The most perfect union: Unlocking the next wave of growth by unifying
creativity and analytics
Companies
that harness creativity and data in tandem have growth rates twice as high as
companies that don’t. Here’s how they do it.
“Ideas and numbers” have always had an uneasy
alliance in marketing. To creative directors, designers, and copywriters,
creativity is an instinctual process of building emotional bonds with
consumers. Bring in too much quantitative analysis and the magic dies.
“[As marketers] we have to understand and
connect with customers,” the CMO of a hospitality company recently told
McKinsey. “I’m afraid the data people will win, and it will all become a
commodity if brand and creativity don’t matter anymore. I’m afraid the creative
process will lose its soul.”
Despite such
understandable concerns, the notion that creativity and data are adversaries is
simply outdated. Combining the power of human ingenuity and the insights
gleaned from data analytics is a good start. But the best marketers are going a
step further and integrating this power combo into all functions across the
marketing value chain—from brand strategy and consumer insights, to customer
experience, product, and pricing to content and creative development, media—even
measurement. Far from robbing a brand of its soul, this fusion of skills and
mind-sets is an essential part of the modernization of marketing to drive
growth.
As part of an ongoing
series of studies in conjunction with the Cannes Lions Festival and the
Association of National Advertisers, McKinsey recently surveyed more than 200
CMOs and senior marketing executives (including interviews with 25+ of the
CMOs) and tracked the performance of their companies. We found that marketers
who are what we call “integrators”—those who have united data and
creativity—grow their revenues at twice the average rate of S&P 500
companies: at least 10 percent annually versus 5 percent. This is a welcome
development for CMOs, who no longer see themselves primarily as stewards of the
company’s brand, but as drivers of company growth. One CMO told McKinsey that
he has shifted the entire C-suite’s view of marketing spend from a P&L
expense to an investment the company is making in its future.
The study also revealed
that while marketers rarely consider their creative output “world class” or
“iconic,” those integrators with the 10+ percent growth see their efforts as
“engaging,” “unique,” and a core contributor to the creation of brand equity.
Some go so far as to call their creative output a key part of what sets them
apart from competitors.
Here are three distinct
ways in which these integrators are modernizing marketing:
1. They treat creativity and data as equal partners.
In companies that are
integrators, creative functions are becoming more data driven, and data-driven
functions are growing more creative. Two areas where we see this happening most
clearly are customer experience and consumer insights.
First, customer
experience: Historically, this is a function overseen by people who think
creatively and strategically about how to meet and exceed customer
expectations. But today, data analytics can uncover customer intentions,
triggers, and interests that reveal subtle pain points and unmet needs. We
found that the integrators in our study continuously and rigorously mine for
such insights as part of the day-to-day process of improving customer
experience instead of using analytics in a separate, adjacent process. On
average, they use four or more types of insights and analytic techniques, both
traditional (focus groups, primary research, third-party research) and data
driven (customer-journey analytics, advanced analytics, and artificial
intelligence), whereas their non-integrator peers use three or fewer. A
majority (70 percent) of integrators employ advanced analytics for consumer
insights, compared with only 40 percent of companies with average growth. And
65 percent of integrators use customer-journey analytics, versus 50 percent of
average growers. We call this latter category of companies “isolators” because,
while they are using both data-driven and creative processes, they are doing so
in isolation without integrating them across their marketing functions. The
final category in our survey is “idlers”: companies that are growing 3 percent
a year or less and have made insignificant progress in utilizing data-driven
marketing practices.
At the same time, all
this information about customers, traditionally the domain of data scientists
and other left-brained talent, is now being utilized in collaboration with
people in creative roles, such as content producers and experience designers.
Moving advanced consumer insights out of the background and onto the dynamic
front lines of customer engagement gives analysts a new voice within the
creative process. They participate in the process of making their work come to
life—a new campaign created, an email test sent to a new customer segment, a
new on-site or in-store experience deployed. This fosters a sense of
empowerment among analysts and helps uncover ideas that would otherwise never
see the light of day.
2. They make integration a way of life through an agile
marketing operating model.
Integrators have set up
structures that allow them to innovate more effectively. At a higher rate than
their peers, they have embraced agile marketing and have created small, nimble,
cross-functional, colocated, and relatively autonomous teams that execute on
single, laser-focused business objectives. Staffed with talent from throughout
the marketing department and other areas of the organization, such as IT and
operations, these agile teams (or “squads”) enable people with different skills
sets and backgrounds to sit side-by-side and collaborate with each other on a
daily basis. This model brings several marketing functions into a single high-performing
team that provides the
IT and operations resources needed to bring new ideas to market. In addition,
there are typically resources from legal and finance on call to support quick
decision making.
This daily and tangible
integration bears fruit in three important ways. First, data experts are part
of the front-line marketing team. Second, integrated agile teams are able to do
more faster. The absence of bottlenecks such as inter-departmental approvals
enables frequent and rapid testing of new ideas, content, messages, and value
propositions. As a result, the process of creating new campaigns or marketing
initiatives often shrinks from months to weeks or even days. Over the last 12
months, integrators in our study were twice as successful as isolators at
significantly increasing their speed to market for campaigns or marketing
experiments and four times more successful than the idlers.
