March 2009



A Letter from CEO Michael Dunn

It’s hard to believe the first quarter of 2009 is nearly behind us. It’s been a whirlwind of activity – almost enough to make you forget the economic gloom and doom that besets us. Almost.

The trick in this environment is to continue to stretch your perspective by learning and managing smarter, and in ways that pay off. That’s been our message since the meltdown began last October – and it’s one that increasingly resonates.

In this edition of our newsletter, we present a sampling of what's been on our minds. We kick off with an overview article about my just-published book, “The Marketing Accountability Imperative,” and then give you a peek into our expanded innovation capabilities stemming from our January acquisition of creativity and innovation consultancy Play. David Aaker illustrates the negative impact of organizational silos in his article “Why Sony Missed the iPod.” Finally, we provide links to eight of our most popular articles from 2008.

As always, we welcome your feedback!

Best regards,

[Signed, Michael Dunn]

Michael Dunn
CEO & Chairman

Dunn’s Timely The Marketing Accountability Imperative Published

A recent survey by Prophet suggests that as few as 19 percent of companies can consistently and accurately determine what they are getting – if anything – from untold millions in marketing spending. 

Prophet Chairman and CEO Michael Dunn’s latest book, “The Marketing Accountability Imperative: Driving Superior Returns on Marketing Investments,” offers up not just a systematic methodology for rectifying that performance shortfall, but a framework for how the entire management team views an accountable and effective marketing organization.

Says Dunn, “The ultimate goal of marketing accountability is not to improve the rigor of ROI measurement, but rather to make more money faster, through better, more effective and efficient marketing investments – that both ring the cash register and build the brand.”

Published by Jossey-Bass this month, the book presents a holistic approach to managing the complex field of large-scale marketing initiatives and making increasingly smarter, more effective marketing decisions. Filled with examples of real companies’ successes and struggles on this front, it is written for marketers and all C-suite executives and directors who recognize that marketing has become the elusive key for both short-term and long-term success.

Dunn zeroes in on four kinds of marketing competencies that are needed to generate top performance – great strategy, great creativity, great analytics, and great execution. Effectively developing and synergistically connecting these competencies leads to consistent, powerful business results. 

In the book, he delves into key issues that must be addressed to begin honing those competencies:

  • How well marketing investments align with the most valuable marketing opportunities and goals.

  • Rigorous evaluation of which marketing investments are working and which are not, why, and how these issues can be resolved.

  • Understanding the best combinations of marketing spending tools and tactics for each individual company’s particular circumstances, ranging from goals to competition to resources to brand health.

  • Ways to optimize the effectiveness and efficiency of marketing investments to do more with less while maximizing growth.

  • Understanding how opportunities identified can be captured to sustain long-term marketing accountability impact.

Establishing a foundation of fundamental MA skills and practices is a process of employing a complete suite of tools and approaches that are applied in the context of those key issues, which are addressed by Dunn in the book. Once a company has mastered these fundamental practices, it can progressively add more sophisticated approaches since marketing accountability is not a quick fix, but a long-term, continuous process.

“The Marketing Accountability Imperative” aims to cut through the clutter of outmoded ideas and misinformation that often surround marketing effectiveness. It provides clear answers and a blueprint for ongoing success.

Learn more about The Marketing Accountability Imperative here. Check out Michael’s recent webinar outlining key concepts from the book here.

Making Inspiration a Discipline

By Andy Stefanovich

In January, Prophet joined forces with Play, a leading creativity and innovation consultancy, creating something even better than what we had before: a world-class innovation business within a world-class company. Play was founded by Andy Stefanovich, now a Prophet senior partner and a popular lecturer and commentator on creative thinking.  We offer you a taste of the thinking that Andy brings to the party.

Too many businesses just can’t seem to get traction with their innovation efforts. One of the reasons? They are focusing on the intended output when they should be focusing on the input.

This flawed — and all too common – approach has created the need to apply a new equation to the process: Inspiration + Creativity = Innovation.

The key to practicing strategic business inspiration is dissecting the experience of inspiration itself. It’s something that everyone understands. It’s refreshing, engaging, and universal. And it can be harnessed in a variety of ways for business leaders.

Think of inspiration as having five distinct modes: serendipity, recreation, intentional distraction, forced connection, and targeted discovery. Let’s explore each:

  • Serendipity. An unexpected moment of inspiration. That’s true serendipity. We don’t seek it out, but it stops us in our tracks and demands inquiry. Likely sources can be found in museums – we expect to be inspired when we go to a museum. It’s when we walk out the door that we put our blinders back on.

  • Recreation. Common but unrecognized, this mode’s sole function is to release the conscious mind from its standard routine. Sports. Music. Surfing the Internet. Playing a game. Studies show that your unconscious mind is far more effective at solving complex problems than your conscious mind, making recreational inspiration essential to thinking differently and maintaining good mental health.

