Marketing used to be about the 4 Ps of price, product, promotion and place. But that isn’t the case anymore. In a world of increased connectivity and more options than ever before, marketing is no longer the same. This interview looks at the evolution of marketing as a function, and how it is reflected on the client and agency side.
We spoke to Hossam Dabbous, vice-president, Beverages Category, PepsiCo Middle East and North Africa.
How has marketing changed?
- A perfect balance between art and sciences
It’s no longer only about data; it’s about consumer engagement, authentic storytelling and empathy. There is a vast amount data in the marketplace, but very few brands seem to know how to utilize it effectively. Just observing your target market and collecting data isn’t sufficient, marketers need to develop real, usable insights from that data and use it to gain empathy with customers.
- Fake vs. real connections
Audiences seek a deeper, more relevant connection with the brands they engage with. Brands cannot simply fill an everyday need, they need to have a bigger role in their consumers’ lives. The brand experience has changed. It’s about designing a sensory experience that brings a person into a lasting and meaningful relationship with a brand.
- Consumers with a conscience
Today’s consumers are changing, and their values and sensibilities are changing as well. They value authenticity, social awareness, and meaningful engagement, which cannot be imitated or faked. They are attracted to inspirational organizations, and they want to know that their money is contributing to ethical, responsible, and sustainable businesses. In other words, they’re seeking more of a relationship from the brands they choose to support.
READ: What is “purpose-driven” marketing and who is practicing it?
- Consumers know how to avoid ads
They’re also warier. They use ad blockers. They are much more fluid in their ability to blur demographic lines. In short, just because you build it doesn’t mean they will come. They use technology to block repetitive one-sided advertising.
- Experiences versus material things
Consumers are also much more interested in collecting experiences rather than “anything else in the value chain.” They’re increasingly realizing that experiences drive long-term well-being. To connect with them, marketers have to offer a unique and engaging experience that will echo these sentiments.
- Technology should be at the forefront of a marketing mental bandwidth
Marketers should be at the forefront of technology and artificial intelligence. Tools are available for marketers for optimization, targeting and listening capabilities. We need to look into trends and social media listening. Today we listen to consumers and address their needs and understand the ins and outs of the demographics of each sector. Brands are becoming more ‘social’ and are turning away from the professionally polished/formal approach. Consumers are looking to targeted, scaled-down messages, which are simplified and direct. I do not take my GRPS/digital impressions to the bank, it is about the brand equity. ROI is important to justify the costs.
- This has become a mobile-first region
The digital world has transformed the way in which we market products to consumers, whether we’re doing so through e-commerce or traditional means. There are almost 146 million internet users in the Arab World, with an internet penetration of more than 58 percent. More than half of all internet users in the region are on Facebook – around 58 million of them, to be precise, and that’s not even taking into account the other social channels available here. This region has the two countries – UAE and Saudi Arabia – with the highest smartphone penetration rates in the world, too, which truly shows how consumers are adopting connected technology.
READ: 83% of marketers said they’d raise their mobile marketing budget. Then why is mobile ad spend low?
We live in a digital, all-access, anytime, anywhere world, and therefore marketing has to be tailored to match that. Take, for example, our recent Ramadan campaign, which falls under our theme “Let’s Get Together”. This is a theme we’ve implemented for several years now, but this time we really played up the digital aspect with a campaign that required three smartphone users to come together, in order to watch a full video split across three screens. Digital gives us fantastic prospects for creativity and breaking boundaries, and we’re excited to see how much further we can push the limits.
- Two-way relationship between marketers and consumers
We no longer live in a passive environment where communication is pushed onto consumers with no feedback or insight into how our messages are being received. In fact, the relationship has become more interactive and has given consumers and key opinion leaders a very active role in shaping and molding campaigns, and even products, thanks to social media platforms. We’ve been able to use feedback from consumers to develop new products around the world.
What are the new functions, challenges, and opportunities that marketing as an industry faces?
