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Deep Dive

Salesforce and McDonald's: GroupM CEO Mark Lollback questions martech spend as WPP invests

By Paul McIntyre and Josh McDonnell - Mi3

2 March 2020 6min read

Mi3's Paul McIntyre on stage with GroupM's Mark Lollback and Havas Media's Mike Wilson. Controversy: Gartner says 80% of marketers will "abandon" personalisation in the next five years

By Paul McIntyre and Josh McDonnell - Mi3

2 March 2020 6min read

GroupM CEO Mark Lollback said what many marketers are thinking - marketing automation is no silver bullet. But it's central to the new "customer experience" and personalisation remit so martech investments are rising and sucking spend that was the domain of media and advertising. WPP wants in, fast.

There's been a touch of tension in recent days between Salesforce and WPP after GroupM CEO Mark Lollback said what many marketers are thinking and feeling - marketing automation is no silver bullet, citing the sidelining of his $3m Salesforce deployment when he was at McDonald's five years ago.

Maccas and Salesforce, though, have not split and some say Lollback's Salesforce experience at McDonald's is no longer current. 

But his comments on a panel last week at the Future of TV Advertising forum should be put in context. Lollback was responding to a conversation with Havas chair Mike Wilson and Mi3 executive editor Paul McIntyre about whether martech and the broader corporate investment in customer experience technology platforms is a key driver in the decline of media and advertising markets. An array of cloud platforms from Salesforce, Adobe, Oracle and beyond are central to the new "customer experience" and personalisation remit that most companies are embracing at light speed.

But there has been intense debate in the past year about whether tech vendors have "oversold the dream" while underselling how costly and resource-hungry these martech platforms are for talent, time and capability - and what exactly the investment returns look like. Martech may be on the rise for now, but as with any maturity curve, so does the scrutiny and understanding. It's a constructive and necessary debate. 

The key points:

  • GroupM CEO Mark Lollback says businesses need to stop viewing martech as the "holy grail" and instead understand if the platforms correctly address the "business fundamentals".
  • The former McDonald's CMO questioned the implementation of Salesforce's suite during his time with the fast-food giant, claiming the product was a waste of "millions of dollars".
  • McDonald's and Salesforce were approached for comment but did not respond at the time of publishing.
  • "Abandon personalisation". A controversial report from Gartner has added fuel to the fire around martech's future, as it found 80% of marketers will likely give up their personalisation efforts due to a lack of ROI.
  • Lollback says the while Salesforce can be a brilliant product for other companies, McDonald's at the time struggled to effectively deploy its products through the business, which made it increasingly difficult and expensive to "unwind" the implementation.
  • Tech companies like Salesforce are attempting to address the issue - bringing in longer-term KPIs for sales teams which include satisfaction measures post-deployment.
 
Not the right investment

Speaking on a panel at the Future of TV Advertising Forum last week, GroupM ANZ boss Mark Lollback detailed his experiences and frustrations when rolling out Salesforce's martech suite during his time as CMO of McDonald's.

The former marketer explained that the business potentially "blew $3 million" with the company, after buying into its CRM offering. Based on this, Lollback says he was unsure on whether it was "sustainable long term".

"We're all guilty of chasing down the next holy grail that's going to solve our business problems," he said. "I personally handed out $3 million to Salesforce with McDonald's. I thought it was going to be the Holy Grail. I got a sales pitch. I bought it. We executed. Total waste of time.

"We've all heard it. 'Wouldn't it be amazing if we fully controlled a one-to-one consumer experience, engagement and messaging? That's all we need. We don't need an agency; we don't need television networks. I'm just going to go to every single one of our customers everyday one-on-one'. It's just bullshit. You can't do that."

Lollback says martech's use and implementation comes down to a case-by-case basis and whether the company's business outcomes can be effectively delivered by the product.

During his time with McDonald's, he says this wasn't the case, and that the fast-food giant needed to go back and examine the fundamentals of the business and its data strategy.

"What we did wrong is buy a system rather than actually taking a step back and saying 'what is going to be our data strategy and how are we going to use that to effectively deploy?'," Lollback says.

