MARKETING:THE SPECTER OF RELEGATION IS HAUNTING! BACK TO RELEVANCE THROUGH DATA, TECH AND CREATIVITY

Prof. Dr. Carsten Baumgarth
Professor of Brand Management at the Berlin School of Economics and Law. He has released around 400 publications with a focus on branding, B-to-B Marketing, culture marketing and empirical research. His research has repeatedly received national and international Best Paper AWARDs.


Talking to marketing managers and marketing consultants in person, watching the OMR party in May 2022 in Hamburg (with around 70,000 participants), and observing how marketing managers present themselves on LinkedIn, one might think that the (corporate) world revolves exclusively around marketing. One may be further lead to believe that the importance of this discipline (and its protagonists) is growing exponentially to dizzying heights. However, this hardly coincides with empirical results and own observations on the role of marketing and brand management within companies. In the following paper, the situation is outlined based on empirical data, possible reasons for the findings are discussed and, above all, possible solutions are presented. The current landscape is presented in a black-and-white manner, as the article is intended to motivate people to take a critical look at their own role and actively change it.

1. Marketing only on a relegation place: status quo of marketing in the enterprise practice
For some time now, several national and international studies (Verhoef/Leeflang 2009; Verhoef et al. 2011; Homburg et al. 1999; Homburg et al. 2015, Baumgarth et al. 2015) have shown that the internal role of marketing has decreased rather than increased in recent years and decades.  Also shown is marketing playing second (or third) fiddle to those at the top level of management. Table 1 shows the development of the influence of various functions in the company over time for some selected areas.

Tab. 1: Influence of various corporate functions over time (Source: Homburg et al. 2015, p. 4)


These and other studies make it clear that the influence of marketing has decreased overall. Furthermore, these results are a first indication that the sphere of influence of marketing within companies is increasingly limited to communicative tasks and that strategic topics such as innovation or business unit strategies are dominated by other departments.

This dwarfing of marketing to communication is also shown by the study on marketing budgets published regularly by the Bundesverband Industriekommunikation (bvik). As part of this study, the marketing departments of B2B companies are asked about their areas of responsibility. As Figure 1 makes clear, these are predominantly communications tasks of a more tactical nature.

Fig. 1: Tasks of the marketing department in b2b companies (Source: bvik 2021)


Furthermore, the short duration of stay of CMOs also illustrates the relatively weak position of marketing within the company. Currently, the average length of stay of a CMO in U.S. companies is only 40 months (median: 28 months) and is thus less than half as long as that of a CEO (85 months) (SpencerStuart 2022).

Finally, the low status of marketing can also be seen by looking at salary levels in various occupational fields. According to StepStone's latest salary report (2022), the average income in marketing and PR (with an academic background) is €49,712. This is significantly lower than other functions such as human resources (€55,467), purchasing & supply chain (€58,240) or sales (€62,379).

In summary, it can be said that marketing plays a rather weak role within companies and is mainly limited to communicative tasks, leading to lower career and earnings prospects compared to other professions and functions. This is especially the case in Germany and in the B2B sector, which also predominantly includes the real estate industry. But what is the reason for marketing only occupying a relegated position?

2. Reasons for the relegation rank of marketing

2.1 Wrong profile of marketing
Marketing departments and external marketing service providers boast about their deep customer understanding (often coined as customer insights or as CX or UX) and creativity. Marketing awards are still readily and widely awarded in the scene - predominantly for creative ideas. However, are these skills relevant to the marketing department's position of power?

The aforementioned studies on the position of the marketing department within companies have also repeatedly examined which factors influence relevance at the top management level. In a study of the German B2B world, it was shown that among other things, the perception of the marketing department from the point of view of the C-level depends on the interdepartmental orientation, i.e., the cooperation with other departments such as sales, human resources management and R&D, as well as data orientation. Customer and creative orientation, on the other hand, play no role according to this study (cf. Figure 2).

Fig. 2: Influence of characteristics of the marketing department on the relevance from the point of view of the top management (Source: Baumgarth et al. 2015)


Similarly, the meta-analysis by Verhoef et al. (2011) confirmed that controlling and data orientation had a positive and significant influence on top management perception in all seven studies considered. Marketing department creativity, on the other hand, had a significant positive contribution in only four out of seven studies and even a significant negative influence in two studies. This means that the focus on the area of creativity still prevalent in many marketing departments and in the minds of marketing managers does not help to improve the position of marketing within the company.