Function
- More time dedicated to digital than print space
With the constant innovations in social media, mobile technology, SEO, and data-driven marketing, marketers now devote more than 45 percent of their time to digital endeavors.
We have built strong in-house capabilities, which redirect the role of marketing teams towards strategic advisory and big campaign involvement. In some cases, certain skills have become an in-house requirement for our companies worldwide, such as consumer engagement, brand activations, brand PR, e-commerce, and social media management. Brand guardianship was outsourced to agencies. Today, our success lies in hiring subject matter experts in the field.
Challenges
- Quality content is key
READ: Where to spend your marketing budget in 2018?
With so many marketing professionals sharing content, the sheer amount of it is turning people away. It is not about pushing lots of content online, it is about focusing on high-quality content that adds value to readers.
- Increase and heightened fragmentation
As the number of platforms and ways to promote content rises, it is becoming increasingly challenging for marketing professionals to focus their efforts.
- Slowing economies
In the current economic headwinds, we need to maximize returns on investment and get the most value out of our marketing methods.
- The need to continually adapt
The sheer velocity of technological advancements means marketing professionals need to continually seek innovative and new ways to engage with their target market. It is crucial to keep abreast of the latest advancements in the digital arena and develop strategies to stay relevant.
Opportunities
- Laser sharp focus on ROI, optimization and productivity
The multinational advertising and marketing (A&M) budget spend has changed significantly. Our strategy for A&M is to cost optimize to its full potential, focusing on pushing earned media traction and building the emotional bond that will drive our brand equity numbers higher. We are also able to monitor and quantify our outreach much more accurately than we ever could in the past, using advanced social media and media tools that provide analytics to ensure our teams hone their skills at optimizing (i) addressable audiences, (ii) personalization and (iii) creative effectiveness.
The transition into digital has empowered us in so many ways. For example, it is helping us to better understand consumer sentiment towards our products and brands, while enabling us to build important programs that support our position as a responsible food and beverage company.
- Amplifying diversity among industry talent
Today, the market is decidedly different. The Middle East has become increasingly diverse, therefore to cater and market to this region, we will need to increase the diversity of our teams. A diverse team of people who understand the different cultures, values and ways of interacting can help the company engage with a diverse audience and reach new customers in different cultural, ethnic, or social groups.
- Choosing the right agency partner amidst a growing industry
While interaction with consumers can be conducted through various mediums, all pathways seem to lead to the digital platforms where they are most vocal. This funnel effect places tremendous pressure on the need to respond to consumers quickly, especially through social media. The need to respond promptly has led to new ways in working with agencies, who now act more like strategic partners, which has, in turn, led to migrating the important challenges that our industry faces. Therefore, finding the right agency is key in ensuring consistent messaging and strategy.
- Responsible marketing
Today, we have an abundance of tools to help us affirm the relevance of our category efforts amongst target audiences. This is unprecedented and allows us to transform stakeholder engagement across all categories, be they consumers, customers, employees, government, and even competition. Consumers have a major say in the way we do business. Today, they form a relationship with companies and brands that goes beyond products or services; they want to connect to the brand on an emotional level. This means that communicating in a human-like manner, rather than in purely corporate terms, is more important than ever before. Communicating on community-relevant issues, such as sustainability programs and so on, helps to portray companies in a more approachable light.
How are these addressed and reflected in the internal structure of marketing teams? (For instance, some brands have in-house agencies; others have more specific skill sets and divisions in-house such as PepsiCo’s consumer engagement division).
- Combination of internal and external teams
We have built strong in-house capabilities, which redirect the role of marketing teams towards strategic advisory and big campaign involvement. In some cases, certain skills have become an in-house requirement for our companies worldwide, such as consumer engagement, brand activations, brand PR, e-commerce, and social media management. Brand guardianship was outsourced to agencies. Today our success lies in hiring subject matter experts in the field.
