The marketer's dilemma: The new capability agenda for marketers and their partners

September 6, 2016

Executive summary

The media and marketing ecosystem is being reconfigured and transformed by digital developments. Brands find themselves operating in a quickly evolving environment in which new combinations of technology, experiences, and content are rapidly replacing traditional advertising. These developments are creating a major dilemma for the leading marketers, which control more than US$500 billion in advertising budgets. In a world of proliferating choice and supply, where do marketers focus time and resources so they can engage target users most effectively and efficiently? Many marketers are actively formulating answers to this question. They know they need different skills and ways of working to catch up to changes in users’ media consumption. They also know they need new partnerships to design the content and distribution methods required to engage them. Given these developments, marketers’ chief interlocutors — media (publishers) and marketing service providers (agencies) — will have to evolve substantially to remain relevant. Media companies need to create new advertising products, rethink their content distribution strategies as social media and mobile grow in significance, and use data to slice and dice their audiences in ways that deliver more targeting value for their customers. Finally, marketing service players must shift to focus more on content and intellectual property development, evolve from a services supplier to a strategic business advisor, and accelerate marketers’ ability to move from experimentation to scale across as much of their customers’ marketing and media mix as is feasible.

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The marketer’s dilemma

Digital video. Social media. Native advertising. Programmatic. In-app advertising. Messenger advertising. These are just a few examples that were not meaningfully present in the modern marketing repertoire just a few years ago. Today’s marketer has more options to reach her target audience than ever before. And yet, it has never been more difficult to earn the attention and engagement of that user. We call this conundrum the marketer’s dilemma. This has become especially acute because three major developments are actively reshaping the capability requirements of marketers, media publishers, and marketing service providers such as agencies.

  • First is the massive move in content consumption to the small screen of the mobile device. U.S. adults are spending about 25 percent of their 12 hours of daily media consumption on a mobile device. Television still leads in terms of time spent (about one-third of the total). But with the rise of video viewing on mobile and of multitasking while viewing the big screen, watching television is no longer a television-centric experience.1
  • The rising generation of consumers, which finds traditional sources of influence less meaningful, identifies with YouTube phenomena far more intensely than it does with movie stars and television actors. When Variety commissioned a poll asking youths ages 13 to 18 to name the figures they find most influential, the top five were all YouTube talent; the online comedy team Smosh was number one.2
  • Consumers also are becoming less willing to pay attention to traditional advertising messages. A recent Harvard Business School study showed that the percentage of ads getting high attention has decreased dramatically, from 97 percent in the early 1990s to less than 20 percent today.3 With technology ranging from ad blockers to DVRs available to more and more users, and the increasing amount of high-quality content offered in ad-free to ad-light subscription environments, there is little doubt that new approaches are required.

Thanks to these trends, and the technology that is powering them, the traditional linear advertising and marketing value chain is collapsing into a dynamic and complex ecosystem. In the well-established value chain, each player — the marketer, the media publisher as the main supplier of advertising inventory, the agency as the primary marketing service provider, and the end consumer — had a clearly defined role (see Exhibit 1). Work flowed linearly between a series of controlled touch points, from a television campaign that pushed mass messaging out to the consumer, to the eventual transaction at a store.

Traditional marketing value chain vs. new customer-centric marketing ecosystem

In the new marketing ecosystem, the customer takes center stage and dictates where she can be found and how she wants to receive messages, content, or information from brands in exchange for her attention. The touch points have expanded as marketers have added their own direct-to-consumer (DTC) e-commerce channels and have diversified media spending into new opportunities such as content marketing. These touch points are “always on,” meaning marketers can continuously listen to consumers’ signals and respond in relevant ways.

Consider the following scenario. A consumer sitting at home on a Sunday afternoon may see an email ad on her smartphone from a yoga apparel company. She opens the company’s mobile app and browses through a few items. Twenty minutes later, she is targeted by an ad for a pair of yoga pants in her Facebook feed. She ultimately clicks through to the company’s website to make a purchase. What used to be a drawn-out “funnel” has collapsed into a hyper-accelerated, more targeted, and more interactive path to purchase.


Solving the marketer’s dilemma will not be easy — for marketers or the companies that provide products and services to them. The innovations that are delivering greater insight, engagement, and connectivity for marketers are the same powerful forces that are disrupting established playbooks for building audiences and the business models for monetizing them. These forces are also blurring the boundaries and value chain roles among marketer, agency, and publisher. It is for these reasons that solving the marketer’s dilemma will drive a significant realignment in how marketers engage with users and how marketers choose their agency, publisher, and technology partners.

Winning in the “flow” with users — where every brand is just one user interaction away from purchase — requires both new strategies and new approaches to execution. And although the precise formulas for success will differ from industry to industry and even from player to player, the winning direction is becoming clearer every day. Many marketers will bring more capabilities in-house. They will prioritize their spending with those providers (whether they are publishers, agencies, technology companies, or consultancies) that deliver the most effective solutions to their brands combined with the least executional complexity. They will seek out differentiated partnerships with those innovators that bring the necessary creativity in user experience and breakthroughs in business model to cut through the clutter.

In short, these winners will embrace the marketer’s dilemma not just as a rationale to reimagine their marketing capabilities. They will view it as a strategic opportunity to strengthen their overall businesses; gain advantage over their competitors; and clarify their purpose to users, customers, and partners. Here, the famous Latin proverb does indeed ring true: Fortune does favor the bold. For while some hesitate, many tinker incrementally, and others cling to outdated approaches, the winners will be those that, in contrast, embrace new models and approaches, demonstrate that they can execute them rapidly, and learn and perfect them by doing.


The marketer's dilemma: The new capability agenda for marketers and their partners