"We've got to be careful [as an industry]. Are there tools out there that are useful? Yes. For us, it just wasn't right. Over a two-year period we did a very detailed, sequenced consumer change strategy. The category was growing at 2% or 3%. We were doing double-digit growth for three years.

"Why? Because we went back to the real fundamentals of understanding the business, understanding the consumer, innovating and spending a lot of money. None of that 12% came from the CRM system."

THE PULSE

Quick question: Is martech diverting traditional media budgets?

Choices

"We've all heard it. 'Wouldn't it be amazing if we fully controlled a one-to-one consumer experience, engagement and messaging? That's all we need. We don't need an agency; we don't need television networks. I'm just going to go to every single one of our customers everyday one-on-one'. It's just bullshit. You can't do that."

- Mark Lollback, CEO, GroupM ANZ

Mark Lollback

GroupM's Mark Lollback

Strategic guidance for clients

Also present on stage was Havas Media Group chairman Mike Wilson. Wilson, agreeing with Lollback's comments, says his company remains neutral on which martech provider it recommends and aligns with.

He says the role of a media agency has changed significantly, with clients looking for more than the simple deployment of above-the-line media dollars.

"We're not aligned to any vendor. It's about who is best and having points of view on which ones are better for which clients," Wilson says. "Interestingly, part of our job now is to make those recommendations and then to help implement them. So, part of what we're doing as media agencies isn't just deployment of above-the-line media dollars anymore. It's strategic guidance for clients."

Wilson says he has numerous recent conversations with existing and pitching clients who have come to his agencies for assistance in activating and deploying martech throughout their businesses.

Despite Lollback's comments around the longevity of Salesforce and Abode's products, Wilson says the "reality is you have to have the full suite" as part of understanding the end-to-end customer journey.

"Our job as agencies or intermediaries is to help clients navigate the availability of content that exists on whatever platform and of course then go and execute it as efficiently as possible," he says.

"I've had a number of conversations with clients, with existing clients and in pitch situations in the last three months, where they've said 'we know we need to do this, we've got nobody internal who can actually activate it, can you help us do that?' I'm sure that's a conversation Mark and all the agencies are having."

"Interestingly, part of our job now is to make those recommendations and then to help implement them. So, part of what we're doing as media agencies isn't just deployment of above the line media dollars anymore. It's strategic guidance for clients."

- Mike Wilson, chairman, Havas Media Group

Havas Media's Mike Wilson

Personalisation under the spotlight

According to a recent report by Gartner, by 2025, 80% of marketers who have invested in personalisation are expected to abandon their efforts due to lack of ROI, the perils of customer data management, or both.

A further 27% of marketers noted data as the key obstacle to personalisation — revealing their weaknesses in data collection, integration and protection.

“Personal data has long been the fuel that fires marketing at every stage of the customer journey, and the drive to find new forms of fuel and devise new ways to leverage them seems to be boundless,” said Charles Golvin, senior director analyst in the Gartner for Marketers practice. “However, this quest has failed to meet marketers’ ambitions and, in some cases, has backfired, as consumers both directly and indirectly reject brands’ overtures.”

In a series of recommendations made by the research company, Gartner urged marketers struggling with personalisation initiatives to examine their relationships with martech vendors prior to purchase and instead leverage a proof of concept before investing.

"I think McDonald's would probably see a different view of their usage of Salesforce. And it's obviously a very broad term. Maybe when Mark was working on it, it was probably squarely in the CRM area."

- Adam Good, executive director, marketing technology, WPP AUNZ

WPP responds

The difficulty for WPP in this debate, and for most of the holding groups, is that they are rapidly attempting to catch-up and capitalise on the increasing corporate investment in marketing automation and customer experience, just as traditional media budgets are under pressure. WPP's CEO Jens Monsees has hitched WPP AUNZ's future growth and fortunes on martech, data, analytics and advising companies to design, implement and manage their marketing automation, data infrastructure, analytics and customer experience programs. 

WPP's executive director of marketing technology, Adam Good, who has also been charged by Monsees to oversee the group's Centre of Excellence in the area, is the lead on building potentially lucrative commercial alliances with the likes of Salesforce and Adobe. Unlike media companies in the cut and thrust of dealings with media agencies, tech groups are not used to a lot of market criticism that goes public, or debate they can't control. 