- New skillsets
In the future, companies will need to build unprecedented skillsets that translate into capable technology-savvy employees who are able to shift in the human-internet interface demands. The widespread adoption of artificial intelligence (AI) voice-activated virtual assistant technology will have major implications for almost every B2C company, but for FMCG and CPG companies the implications could be absolutely massive.
- Artificial intelligence
Ordering more supplies when one is running low by speaking instructions to a voice-activated AI tool has already become common practice in many households where AI assistants are present. It is reasonable to expect that this trend will reach significant new heights in the years to come.
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- Digital transformation
Companies that develop and implement strategies that make the most of digitization will be able to gain a foothold in the market.
How has the importance of the marketer within an organization changed?
- Marketers have become chief officers for commercial growth of the company
Today’s Marketing VP is more than an advocate for the brand, they have become Commercial Growth Officers. Our roles have changed significantly. We are taking on expanded responsibility for commercial, digital commerce, customer experience, innovation, sales, and even IT.
- The importance of marketers has risen
With the added responsibilities, the importance of the marketer has grown within companies, with several departments relying on their data and the fact that they have direct access to consumers. The role of marketer remains as important as ever. In our category model, this means taking on commercial responsibilities, which tap into new tolls that equip our marketer with new skills and capabilities. Ultimately, this means that marketers today, at least with PepsiCo, require a different skillset than they did 10 years ago. They have to be digitally savvy, for example, as well as having a great sales and financial background, plus communication skills.
What’s the future of marketing?
- Digitized shopper experience
According to research firm Gartner, by 2018, 30% of our interactions with technology will be with smart machines. There will be a widespread adoption of AI voice-activated virtual assistant technology as consumers will become more and more comfortable ordering products in this way. Already, the shopper experience is becoming increasingly digitized. Last year at the Step Conference in Dubai, we showcased our Pepsi Smart Supermarket, a cardless cashless pop-up, and the Pepsi BOT’ler, a smart butler that took drink orders from users’ smartphones. Both were well received and we expect this trend of digitization to continue.
- 5G consumer society
By 2020 there will be five generations in the workplace. In this “5G society,” people will form groups based on shared values rather than by age. This is where brand experience provides a great opportunity allowing marketers to be in the same room with their audiences and have face-to-face conversations.
- New level of personalization of the brand experience
The future sees the consumer as the star of the show, not the brand. Personalization is already expected. Hyper-personalization pairs predictive technology with data to offer a much deeper understanding of your customers. The final result is that your consumers won’t have to do any work because you’ve designed the experience to come to them.
In the future, we could be combining voice and face recognition software, virtual wallets, smart holograms, and 3D printers to provide a completely new level of personalization. One day a guest will literally be able to wander around and design their own brand experience on the go.
- Analytics over data approach
Automation and algorithm-based analyses are the future; they are already instrumental in devising and fine-tuning strategies and will become increasingly more important in developing targeted campaigns. The Internet, and the Internet of Things (IoT), will have a further impact and will see digital media become even more central in the way we communicate with consumers.
- Interruption-free experiences to gain ground
In Gartner’s recent report “The End of Advertising As We Know It”, it demonstrated a strong case for why the marketing channels which offer the most interruption-free user experiences are already making headway.
- Retaining the consumer connection in this busy world
Perhaps one of the biggest challenges we’ll face in 10 years will be the ability to tell brand stories and to own a place within the fast-changing world of digital content, while using data, digital tools and analytics to retain an emotional connection with consumers.
And finally, what will a marketing manager and team look like 10 years from now?
- New skills will be required of marketers
The subject matter expertise of a marketer should mimic the technology available at the time. Artificial intelligence will be at the forefront. A team’s skillset will have to including writing code.
- Combination of automation and human efforts
With the rise of automated processes, I do not foresee the complete elimination of humans from the process any time soon. Our MENA markets rely intrinsically on building emotional and purposeful campaigns, such as the Football National Pride and UCL campaigns launched by Pepsi, which really touched on our consumers’ interests.