2.2 Tech beats marketing

In 2018, the announcement by online fashion giant Zalando to lay off 200 marketing employees and replace them with computers, marketing automation and AI caused an uproar in the industry. The study by Frey and Osborne (2013) in the U.S. and the adaptation to Germany by Bonin et al. (2015), predicted the substitution of human labor by machines such as automation, AI, and robotics. This is indicative of the expected change in work overall as well as in marketing and brand work. These studies identified a high likelihood of automation and substitution by machines in the next ten to 20 years for 47% of the workforce in the U.S. and 42% in Germany. Although the risk of substitution is particularly high for employees with basic, repetitive and manual skills, the predominantly analytical and creative marketing workforce will also have to deal with the transformation of the world of work through robotics and AI. This is because technologies are evolving rapidly. Automation solutions and AI have long since ceased to be applicable only to simple and/or analytical tasks. Figure 3 shows a simple AI solution for a classic creative task in marketing, logo design. Purists will object that the logo proposal by AI is not perfect, but the technology is continuously improving. The logo development in the example took less than five minutes and cost a mere $49 (try asking your external service provider about the cost of a logo development - or rather not, as this could lead to "fee pain" along the lines of Homeday's current campaign).

1. Your input selection for LogoMaker: 

  • Brand name and slogan
  • Logo type (three types)
  • Colour code (suggestions)
  • Symbols (suggestions)

2. Individualization after creation of first design:

  • Typography
  • Size and arrangement
  • Icons
  • Container

3. Download

Logo design created by Designs. AI LogoMaker


Fig. 3: Example of an AI-Solution for a creative task: LogoMaker von Designs.AI


Today, machines can act completely automatically as chatbots, generate texts for online stores, and even write entire books (non-fiction and poetry collections). Machine learning can automatically measure and evaluate digital communication about a brand in real time (so-called sentiment analysis and social listening). Robots take over service in hotels, restaurants and hospitals. Translations by solutions such as DeepL and the development of presentation videos by Synthesia are already possible today, in a few seconds and often for free. And the technology is becoming more powerful, more user-oriented, and less expensive every day. It is still mostly dreams of the future, but in a few years, we will also have a robot in almost every household in Germany (e.g., Astro from Amazon, Tesla robot - both announced for 2022). We will also have to get accustomed to the fact that our marketing colleagues will no longer be called Müller, Koc or Nguyen, but PaLM (AI solution for speech from Google), IBM Watson or AX Semantics (AI for text generation).

However, a recent survey by the European Real Estate Brand Institute with the support of KPMG (Baumgarth 2021) shows that the level of digitalization in marketing departments in the real estate industry still has a lot of potential. According to this study, marketing departments as a whole achieve a Digital Marketing Leadership Index of 55 % (cf. Figure 4; Baumgarth/Binckebanck 2022 for details on the model).

Fig. 4: Digital Marketing Leadership-Index of the real estate industry 
 (Source: Baumgarth 2021, p. 19)


At the same time, the study was able to show empirically that marketing departments with a very high Digital Marketing Leadership Index achieve 45% higher internal success (perception from a top management perspective) and 27% higher external success (including customer satisfaction, revenue, market share) compared to departments with a very low level of digitization. 

3. Making the marketing team fit for the relegation matches

3.1 Stop complaining, accept!
A first important approach is that both marketing as a discipline and each individual marketing manager should actively deal with this scenario. Lamenting and singing about the golden age of advertising (à la Don Draper in the series Med Man) are not viable reactions. Instead of leaving new technologies to the IT department and only applauding tech in keynotes and PowerPoints, dealing with this change in a meaningful way will require you to understand and try it out for yourself. The next German Marketing Day or the Effie Gala should not be the must-attend events, but the Consumer Electronics Show in Las Vegas and collaborations with start-ups from the tech industry. New technologies must not be perceived as a threat, but as a new opportunity. An openness to technology, fun in trying things out and experimenting, the acceptance of failures and an overall desire for new things should be part of the self-image of marketing managers.

