When it comes to drawing up their Marketing budgets, major US brands’ are tending to neglect innovation programs, mainly because they do not have suitable evaluation tools.
While consumer behavior is in constant flux due to all the options offered nowadays by digital technologies, US businesses are struggling to maintain regular and consistent investment in marketing innovation. According to a just-published report from technology and market research company Forrester, entitled Benchmark Your Marketing Innovation Culture, only 10% of the 45 marketing executives surveyed invest regularly in innovation and encourage the creation of a dedicated space to foster strategic improvisation. Paradoxically, these same people recognize the importance of innovation in brand development and its adaptation in the face of the new digital consumer behavior.
A short-termist strategic outlook
The main drawback when it comes to financing innovation lies in the lack of long-term vision in an environment that is primarily geared to annual reporting. The benefits of innovation are generally being spread in random fashion between various areas of the Marketing effort, which means they are likely to have only a gradual impact over the long term. Given this tension between management’s short-term outlook and the long-term vision required for effective innovation, only 11% of the companies surveyed by Forrester have any personnel dedicated specifically to innovation, while only 9% incorporate an Innovation line into all their marketing budgets. Ironically, fully 95% of those polled are aware of the added value that innovation brings and also recognize that marketing innovation programs can generate high levels of ROI. Examples of Innovation programs vary. For instance, 11% of the marketers responding to the survey say their company is currently financing the rollout of real-time marketing programs to test out new ideas or digital innovation centres whose purpose is to develop new digital strategies.
Encouraging an environment that will foster innovation
The two main constraints on financing innovation are a) a lack of encouragement from senior management; and b) the absence of relevant indicators. Only 20% of the heads of marketing surveyed believe that they have the support of their bosses when they action ad hoc Innovation strategies. In addition, only 36% of the brands polled have long-term targets and performance indicators in place, while a mere 27% say they actively track the progress of their Innovation programs. Lastly, the report points to the crowdsourcing approach, which has been widely used by the marketing executives surveyed: 40% of them reported using customer feedback to help pinpoint areas for innovation.