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On Tuesday, I posted a first half summary of the Econsultancy Hangout I participated in with Jim Sterne and Tom Cunniff (moderated by Econsultancy’s Stefan Tornquist) on Measurement, Analytics, and Attribution.
Rather than summarize the entire second half of the Hangout, I wanted to focus part two on a great discussion we had on changing incentive structures to create an organizational culture of integrated digital marketing and attribution.
The discussion was prompted by Stefan Tornquist when he asked, “What are the internal, organizational challenges to Integrated Marketing?”
Here’s a wrap-up of our collective response:
Too many large organizations are using incentive structures that foster (dis)integrated digital marketing by issuing bonuses to individual teams based on the performance of the marketing channels they are responsible for.
Because each team (search, social, email, display, etc.) must prove their own channel’s performance for compensation, they’re thrust into internal competition and left to seek metrics and attribution models favorable to their particular channel. This creates both operational and data silos.
As Tom Cunniff put it, "each data plume creates more smoke to hide behind”.
He cautioned marketers to “beware of glowing reports, because everyone has incentive to make it look great” and joked that you’ll find “everything’s working, but sales are down!”.
While the joke brought laughs, it highlighted a serious organizational flaw that introduces a channel bias that often turns attribution into politics.
It’s no wonder that Econsultancy found that 61% of organizations spending more than $5m on marketing a year said “internal cross-team politics” was holding them back in a recent survey.
So what needs to be changed?
In order for organizations to execute effective integrated marketing, their marketing teams need to be integrated internally.
Jim Sterne was quick to point out that there has to be a culture change and adjustment of incentive structures to ensure teams are functioning in synergy towards a common goal, rather than to satisfy individual objectives.
Sterne suggests incentive structures be based on group profitability. If all teams are given bonuses according to aggregate success, each is incentivized to operate and spend in a way that drives overall marketing performance.
With a singular goal, teams would be more willing to cut back spending and shift to areas where traffic is more profitable and better integrate on multichannel campaigns.
According to Cunniff, this change would “break down silos and demand programs that are harder to attribute individually,” leading to better integrated marketing and creating the need for integrated attribution.
The best marketing is so well integrated that you can’t tear it apart to see which thing worked the best, so you have to attribute channel performance by how well it syncs with your entire marketing mix to drive sales.
Without the pressure to use reports provided by vendors with an equally-vested interest to prove their singular channel’s performance, an integrated marketer incentivized by group profitability can (and should) assess their channel’s performance using independent attribution tools and unbiased models.
Organizations focused on successful integrated marketing don’t want their marketers asking “how does my channel drive sales?” They want them asking “how does my channel interact with others to drive sales?”
Will a change in incentive structure breed a more integrated marketer? We think so.
See the full discussion on Econsultancy’s Youtube page.