Insourcing marketing is a big trend
Interview with Telia Estonia marketing director Ranno Pajuri.
Telia Estonia marketing director Ranno Pajuri believes that bigger companies will increasingly insource marketing functions. This may be bad news for the agencies. Telia is happy (so far) with the decision to start in-house media department.
What are the main principles that Telia EST follows in marketing?
I would point out three principles that shape the way we plan and execute marketing activities. I’m sure, the list could be much longer, but those are some of the most important ones.
ONE BRAND POSITIONING, DIFFERENT MARKET POSITIONS
It basically means that Telia has a common brand strategy, which is based on the same values and brand positioning for every market, but we also acknowledge that we have different market positions in different countries. Therefore, the brand strategy implementation is planned and carried out locally. We in Estonia plan the implementation of the brand strategy based on our market situation and opportunities to create value for our target audience. Our colleagues in Norway, for instance, may approach the same goal in a slightly different way.
GOOD BALANCE BETWEEN SHORT-TERM SALES ACTIVATION AND LONG-TERM BRAND BUILDING
When planning marketing activities, we try to keep a healthy balance between long term brand building investments and short-term sales activation. We believe that you need both to guarantee long term success of the brand and provide efficient sales support right now. Les Binet and Peter Field’s study suggests that the good balance is 60% for long term and 40% for short term marketing investments. Since we do not have any better benchmark, we follow this ratio. Of course, it never is a that precise, but the important point here is to keep in mind that one shouldn’t forget about either of the sides.
We in Telia have divided marketing activities into four categories: two under long term brand building and two under short term sales activations. Each of the category has different objectives and thus also different media approach and KPI’s. That helps us to keep track on investment types.
If you can’t measure, don’t do it. It could be difficult to measure, but every activity we undertake must have some kind of evaluation system, which shows does it create or destroy value.
What (marketing) lessons have you learned during your work in Telia?
I am not sure if those observations are related to my working for Telia, but I can point out a couple of things for you.
Firstly, there is an irrevocable trend of insourcing some of the marketing services. For instance, digital marketing, content marketing, web design, video production to name a few. I think there are several reasons behind that but the most general one is that having those competencies in-house produces better quality and results than buying those services from outside partners. In late 1990s the business world started to promote outsourcing in many areas, especially marketing. The marketing staff became generalists who were good administrators and new a little bit of everything but needed expert help in almost every little section of their work. Now, we need more and more people who have been educated in mathematics, statistics, physics and similar in marketing to execute the marketing functions in house and increase the unique knowledge base and experience.
Secondly, there is a massive load of false or misleading information out there, which is regularly used for making marketing decisions. One has to be really careful about which researches, statistics or expert opinions to use and believe. If something seems to be unreal, it usually is.
How is your in-house media department doing, was it a right decision to stop using media agencies in retrospect?
Well, retrospect is a term that is used when talking about something that has happened already long time ago, but we are just starting. I am happy to report that we have put together an excellent team. Some of the positions are new and some we had before but were joined with the media planning team. We have successfully set up the initial ecosystem of internal and outside partners including major media owners in Estonia. We also have successfully taken over most of the campaigns from our media agencies and this process will be completed by the end of May. The first results are promising, and I am sure we can share much more detailed information on the effect of the media planning insourcing later this year. But if you ask me, was it a right decision, then the answer is “Yes” for sure. I am pretty certain that most bigger advertisers will insource, at least partly, their media planning activities in fairly foreseeable future.
Visit Telia and meet Ranno Pajuri and his team during Balticbest 2019 company visit tours on August 30 in Tallinn. Read more and register HERE.