How should a modern marketing department be structured?
This is a bit of a rhetorical question, partly because there is no one-size-fits-all answer (hang in there, there will be some actual, proper content in this article) and partly because Econsultancy has already made a decent fist of answering this question (but you’ll have to subscribe to download our truly excellent and detailed new report, A Guide to the Modern Marketing Model and Organisational Structures).
Anyway, the blog is here to offer you a preview of said report, and specifically to mention the six proposed organisational structures fully visualised and discussed within.
These structures are no easy task to define, given the lines between marketing, PR, advertising, ecommerce, tech, operations, product, design, sales and customer service can blur. Before we get on with it, I should mention that the report also attempts to define customer experience, content and data, splitting them out into respective domains, activities, functions and roles.
Unless you’ve been living under a rock, you will probably know that in 2017 Econsultancy published a new unifying framework for modern marketing called the Modern Marketing Model (M3).
Here it is…
The M3 model
The aim of the model is to reconcile classical and digital marketing and define what the marketing function does.
This reconciliation is very much an ongoing process in the real world, given our recent Guide to Customer Experience Management revealed that less than half of respondents said they had an integrated approach to online and offline marketing (see chart below).
So, with the M3 model and its aims a metaphorical gauntlet thrown down, the org structures compiled in our new report describe the way marketing is organised today and can be used as blueprints (for competencies, hiring and managing).
Here’s M3 creator and Econsultancy founder Ashley Friedlein:
The structure employed by an organisation will be determined by its people, processes, technology and competitive landscape. That means that there is no one-size-fits-all approach.
At a minimum, companies will need to break organisational silos and connect teams responsible for different channels so that they can collaborate and deliver seamless and consistent experiences. Intuitively, this makes sense, but operationally, this can take time to execute and may require the support of partners to redesign teams and processes.
The six structures
These structures serve as the basic building blocks of organisational design. The report examines how marketing leaders might apply the M3 framework to each of these structures. As previously stated, you’ll have to dive into the report for full visualisation of these structures with detail on which roles and teams sit where and why.
1. Product-focused organisational structure
A product-focused org structure may be useful when only a few major customers or customer types make up most of the business revenue. Product or brand managers are responsible for a product’s marketing plan and the implementation of this plan to achieve market share and profit goals.
Product managers may be directly responsible for marketing strategy, marketing operations, customer insights and analytics. They may need to enlist the support of (but may not have responsibility for) brand, marketing, media planning and buying, PR, sales, manufacturing and finance.
2. Geographically-focused organisational structure
Big companies serving multiple markets may need geographic specialisation. The sheer size of the market area might require smaller marketing units to address regional requirements effectively.
This can still be a customer-centric approach, given that customer preferences can vary in different geographic markets. The challenge, however, is ensuring good communication between territories. If not, this can create inconsistency.
3. Channel-focused organisational structure
Here, channel expertise is the primary basis for structuring the org (e.g. direct mail, ecommerce, loyalty). This arrangement has become popular in response to an increasing fragmentation of channels.
Though there may be deep channel expertise, this is perhaps caveated with a difficulty in coordinating seamless customer experiences across channels.
4. Functionally-focused organisational structure
An organisation based on common job functions has separate departments or teams created for areas such as advertising, sales or market research.
Again, this is a structure that can be explained by fragmentation of media channels but also marketing tools and tactics. If specialist expertise is required (as became necessary for search or, lately, programmatic) functional teams are a simple way to address these requirements, if, indeed, they are not outsourced.
5. Segment-focused organisational structure
Organising around groups of customers, related by industry, application or usage, for example, is another approach. Econsultancy’s report identifies this structure as the one that most closely aligns with M3.
Such a structure allows for identificaiton of changes in audience behaviour and opportunities to cross-sell and up-sell, though it can lead to duplication of functional expertise such as sales and each segment needs to be scalable.
6. The customer journey-focused organisational structure
This is a variant of the segment-focused org and represents a de-emphasis of product and geography, and a reflection of the customer journey. As the report puts it, “after all, a business cannot optimise the customer experience without organising activities around the customer journey.”
Acquisiton, retention and growth are given equal footing, with a so-called omnichannel experience the focus.
The tangible meets the intangible
Let’s go back to the M3 model again. Its principles are:
- Integration (of classic and digital disciplines)
- Agility (responsive and able to create personalised experiences)
But where terms like ‘customer centricity’ arise, the report authors are quick to recognise the meeting of culture and structure. Indeed, the report states “in some cases, organisational structure may provide an indication as to what kind of culture exists in a business. The organisational structure can dictate how information flows throughout the organisation. It provides an indication of reporting lines and generally how a business gathers resources to achieve business objectives.”
This means org structure is a really important link between the philosophy (if you like) of customer centricity, often instigated by founders or CEOs, and the reality of culture and process.
By creating the right structure, marketing can work towards the modern goal of making every interaction with a customer as relevant, pleasurable, easy and useful as possible for them.
Econsultancy also offers an excellent online training course – Fast Track to Modern Marketing – taught by Ashley Friedlein and covering the 10 parts to the M3 model:
- Marketing Strategy
- Market Orientation
- Customer Insight
- Brand & Value
- Segmentation & Targeting
- Customer Experience & Content
- Data & Measurement