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Planning Series: How MTV Networks is Taming Complexity

“The single biggest reason companies fail is that they overinvest in what is, as opposed to what might be.”

–Gary Hamel, Author and Professor, London Business School

Professor Hamel puts his finger on one of the most important undercurrents facing marketing leaders in large enterprises today.  As products, channels, and geographic markets proliferate, marketers will overweight to the familiar (that which “is” today), and fail to account for the size of future opportunity (that which “might be”).  Why?

They certainly won’t do so intentionally.  Rather, the sheer complexity of resource allocation decisions across geographies, products and channels will lead many marketers to settle for incremental changes to last year’s budget allocation.  In the face of overwhelming complexity, this will feel like the safe, smart choice.

But this backward-looking approach to resource allocation will be ever more dangerous as consumption shifts massively to new geographic markets and channels across the coming five years.  Marketers will underweight opportunities that don’t fit neatly into their familiar worldview.  They will arrive late to seize the larger opportunities of what “might be”.  And so marketing leaders ought to be thinking hard—right now—about how to simplify the complexity that would otherwise lead them to the familiar and the safe.

To that end we at the Council will be on the lookout for the handful of marketers that are making strides in this area.  The first we’ve spotted is MTV Networks (hereafter referred to as MTVN).  MTVN has put in place a system for allocating MarComm resources that tames marketing complexity, enabling it to allocate resources on a forward-looking basis.  MTVN’s system does four things very well:

1)  Delivers data-driven insight—MTVN’s system is grounded on cycles of in-market media experiments, which enables rapid learning and validation (or invalidation) of key assumptions.

2)  Simplifies—MTVN’s system uses technology to simplify the resource decision experience for marketers, hiding complexity that clouds decisions, while highlighting the critical factors that illuminate the optimal courses of action based on future value.

3)  Serves as lingua franca—MTVN’s approach puts common language to implicit criteria that everyone from market research to finance were infusing into decisions, often unwittingly.  Establishing a common tongue enables stakeholders to engage in resource allocation discussions with healthy tension, not unhealthy friction.

4)  Integrates decisions “vertically” – MTVN’s system ties decisions together from the higher-level portfolio allocation decisions (“Of all our programs/products, what should we market?”) to the lower level questions of optimizing the mix on individual campaigns (“How should we market it?”)

MTVN is finding that its system boosts the productivity of its media budget by 15-25%. Moreover, in the words of MTVN’s Todd Cunningham, SVP of Strategic Insights and Research:

“We’re finding that [this approach] forms a system for how to think about marketing spend—its creating a kind of collaborative intelligence around planning that we didn’t really have before.”

MLC Members, please take a first look at the case study.  More importantly, join us for a webinar on September 29th, where we’ll walk through MTVN’s resource allocation system in greater detail.  Todd Cunningham from MTVN will join us, as well as Rex Briggs, proprietor of Marketing Evolution, which supported MTVN in building the system.

Comments from the Network (1)

  1. Wide Angle » Planning Series: Recap
    on September 16, 2010
    Respond

    [...] then shared MTV Network’s approach to planning. They identified a key problem – marketers plan for [...]

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