of a hybrid – able to understand digital acquisition and CRM, as well as online product management. After all, brand marketing in many internet businesses is everything from how you present your products or services online through to every customer interaction. In this context, it’s vital that the brand marketer has a good understanding of performance marketing.
For now – there is perhaps an imbalance. As the pendulum swung perhaps a bit too far towards performance markters, now it must swing back the other way. There will increasingly be opportunities for brand marketers to become CMOs.
I’m not convinced that FMCG companies or creative agencies can adequately prepare brand marketers for life within an e-commerce, or other performance marketing driven business. By its nature, if your company doesn’t sell a product or service online, performance marketing is somewhat peripheral. If you don’t understand acquisition and retention across the relevant channels in your sector, transition will be tough. Today’s internet brand marketers have often moved into the internet space relatively early in their career, and have therefore been able to develop a balanced skillset.
Peter Franks is a partner with Neon River, a next generation executive search firm specialising in the internet, software, and technology sectors.