The Marketing Doctor says:

Loser: Corporate Social Responsibility



Folks, another challenging week for business, and it’s gotten me thinking even more about marketing essentials.  My picks reflect what you can call marketing core values for tough times:

The Winner:

Google came out with winning earnings this week (see the article here)… earnings driven by the success of their advertising model.  Apparently, more and more advertisers are flocking to Google in the on-going battle to reach the Target Market.

But Google’s my winner this week not so much for being Google.  It’s my winner because of what it represents in terms of the way to do marketing, especially when no one can count on picking off the low-hanging fruit anymore.  You know what I mean: that ever elusive and scattered Target Market that doesn’t play by the once tried and proven rules of engagement!  

Google’s success is impressive, but what it really tells us is that the traditional media is increasingly failing.  

Look at how the Viacoms and Chicago Tribunes of this world are reporting diminishing revenues from their bread and butter advertising, NASCAR is warning about losing sponsors, and the Super Bowl has lost longtime participant GM.  

What we are seeing is that in the fragmented media landscape, a business has to be more and more mindful of what it takes to reach its consumer.  What once worked simply isn’t working anymore.

Internet advertising accounts for less than 10% of the 284 billion dollars spent on advertising every year in the U.S., but it’s projected to have grown almost a percent and a half in one tough year… that’s something, and confirms the trend away from traditional media.

Google’s targeted advertising system really gives businesses what it was they were NOT getting when they did the Hail Mary pass of one-stop advertising to reach consumers.  

No longer is it enough to make a creative, do an ad buy, and assume you’ve hit a home run.  Marketing is getting more muscular.  Your marketing plan has to be well thought out and consistent with the fundamentals of your brand and business.

The great marketers like P&G have always known that marketing is constantly acting and reacting to market reality and that attention to details can either make or break a brand.

Many of these details involve fundamental marketing decisions.  

Details must always be “custom fit” to a brand or business.  Google’s success doesn’t show that Internet advertising will replace other forms of advertising or that it is the answer to everyone’s marketing needs.  It might not be.   

What it shows is that going forward, a business will need to go where no one has gone before and wherever they can communicate effectively with their Target Market.  That will probably mean the kind of marketing plan that builds on essential details and tirelessly seeks out even the smallest segment of a Target Market.

The Loser:

I’m no Scrooge, and it would be great if the milk of human kindness was essential for business success, but it simply isn’t.  That’s why my loser for the week is a concept: corporate social responsibility (or CSR).

It’s not yet safe to call CSR a fad, but I predict we’re going to be hearing a lot less about it in the months and years ahead.  

CSR is an idea that is hard for a decent person to reject because it’s very appealing.  How can you say no to making money and doing good at the same time?  But there’s growing evidence that CSR can be a millstone around the neck of a business. (See this great take from Forbes here.)

This week’s winner, Google, might be seen as a CSR kind of company with it’s “Don’t Be Evil” (informal) motto; but the fact is that the reason Google’s a powerhouse is because they have managed to do what no one else in the history of advertising has done before: connect the selling of goods and services directly with the people looking for those goods and services.  Whatta concept!

Google showed advertisers and marketers the kind of quantitative results that no one had been able to show before…  That’s business.  Whether or not they are “evil” might be open for debate, but net income rising 26 percent from a year ago is not.  

But it’s their business model, not CSR, that has made Google a success; and it will be the success of that model, not CSR, that will keep them growing.

Fact is, for many companies, CSR is just convenient window dressing, and for some it might be proven to be a business-killing philosophy.   

I’ve blogged about CSR before and basically held that CSR only works for a company when it’s a central part of that brand.  

A business should follow CSR only if it flows directly from its business model.  

In other words, if your brand is CSR, then by all means build your marketing around that; but never impose CSR on a brand and forget your brand’s core business (i.e., why customers and cash actually come in the door). That’s a fatal mistake.

CSR might be a positive if it’s somehow essential to what the business does —i.e., the way American Apparel explains higher clothing costs by arguing that it supports home-grown labor and paying health care for its workers.  But even this will only work as long as the consumer is on board with their vision.  If a consumer dumps the vision, then we’re back to comparing clothes prices, qualities, and styles —and forget where they’re made.

When the tide goes out, you see who’s swimming naked.  Well, the economic tide is going out —for how long we don’t know, but it’ll probably be severe.  

In these conditions, we will probably see a whole raft of companies get hurt or even fail because of a misguided commitment to CSR that has impaired their bottom line and loaded them with the kinds of costs that make it difficult to survive shrinking revenue.   

Even if this doesn’t happen, CSR will probably be less of a concern for consumers than good quality, good service and reasonable price.  It’s simple: you can’t expect your CSR plan to make up for a poor marketing plan, business model and business basics.

So what happens if CSR is just a passing fad?  Well, successful and growing businesses have usually given back without CSR…  and only a business that stays in business can do good anyway.

And remember, it’s always easier when you keep marketing and branding in mind.

TODAY'S TANTILLO TAKEAWAY -  

Marketing must become increasingly focused on reaching responsive slivers of the market with a wide range of tools and strategies.