The folks over at Carlson Marketing claim to have discovered the secret to minimizing the risks associated with marketing campaigning. This according to their latest white paper which is available for download at their web site. I have selected several sections from the paper to comment on. Their claims are in italics my comments in regular type.

Marketing is a risky business. Anyone who’s ever pulled the trigger on a major marketing campaign with no real guarantee of a return can certainly relate.

Agree 100% with this. Any form of campaigning is full of uncertainty. The skilled campaigner is one who can exploit uncertainty.

Despite all the efforts at market and product research, customers are hard to read, and they don’t always respond to offers the way marketers expect them to.

Agree 100% with this. Customer rarely react rationally or with logic.

It’s probably no coincidence that CMOs have the shortest average job tenure among all C-level  executives, according to executive search firm Spencer Stuart.

The reason CMO’s have the shortest tenure is because they do not generate results.

Risky business, indeed. But it doesn’t have to be that way. By borrowing risk analysis techniques from the investment and risk management world, it is possible for marketers to gain control.

Huh? Marketers can gain control by borrowing risk analysis techniques? From the financial world?

Risk analysis gives marketers the opportunity to simulate and forecast the effects of various marketing efforts on consumer behavior and translate those effects into tangible returns such as revenue, corporate growth and profits.

Ok. But in order for the analysis to have any validity I need to accurately forecast customer behavior.

It gives marketing decision makers the opportunity to know the likely impact of their initiatives ahead of time.

Oh. You mean kind like those fortune tellers?

Sound complicated? Not at all. The process centers on building financial models that connect customer behaviors to financial outcomes, i.e. customer acquisition, growth and/or retention.

Ok. So I’m going to model customer behavior which is impacted by several million different variables, almost all of which I have no control over, which take place over time, are modified by known and unknown competitors who rarely act in a predictable manner, and this isn’t complicated?

I’ll stop here. I think you can see where this is heading. Anybody who attempts to model customer behavior and then stakes their job on the accuracy of this model is… is… well, they’re an idiot. Further, any CEO or CFO who demands this sort of predictability is an even bigger idiot.

Stop and think about this for a second… assume you’re the coach of the LA Lakers. The owner comes to you and says coach I want you to tell me before the game starts, what the final score will be. Further, I need you to tell me which players you’ll play and how much playing time they’ll each get along with their points scored, number of fouls and turnovers. Also, I want to know every play you’re going to use including the order of the plays utilized. Last, I need you to tell me this by quarter – and your job depends on how accurate you are at predicting this.

As farfetched as this may seem, it illustrates the expectations and practices which drive traditional advertising and marketing doctrine. Expectations described by the requirement to budget in advance all campaign activities down to the pennies and practices dominated by rigid planning and execution methodologies which are nearly impossible to modify during the course of a campaign. Based upon these expectations marketing professionals have evolved the competencies necessary to support this doctrine.

It may seem as if embracing uncertainty means throwing all fiduciary caution to the wind. By suggesting that we have to embrace uncertainty in order to maximize effectiveness I am not saying that we need to decrease financial accountability. Instead of BUDGETING we talk about FRAMING which is a different approach to allocating and managing enterprise resources.

Traditional campaigning efforts utilize budgets to allocate and manage resources on a micro scale. Rather than talking about a campaign budget we talk about the campaign frame. Budgeting assumes we work in a predictable stable environment. Framing assumes we operate in an unpredictable, volatile environment. Budgeting hampers the ability to improvise and adapt. Framing allows maximum agility. Budgeting is driven by quantitative measurements. Framing is driven by human, subjective interactions.

The components that make up a campaign frame are: an objective, an estimate of time to accomplish the objective, an estimate of the total resources necessary to achieve the objective and a calibration process that continuously evaluates progress. The critical difference is that the calibration process replaces the budget process. Results are judged not on budget accuracy but on campaign effectiveness. Calibrations allow campaigners to evolve and adapt to changing threats and opportunities in real time.

Campaigning is an art. The art of campaigning is driven by the ability to exploit uncertainty. The primary driver of campaigning is competitiveness. Campaigning is the art of decision making, leading, and motivating people and their organizations into action to accomplish missions; visualizing current state and future state, then formulating concepts of operations to get from one place to another at least cost; assigning missions, prioritizing and allocating resources, selecting the critical time and place to act, and knowing how and when to make adjustments during the fight.

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