3.2 Only those who learn all the time stay ahead!
Germany still follows a very rigid learning path: school - Abitur - study - work - retirement. Other countries such as Switzerland have long since moved on. The environment and technologies are developing so quickly that lifelong learning is becoming increasingly necessary. Marketing and brand practice must have the willingness and also the time to seriously engage with new scientific findings. Science, on the other hand, in order to remain relevant or become relevant again and thus ensure its own legitimacy, must develop and use more modern forms of science communication. One medium that is new to science communication is social media. The relevance of social media as a communication channel in marketing is now undisputed, even among marketing scientists, but researchers in Germany have so far rarely used these channels for the transfer of research results. In a study by Hennig and Kohler (2020), for example, it was shown that only Twitter, at 16.1 percent, is still used relatively frequently for external communication with experts outside the scientific community among the researchers surveyed (all disciplines, Germany, n = 1,128). The other social media channels such as YouTube (1.7 percent), Facebook (4.2 percent), Instagram (1.9 percent), blogs (4.3 percent) and podcasts (2.0 percent) are rarely used for science communication with practitioners. There are also only a few best practices in science, such as chemist Dr. Mai Thi Nguyen-Kim, who is followed by around 612,000 subscribers on Instagram and around 1.45 million on YouTube with maiLab (as of May 2022). In contrast, however, a separate study shows that brand practitioners have most frequently used social media channels to acquire new brand and marketing knowledge in the last twelve months. To close this gap, the author launched the Instagram science channel "Brückenbau Marke" (@prof.baumgarth) in summer 2020, which presents scientific journal papers in a practice-oriented way in short podcasts with visual support. Figure 5 outlines the project.

Abb. 5: Instagram-Science-Chanel „Brückenbau Marke“ (@prof.baumgarth)


3.3 Develop true creativity and data literacy as key competencies!
Although the description of the situation of marketing has critically addressed the factor creativity as a competence, it will play an even greater role in the future. As a recent study by Aimé et al. (2022) also shows, marketing departments must transform themselves in two directions: (1) creativity and (2) data literacy. 

The creativity factor is not about simple creativity (AI can do that too), but about real, extraordinary and almost artistic creativity. To achieve this, marketers need to engage with topics such as ethnography, creative thinking and art in order to be continuously and intensively inspired. In the field of art, collaborations with art and with artists also present themselves, which go far beyond the simple integration of art into classic communication or art in construction (Baumgarth/Sandberg 2016). 

The second core skill of marketers in the future will be data literacy. In reference to numeracy and literacy, this is also referred to as data literacy. What is important here is that it is not just a matter of mastering individual methods of analysis, but of taking a holistic view of data. Figure 6 shows an overview of the most important facets of data literacy.

Fig. 6: Model of Data Literacy-Maturity
 (Source: based on Sternkopf/Mueller 2018)


These two future core competencies of marketing will sooner or later also lead to a dramatic change in marketing education. Conceptual-strategic thinking will become less important and creativity (including tasks such as video production) and data literacy (including tasks such as coding in the context of AI and robotics) will become increasingly important.

3.4 Understand and act instead of playing bullshit bingo!
The marketing scene is characterized by a great inventiveness of new terms and concepts. Yesterday, “Clubhouse” and “marketing “automation” were hyped, today it is “purpose” including “Golden Circle”, “brand activism” and “AI”. Tomorrow it might be “Metaverse” (or rather SecondLive 2.0) and “conscious brands”. It is good and right that new ideas are given new terms and that these are then intensively discussed and used, but an almost lemming-like behavior of running after every trend without deeper understanding without seriousness and without reflection not only harms one's own brand and the respective concept, but also the reputation of marketing within and outside of companies. According to a recent study, employees in advertising agencies rank second to last in terms of public image (very high or high image: 10%), behind politicians (22%) and civil servants (34%) and well behind garbage collectors (70%) and firefighters (94%) (Forsa 2021).

This "widespread disease" of marketing is also referred to as bullshit (general: Frankfurt 2020; Bergmann 2021) or bullshit bingo (Pirazzi 1999). A small LinkedIn survey conducted in the winter of 2021 elicited which terms were bullshit-hazardous from the marketing community's perspective. The results were then compiled into a bullshit bingo sheet for brand managers (see Figure 7). Give it a try and feel free to play brand bullshit bingo at your next seminar, webinar or conference participation. Whether you end up standing up and calling bingo depends on the context and your disposition.

Fig. 7: Bullshit-Bingo for Marketeers


Marketing managers should deal with the individual topics much more intensively, reflect more strongly on what is really new or what is only the third or fourth rehash and translate this into action. Stages should only be entered with topics when one has actually understood, tested and applied the things oneself. Talking about AI without ever having programmed one, advising on social media strategies without using them yourself, or talking about robots without ever having interacted with one for any length of time increases the suspicion of "hot air" and damages the reputation of our profession.

4. Conclusion
Marketing is in a serious crisis of meaning and identity. The internal importance of marketing has been declining for years and is increasingly limited to (tactical) communication. The reputation of marketing inside and outside companies is also at an all-time low. Finally, the salaries for marketing in comparison to other fields also prove the low relevance and esteem. With the wrong competence profile as well as the high importance of tech, two main reasons for this loss of importance were outlined. It is important for marketing managers to recognize this situation and not bury their heads in the sand. 

