We Restructured Marketing and Cut Spending by 25%. This is What Happened.
The vast majority of CMOs are planning to review their marketing team structure in the next few years but how many would volunteer to undertake a restructure like the one Macquarie University has been through?
We talked to MU chief marketing officer John Chatterton about the radical reorganisation of the university’s marketing function that began last year, the dramatic reduction in staff, the development of more efficient ways of working, and the light at the end of the tunnel.
Pre-existing roles reduced by 80%, for a 67% total reduction
Macquarie University made the decision last year to centralise its marketing function. It had been a complex, highly decentralised beast, servicing the parent Macquarie University corporate marketing function, faculties, Macquarie Graduate School of management, the Macquarie private hospital on campus and various other medical research units and brands.
Once that decision had been made, with help from marketing consultancy TrinityP3, MU brought in John Chatterton, a former FMCG marketer, to oversee the process.
Chatterton, a former senior marketer at Goodman Fielder, Heinz and Campbell Arnotts, wanted to broaden his experience.
FCMG companies, once the “rock stars” of marketing, were no longer at the forefront of many of the new trends taking hold in the industry, such as the adoption of new technology.
Steering a services brand like MU was new ground and presented some complex problems.
“The university made the decision to centralise marketing resources before I started,” Chatterton says.
“There were conflicting messages. There was a staggering level of complexity. We had more than 90 agencies, 90 publications and more than 95 websites.
“It wasn’t an efficient or effective way of organising.
“And it wasn’t delivering a strong outcome. Our brand tracking showed MU had a very high level of awareness but when it came to consideration and preference we had far lower consideration levels… The ‘reason to buy’ just wasn’t there.”
An audit of MU’s marketing resources showed the university employed about 110 marketers — in 29 different teams!
The decentralised nature of the marketing function had seen marketing shoots sprout in many corners of the university to create websites, eDMs, brochures, publications and events.
But it was clear it wasn’t efficient: 91 pallets of unused printed collateral material provided evidence of that!
When Chatterton set out to conduct the audit, there was some debate over who was considered a marketer: did that include event managers scattered across campus? Did it include public relations?
“The first task for me was to identify the marketing resources or how much money we were spending. Getting a consistent definition was difficult.
“Since then we’ve been working through how do we restructure it to be more aligned and effective, and develop clear priorities.”
The human toll
The hardest part was managing the human impact of such a restructure. Marketing was not alone at MU: the university was undergoing similar restructures in other functions, such as human resources and financial services.
Nevertheless, Chatterton says there is never a good time to be telling close to 90 people they would no longer have a job at the university.
The job losses were brutal, particularly for staff who had developed a broad range of skills over time but were not necessarily specialists in any one particular area.
“My key concerns were on the people side. Our change was impacting 110 people and through no fault of their own a number of those people just didn’t have the skills we would need moving forward.
“The skill set we really wanted was experts in their area. Before, we employed a lot of generalists.
“There was a process to ensure they had opportunities presented to them such as opportunities for alternative employment and a good notice period was offered to them.”
From tasks to audiences
Reducing 110 jobs to just 20 continuing roles, to be supplemented with 16 new positions, represented an 81 per cent reduction in head count in the first instance, settling at about a 67 per cent reduction after the new positions were filled. An additional four to five roles may be added.
MU also reduced its roster of agencies from 90 to 25.
But how was MU going to be able to cope with cuts of that magnitude across marketing?
By the time the redundancies had been made, several decisions had been taken about how the shape of the marketing team would need to change.
It would have less reliance on outside agencies, a new creative department, a much greater focus on digital communications and a reduced focus on printed collateral and publications.
There would also be a greater emphasis on data and developing a single view of the customer, whether that be student, researcher or graduate.
As Chatterton says, that would have been impossible with 29 different departments that between them were using seven different CRM systems and nine marketing automation tools.
“I was worried about having enough resources to do the jobs of 29 departments and I still am.
“It can be managed as long as you’re realistic about your objectives and your resources and then setting expectations accordingly… and not expecting one person to do the work of 10 just because we’ve restructured!”
“We’re taking a data-led approach.
“We’re trying to get away from being task-driven to be audience-driven.
“We need to discover who are all those people, and what are all those things that are being communicated, and also understand what messages they may want to receive in certain channels.
“We’re asking ourselves: do we really need all our publications? In one part of the university we’ve already found we can get down from 28 publications to one.
“Fifty emails become one weekly eDM.
“Put that way, it begins to make more sense.”
New MU group marketing team structure takes shape
The new centralised group marketing team was set up in two halves: planning and execution, which included a new creative department that would handle many of the university’s regular, ongoing campaigns; communications (public relations, issues management and social media) and digital (web and CRM).
