A recent Forrester Research survey shows that only 11% of marketers have budgets specifically designated with allocations for marketing innovation. The research also found that the majority of companies, almost half of which have over $1 billion in annual revenues, are still in the early stages of marketing innovation maturity.
I found this intriguing and did some informal research of my own to see how companies market innovative new products. Most marketing organizations have made huge evolutionary strides over the past decade to embrace digital, social, email, integrated campaigns, marketing automation, and other new technologies and methods. However, most new product introductions and related marketing campaigns seem to follow the same pattern of what that company did previously for other products. Using tried and tested methods is a safe bet, until they don’t work as well as before. There is also an element of copycat marketing that when a company does something different and somewhat innovative, competitors and others will quickly pick up on the approach and do it too. Nothing wrong with that, but the innovative originators are too few and far between.
The one area companies tend to spend a lot of time and effort on is producing creative new advertising. It is not necessarily innovative in the sense of being new or original, but mostly different and creative. Some are very good, others not so much. While creative advertising is a good thing, it isn’t marketing innovation, in my opinion at least.
The more puzzling aspect is that companies make significant investments in innovation and new product development (NPD) initiatives. Further, there is a substantial focus on the front end of ideation to find and develop ideas and concepts. The best ideas and concepts are then moved into an expensive research and development process to develop innovative new products or services. These products or services are then brought to market with great fanfare using the same old marketing approach.
The exceptions here are brand new companies introducing their new product or service for the first time. They have to develop their marketing approach from scratch. Starting with a blank slate, they usually do something much more innovative and different from established companies in that market segment.
That leads us back to the budget issue highlighted in the research report. Companies should, in my opinion and as a matter of standard practice, always allocate a portion of any innovation and new product development initiative budget to marketing innovation. Various other research studies show that 50% of new product introductions miss revenue and profit objectives. Maybe, if companies considered marketing innovation as an integral part of all innovation and NPD projects, the success rate of new product introductions could improve without changing anything else.
Do you have budgets specifically designated for marketing innovation? Do you include marketing innovation as an integral part of innovation and new product or service development initiatives?