Finally, there is a
quicker and more seamless implementation of technology solutions, thanks to a
closer collaboration between marketing and IT. Half of the integrators in our
study say that marketing and IT work together on a shared vision, versus 22
percent of isolators and 4 percent of idlers. Integrators also use A/B testing
68 percent more often than their peers and are 83 percent more likely to have
adopted dynamic creative optimization, a technology that enables modular and
dynamic personalized ads and content based on data about the individual
consumer. At the other end of the spectrum, 52 percent of companies with the
lowest rates of growth admit that their CMO and CTO rarely interact. This lack
of coordination takes a toll on the entire marketing organization’s ability to
deliver omnichannel customer experiences and to track and measure performance
in proliferating channels.
3. They seek “whole-brain” talent.
Hiring an award-winning
creative director or a top-flight data scientist used to be enough to up the
ante in a marketing department’s ability to improve performance. Integrators
are now looking for something different. They want talented people who have
both left- and right-brain skills, even though their primary function will
utilize one more than the other. “There's a misconception that our engineers
are not creative and are just ‘numbers guys’,” the CMO of a leading tech
company said. “Actually, they keep us on our toes because they're so creative.
They have extraordinary imagination and turn code into extraordinary products.”
Additionally, integrators are focused on finding and nurturing people nimble
enough to work with colleagues who have different skills and mind-sets than
they do.
To ensure that this
valuable talent pool has full control over its work product, integrators are
increasingly bringing certain marketing functions in-house, particularly those
closest to the customer experience, such as consumer insights and data
analytics. And because rapid experimentation and testing and learning with new
campaigns and designs is so critical, they are insourcing more digital media
and content-creation roles. Integrators are the least likely of the three
groups we’ve defined to have one large, full-service ad agency, preferring to
use one or more boutique firms that specialize in emerging channels such as
augmented and virtual reality, or such innovative capabilities as
voice-activated commerce .
Even these leading
marketing organizations don’t often achieve their ideals for the recruitment
and nurturing of top talent—most say that their talent is somewhere between “on
par with our competitors” and “better than competitors but not best in class.”
Yet they have a clear understanding of the types of people they want, and they
aim high to get them.
Room for improvement
Although the
integrators in our study excel in data-driven customer experiences, creative
use of consumer insights, implementation of agile working models, and
collaboration between marketing and technology staff, virtually no companies in
our survey stood out across all of the capabilities needed to maximize
creativity. There are several for which most companies have much room for
improvement, particularly in the area of talent acquisition .
Measurement
Most companies can
track the impact of specific marketing components in direct-response channels
such as email and search-engine marketing but struggle to holistically measure
channels (both online and offline) andattribute the success of a campaign
to individual creative, content, and messages. Addressing this challenge
requires a “mash-up” of existing technologies and approaches like media-mix
modeling, which tracks both online and offline marketing channels; multitouch
attribution, which allows companies to track the addressable touchpoints across
a customer’s journey; and advanced machine learning, which helps combine the
two and use adaptive modeling to forecast the impact of shifts in marketing
spending. At the moment, very few companies are doing any of this. Even among
integrators, only 33 percent say they have the ability to track the ROI of
their creative content for all campaigns and in all channels (versus 15 percent
of their peers).
AI-driven consumer insights
Artificial intelligence
(when thoughtfully applied to protect consumer privacy) can help marketers
learn things even the most creative humans can’t. By using natural-language
processing, for instance, companies can figure out that a consumer is
interested in sports cars without the person ever having said so. Computer
vision can analyze the videos and images people engage with and infer relevant
themes and interests. This deeper understanding of consumer interests,
motivations, and attitudes can help develop new value propositions, campaigns
and experiences and can drive a pipeline for new products, product extensions,
and ecosystem plays that wouldn’t be obvious otherwise. Yet despite this
potential, only 25 percent of integrators are employing it, versus 10 percent
of isolators .
New and creative use of media
All the marketers we
surveyed and interviewed, integrators included, felt they were not being
creative enough in using media channels, whether dynamic video ads based on
content a viewer has watched, mobile video, addressable TV advertising, digital
billboards, or custom content integrations with big traditional media players.
Aware of the need to engage with their audiences in new ways, traditional media
companies have created new ad formats and invested in branded content studios
that use their storytelling capabilities to help marketers create more
immersive brand experiences.
And despite years of
lip service to the need for digital-first content, a majority of companies are
still repurposing content and campaigns from traditional channels. This
represents a missed opportunity for mobile-tailored ad experiences, heightened
consumer engagement with the content, and personalized experiences across all
addressable channels.
One CMO in our survey
said, “You don’t create exciting things for people by figuring out things from
data.” Actually, we believe that’s exactly what data can do. At the end of the
day, analytics are what companies have learned about people's behavior. Such
insights can guide and inform where imagination needs to go. In the best cases,
they can even inspire. Marketers that are leading the pack in driving growth
understand that data and human ingenuity are two sides of the same coin.
By Brian
Gregg, Jason
Heller, Jesko Perrey, and Jenny Tsai
https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/the-most-perfect-union?cid=other-eml-alt-mip-mck-oth-1806&hlkid=fd643b91c9a645cda20ed07dc1fe6799&hctky=1627601&hdpid=bf9795c7-a8fa-4516-a1cd-96bd26c6f68c
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