Still, Good says marketing automation is only on a growth trajectory.      

"I've heard Mark mention he had some challenges when he was in that [McDonald's] role," Good told Mi3.  "But obviously Salesforce is a very key partner for us. And that was a little while ago. I think McDonald's would probably see a different view of their usage of Salesforce. And it's obviously a very broad term. Maybe when Mark was working on it, it was probably squarely in the CRM area. 

"I'm sure it was an implementation that might have been to improve customer relationship management across their franchise group and various parts of the organisation. And maybe, back then, it didn't have as much relevance to marketing. But it would appear that from from knowing Salesforce and obviously seeing McDonald's talk about it, they would maybe have a slightly different view and have evolved over the last number of years," suggests Good, "and are feeling like the product has had some value to the company."

WPP's Monsees, in an interview with Mi3 last week, said it "was a good question"  whether tech vendors had oversold their systems or whether there was a lack of due diligence from companies in buying them. 

"I think it's both," he says. "If you don't continue to implement the tech tech platforms then you maybe lag behind. But you need to get your internal systems in place and in shape. Obviously the tech partners and the vendors are selling their tech extremely well. It's a normal thing. You need to look very closely at existing IT infrastructure and the architecture. And from there, with very capable people, you need to implement." And here's the kicker: "Sometimes you need a neutral partner like WPP consulting - what things should be done first and not just implementing," Monsees says. 

 

Snake oil, silver bullets and the hygiene factor

Still, Lollback isn't alone in his scrutiny of martech. Former head of marketing for fashion retailer City Beach, now consumer marketing lead for Brisbane Airport, Mike Doyle previously warned of “snake oil” merchants throughout the industry.

He told Mi3 that while there are those "overselling the dream", it is also the responsibility of the brands buying the products to do their due diligence. They must fully understand the requirements and what it is they need to achieve from a technology implementation.

"There are [martech] vendors out there that are definitely overselling the dream, it's tantamount to snake oil salesmen. But part of the responsibility sits on the brand side as well. We're burning the candle at both ends," Doyle says. "So you end up saying, ‘okay, we’re going to buy this email platform, which will send out what we are sending out now more efficiently, and layer on some fancy bits on the side.’

“Then, once you’ve implemented, it’s like, ‘Holy Shit! That literally just sends email so I can’t interrogate my database. I can’t look at some key metrics.  I can’t send these other kinds of communications out of the platform.”

One marketer who has also been critical of martech's value, despite emphasising he is not the "anti martech guy", is IAG's CMO Brent Smart.

Smart has questioned the sanity of any marketer spending less than 50 per cent of their budget on media and has “dramatically dialled down” on programmatic retargeting following a control group exercise.

The former Saatchi & Saatchi New York CEO who returned to Australia in 2017 has previously expressed his frustrations with the industry-wide swerve to marketing automation and efficiency as the next silver bullet.

"It's a big topic," he says. "Every big corporate has got themselves doing customer journey mapping. I don't think it delivers competitive advantage. It's hygiene. It's a classic quick win mentality. When you focus on efficiency you're able to show a commercial impact from marketing pretty quickly, but you're missing the bigger aspect in this conversation. Too many marketers focus on the efficiency side as opposed to the effectiveness side of things." 

There’s a lot of “amazing” tech, he says, “but what it doesn’t do is build brands”.

“For me it’s really simple: all that matters is what touches the customer. That's what we have to prioritise - because that's what builds brands, that's what leads to sales.”

Hear more from Smart on Mi3's podcast.

 

Not walking away

Now working on the other side of the coin, Lollback says as an agency leader he isn't going "to walk away from [martech]".

"What we need to be able to do is help our consumers if they want to lean into that. What most marketers say when they hear about all this different tech is they need an independent counsel to ask, 'If I bought this, what does it really do? How does it plug into your systems and how will it make you generate better returns for me?'," he says.

"That’s what we're trying to do, very expensively. We've set up centres of excellence. We've trained lots of people. We're hiring new talent and we're upskilling the agency so we can actually be that partner for our clients, and make sure the money isn't just being diverted - but if it is, how does it contribute back to the overall team."

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