The planning team is made up of marketing strategists that each handle a portfolio of brands and client groups from within the university. They assess and translate those needs into MU’s marketing objectives.
“The strategy team owns the development of the strategy and the brief. The brief then goes to the other part of the team.
“To deliver consistency, we have a strong in-house execution team.
“We aim for more of a blended model where we do part of the creative work in-house and pair up with agencies for extra capacity.
“Everything goes through the same creative team. None of our client groups would know whether the work was done externally or not.”
The benefits of an in-house creative department
New roles include creative director James Barrow, who joined from advertising agency Leo Burnett, a head of portfolio strategy and a brand manager for the university. Chatterton is still hiring to fill the positions such as data analyst and CRM producer (who creates emails from the CRM).
“James manages the creative team but most of his time is spent being a proper creative director.
“It’s a skill, managing parent-child brand relationships.
“I was doing it. While I would back myself to a point, it’s great having someone to do it full time who can find creative solutions.
“(Our brands) need to look slightly different (from each other) but in a controlled way.”
A hierarchy of related research and education brand icons has been spawned by MU’s Pioneering Research and Pioneering Education logos.
Last year MU also refreshed its brand and launched its new Pioneering Minds positioning campaign.
Work has begun on the next iteration, which Chatterton says will be an “evolution”.
More efficient ways of working
Macquarie University is almost always in-market with one campaign or another. They are not the big-budget mainstream media campaigns of FMCG brands.
Instead, they utilise a range of digital channels and the university’s own media.
About 2500 email campaigns were conducted last year, for example.
A content audit of the university’s website showed it had more than 30,000 web pages! And more than 450 videos on YouTube.
“We are slightly disappointed by the results. A lot of visitors are after very similar information. Half of the website is very lightly viewed.
“When you take into account you’ve created 10,000 pages that no one has looked at, at a cost of about $500 a page, the opportunity cost of that is huge.”
The number of web pages is likely to be cut to about 10,000.
A new content strategy will focus on key strategic messages, such as promoting the beauty of the MU campus park, lake and trees.
Similarly, there will be a rationalisation of social media channels. These already include Facebook, Twitter, Instagram and LinkedIn. The possibility of launching into others hasn’t yet been considered.
“We had 95 Facebook pages. We’ve identified two Facebook pages that we are going to focus on — the main Macquarie University page and campus life.
“Our initial plan is to have the largest and most engaged university Facebook page in the country. We’ll get very close to that this year. Macquarie University and Macquarie University International have about 250,000 followers each and they have similar content.
“When you can consolidate those and have daily contact with half a million people it gets very cost-effective.
“The monthly cost of communicating with them is the same as producing one piece of collateral.”
The new creative team has developed a range of templates based on best-practice examples so staff don’t need to reinvent the wheel for baseline marketing activities.
A rate card has also been established with agencies so staff and agencies know how much established work will cost up front.
Cost savings add up
Total costs have been reduced considerably — by more than $5 million dollars, according to university documents. Chatterton says savings from efficiencies have been significant.
“We’ve reduced our marketing spend considerably, all up by 25 per cent on salaries and spend.
“We’re still working through what is true efficiency savings and what is due to cuts.
“My estimate is the efficiency saving is 15 to 20 per cent — from removing duplication of effort by consolidating workflow and production.
“That’s before you count any increase in brand awareness.”
Brand impact and audience reach to grow
This year’s annual brand tracking study has been postponed, but Chatterton says while it won’t be measured until next year, he’s confident MU’s portfolio of brands are working together more efficiently, generating more brand consistency and, in all likelihood, greater brand awareness.
“We’ve communicated to our stakeholders that 2016 will be the year of reset and transition. We can’t replicate what we did last year.
“We’re slowly tightening it up. 95 per cent of the university is very collaborative about that. The other 5 per cent like the way it’s been done for a very long time.
“Where we spend our money is changing. We are absolutely shifting from traditional media and printed collateral into owned media channels.
“We will significantly improve the reach and impact of our communications.
“Our goal is to be the top most preferred university for our audiences, such as people who live on the north side of Sydney.”
For anyone contemplating a massive restructure of marketing, Chatterton says the key is to recognise that just making the transition to a centralised team and consolidated brand structure generates a massive workload on top of day-to-day marketing activities.
“You have to manage the business as usual and the work generated by the transitioning — which is a lot of extra work.
“If you’re reducing staff at the same time, you quickly get to resource crunch. That equates to a 4:1 increase in workload for those who work through the transition.”
If he was doing it again, Chatterton says he would look at introducing an incremental and separate team to manage the work generated by the transition.
“It’s been very personally rewarding. It’s refreshed my perspective on marketing.”
But he says it’s also been a very challenging marketing team restructure and a massively complex process to have undertaken.
Have you initiated or undergone a radical marketing team restructure? We’d love to hear about your experience.
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