Future marketing managers should pay particular attention to the following skills and competencies:

  • Less talking, more doing and experimenting
  • Lifelong learning not as a freestyle, but as a duty
  • Developing world-class creativity
  • Data literacy as a basic competency for all marketers
  • Avoid bullshit - more depth and substance

In addition to personal responsibility, this stocktaking is also an appeal to all those involved in training the next generation of marketers. We as professors have not only the task, but also the duty to train the next generation of marketing managers better and differently. A "business as usual" approach will not save marketing from relegation to the second league.

________________________________________________________________________________

Literature & Links

Aimé, I.; Berger-Remy, F.; Laporte, M.-E. (2022): The brand, the persona and the algorithm: How datfication is reconfiguring marketing work. Journal of Business Research, 145, 814-827.

AX Semantics: https://de.ax-semantics.com/

Baumgarth, C. (2021): Digital Marketing Leadership in der Immobilienindustrie, Berlin.

Baumgarth, C.; Binckebanck, L. (2022): Digital Marketing Leadership – Modell und empirische Ergebnisse aus dem B-to-B-Umfeld, in: Digitalisierung - Fallstudien, Tools und Erkenntnisse für das digitale Zeitalter, Hrsg.: Schallmo, D. R. A.; Lang, K.; Werani, T.; Krumay, B., Wiesbaden (in print).

Baumgarth, C.; bvik; TNS Deutschland (2015): B2B-Marketing-Budgets 2014, Augsburg.

Baumgarth, C.; Sandberg, B. (Hrsg.) (2016): Handbuch Kunst-Unternehmens- Kooperationen, Bielefeld.

Bergmann, J. (2021): Business Bullshit, Berlin.

Bonin, H.; Gregory, T.; Zierahn, U. (2015): Übertragung der Studie von Frey/Osborne (2013) auf Deutschland, Mannheim.

bvik (Hrsg.) (2021): B2B Marketing-Budgets 2021, Augsburg.

DeepL: https://www.deepl.com/translator

Designs.AI: https://designs.ai/de

Forsa (Hrsg.) (2021): dbb Bürgerbefragung Öffentlicher Dienst, Berlin.

Frankfurt, H. G. (2020): Bullshit, 3. Aufl., Frankfurt (amerikanische Erstausgabe: 2005).

Frey, C. & Osborne, M. A. (2013); The Future of Employment: How Susceptible are Jobs to Computerization? Oxford.

Hennig, A.; Kohler, S. (2020): Einflussfaktoren bei der Social-Media-Nutzung in der Wissenschaftskommunikation. Publizistik, 65(4), 593-615.

Homburg, C.; Vomberg, A.; Enke, M.; Grimm, P. H. (2015): The loss of the marketing department’s influence: is it really happening? And why worry? Journal of the Academy of Marketing Science, 43, 1-13.

Homburg, C.; Workman, J. P.; Krohmer, H. (1999): Marketing's influence within the firm. Journal of Marketing, 63(2), 1-17.

IBM Watson: https://www.ibm.com/de-de/watson

PaLM: https://ai.googleblog.com/2022/04/pathways-language-model-palm-scaling-to.html

Pirazzi, C. (1999): Tom Davis's Buzzword Bingo, https://lurkertech.com/buzzword-bingo/ (letzter Abruf: 23.2.2022).

SpencerStuart (2022): CMO Tenure Study: Women outnumber men for first time in CMO role (https://www.spencerstuart.com/research-and-insight/cmo-tenure-study-women-outnumber-men-for-first-time-in-cmo-role) (letzter Abruf: 10.5.2022).

StepStone (Hrsg.) (2022): Gehaltsreport 2022, Düsseldorf.

Sternkopf, H.; Mueller, R. M. (2018): Doing Good with Data: Development of a Maturity Model for Data Literacy in Non-governmental Organizations. Proceedings of the 51st Hawaii International Conference on System Science, 5045-5054.

Synthesia: https://www.synthesia.io/ 

Verhoef, P. C.; Leeflang, P. S. H. (2009): Understanding the Marketing Department's Influence within the Firm. Journal of Marketing, 73(2), 14-37.

Verhoef, P. C.; Leeflang, P. S.; Reiner, J.; Natter, M.; Baker, W.; Grinstein, A.; Gustafson, A.; Morrison, P.; Saunders, J. (2011): A cross-national investigation into the marketing department's influence within the firm: Toward initial empirical generalizations. Journal of International Marketing, 19(3), 59-86.


Next Article

Women Impact
Read

Container for the dynamic page

(Will be hidden in the published article)