  • Intentional Distraction. This form is a slight twist on recreational inspiration. How many times have you had a tune in your head that you can’t quite place? Or found the name of an important contact elusive? When you stop thinking about it, it comes to you. Sometimes you need to step away and intentionally focus elsewhere. Try it in small doses. Go outside your office. Take a walk. It’s not a license for slacking and isn’t guaranteed to work every time. But it’s valuable for unleashing the part of your brain that does the heavy lifting.

  • Forced Connection. With forced connection, you start applying inspiration to a specific real-time objective. It’s an acquired skill. How can the glass of water in front of you help your sales team? How can an overheard conversation in public lend you a new perspective on your company’s brand? Results may lead to the next transformational innovation – or nowhere at all. Forcing connections can be awkward, but there’s payoff to finding relationships between focused objectives and seemingly tangential sources of inspiration.

  • Targeted Inspiration. Targeted inspiration pushes you to seek out sources of inspiration that will strategically stretch your thinking, challenge your assumptions, and create new connections. What can a five-star hotel manager learn from a zoo? What can a marketing team learn from a hostage negotiator? Ask yourself, “What business am I in?” What is the value that you really provide to your customers? What other organizations or individuals make the same promise? And what can you learn from them? This mode of inspiration is the quintessential new input that’s needed to get new outputs.

With practice at each mode, inspiration becomes easier to achieve and more rewarding over time. It’s the new input that can return sanity to innovation and create a sustainable pipeline for ideas that have impact.

For an expanded version of this article, click here.

Why Sony Missed the iPod—the Curse of Silos

By David Aaker

A vivid example of the silo problem, the failure of autonomous product and functional silos to cooperate, comes from Sony’s incredible miss of the iPod market, as recounted in the new Wiley book “Sony vs. Samsung” by Sea-Jin Chang.

The iPod was a natural for Sony. It was theirs to lose. The company has long been the leader in portable music, from the Walkman to portable CD players to the mini-disc. And unlike Apple, Sony had a big presence in music. More generally, Sony has been the miniaturization company ever since the transistor radios of the 50s, and no firm has been better at creating new categories than Sony.

At the huge Las Vegas Comdex trade show in the fall of 1999, Sony introduced two digital music players, two years before Apple brought the iPod to the market. One, developed by the Sony Personal Audio Company, was the Memory Stick Walkman, which enabled users to store music files in Sony’s memory stick, a device that resembled a large pack of gum. The other, developed by the VAIO Company, was the VAIO Music Clip, which also stored music in memory and resembled a stubby fountain pen. 

Both were flawed but provided the basis for a new product category. Each had 64 megabytes of memory which stored only 20 or so songs and were priced too high for the general market. Both also featured a Sony proprietary compression scheme called ATRAC3. Software to convert MP3 files to the Sony standard was not convenient and, worse, resulted in slow transfers. The fact that Sony promoted two different devices created by two fiercely independent silos confused the market as well as the Sony organization.

Another silo was also involved, Sony Music. A handicap instead of an advantage, Sony Music was concerned more with its ability to avoid piracy and freeloading than with the success of the new digital product. As a result, it inhibited the products’ ability to provide access to a broad array of music and led to the use of the cumbersome uploading process, which turned out to be a burden.

Sony’s three silos thwarted the efforts by Sony to create a new category and preempt Apple’s iPod, which is soon to sell its 200 millionth unit. It is likely that a product that combined the energies, resources, and customer insights of the three silos and was improved over time would have been successful and that the iPod opening would not have materialized.

Sony has begun the process of changing the silo culture so that cooperation and communication replace competition and isolation, so that it can return to its innovation heritage, avoid other iPod-like misses, and liberate synergy potential.

This article appeared in the February 6 issue of Marketing Daily, and is based on Aaker’s latest book, Spanning Silos: The New CMO Imperative. He can be reached at

Top 8 of 2008

Our most widely read articles over the past year covered topic areas as far-reaching as customer touchpoints, brand portfolio, marketing accountability, innovation, and more. Read them below in case you missed them.

Making Marketing Smarter Amidst the Cuts [PDF]
By Chiaki Nishino and Fred Geyer
The troubled economy is forcing corporate leaders to re-evaluate their spending plans across the board and marketing is not exempt. In fact, marketing is often first in line for cuts as corporate leaders attempt to identify immediate cost reductions that may take longer to achieve in other areas. (December 2008)

Get (and keep) Great People [PDF]
By Roland Bernhard
This article examines the Employee Value Proposition as a potential strategy for attracting and retaining the best people in tough times. (Customer Strategy, November 2008)

From Silos to Synergy [PDF]
By David Aaker
The existence of functional silos is a serious challenge for CMOs. This article, based on David Aaker's latest book, "Spanning Silos: The New CMO Imperative," discusses ways to combat silos to advance marketing and develop stronger offerings and brands. (The Advertiser, October 2008)

2008 Best Practices Study: The Making of World-Class Innovators [PDF]
Despite its promise as a primary source of organic business growth, capitalizing on innovation’s potential is an elusive goal for many businesses. Our 2008 Best Practices Study, developed in collaboration with Play, reveals how “model” innovators do it — with approaches that point the way toward better innovation success for others.

‘Quantilitative’ Research & Beyond: New Platforms for Customer Insights [PDF]
By Andrew Pierce
Web 2.0 is doing a lot more than simply facilitating exciting new ways to establish a brand’s relevance with customers. On the marketing science side, it’s driving an equally exciting morphing of methodologies and the ways we use them. In short, we’re seeing a redefinition of the capabilities in the traditional analytics toolbox. (Marketing News, March 2008)

How to Cope With Aging Brands [PDF]
By Joseph Gelman
Individual brands, or even whole categories, that were once important for a particular consumer segment, become irrelevant as society evolves and tastes change. Should you completely lose your current brand equity association so you can become relevant to new consumers? (World Advertising Research Center, October 2008)

Achieving Accountable Marketing: Six Critical Value Levers Must Be Pulled [PDF] 
By Michael Dunn
Accountable marketing performance is an achievable goal. By focusing on and unlocking the power of the six critical value levers outlined in this article, the marketing organization will prove out its value to the business as a whole as the creative yet rational source of future growth. (December 2008)

The Shift: Becoming Visionary Marketers Who Control Quest for Growth [PDF]
By Scott Davis
This article focused on key themes from Scott Davis' upcoming book, "The Shift," outlines a series of profound shifts that have ushered in a new era in marketing. This era is marked by Visionary Marketers who know that no one is better suited to help drive the growth agenda than the head of marketing. (December 2008)

News and Events

Michael Dunn’s new book, The Marketing Accountability Imperative, was released this month and presents cutting-edge ideas for generating unparalleled marketing performance. Read the release here.

Prophet expanded our innovation offering through the strategic acquisition of Play in the beginning of the year. To read the complete release click here.

In other Prophet news, our Academic Partner, Tülin Erdem, was recently named three-year editor of the Journal of Marketing Research. Read the release here.

Our Consultants on Hot Topics

Scott Davis comments on the SciFi Channel rebranding itself as SyFy in AdAge. David Aaker argues that consumers’ new thriftiness is purely a reaction to the current economy in DMNews. Aneysha Pearce talks to QSR Magazine. Greg Handrick comments on the UK Post Office’s recently announced plans of becoming a Post Bank in Marketing Week.

Spotlight on Speaking

Ad:Tech April 21–23 — San Francisco
Prophet Chairman and CEO Michael Dunn is hosting a media boot camp power session on the topic of "Marketing Effectiveness — Improving Accountability and Returns to Impact Business Performance." As a friend of Prophet, you can take advantage of a 35% discount on a full-conference pass. Please click here, and enter source code 35SPSF9. You must register on or before April 15th.  

ANA Regional Meeting May 6 — Minneapolis
Michael Dunn, Prophet Chairman and CEO, is presenting on the topic "How Great Companies Win By Committing To An Intense Customer Focus."

AMA Strategic Marketing Conference 2009 May 13–15 — San Francisco
Mitch Duckler is chairperson of the event, and Scott Davis will be presenting concepts from his forthcoming book, The Shift.

PDMA & IIR 7th Annual Front End of Innovation May 18–20 — Boston
Prophet is proud to sponsor FEI 09, where you will learn how to exploit the critical x-factors you need for innovation success. Prophet is hosting a panel at the event titled, "Innovating in a Brave New World." Use our discount code (FEI09PROPHET) to receive 25% off the registration price.

BMA 2009 Annual Conference June 10–12 — Chicago
Scott Davis, Senior Partner, is presenting concepts from his forthcoming book, The Shift.

ANA Regional Meeting June 17 — New York
Scott Davis will be co-presenting with Sean Burke, CMO, GE Healthcare Americas at this event. They will present topics from Scott's forthcoming book, The Shift, in a session titled, "Today’s Marketer, Tomorrow’s Growth Leader."

AMA BrandSmart 2009 June 18 — Chicago
Scott Davis is presenting topics from his book, The Shift.

2009 Shopper Insights in Action July 14–17 — Chicago
Peter Dixon and Andy Stefanovich are keynoting this year's conference in a session titled, "Inspiration for Innovation & Design." Prophet is happy to offer a 20% discount on the registration price. Click here to register, and enter promo code PROSHOPP09.

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