Content
 

Increasing Efficiency in International Online Marketing

Hermann_Bareis

Hermann Bareis    20/03/14

International Online Marketing

 

A Comparison Between Centralized and Decentralized Marketing Operations in Global Companies.

 

With the dawn of the golden age of global trade, companies that do business internationally must decide whether their services should be structured in a centralized or decentralized manner. While many factors of production are easily distributed across national borders, worker mobility and decision-command structures are more static in nature and are thus harder to transfer.

This is especially true when discussing the online marketing strategy of multinational firms. Should these activities be handled at the local level, in cooperation with local agencies? This approach can be beneficial because of the inherent local market knowledge and experience of those teams. In these situations, marketing budgets can be seen as “symbols of power” of local subsidiaries, and are mostly used to show favoritism rather than achieving measurable objectives. Ultimately, this is based on long-standing structures and habits of each local office, of which there are many different causes influencing outcomes.

Nevertheless, a locally-driven online marketing strategy still makes sense, especially given the rapid pace at which markets change in the digital sphere. Changes in legislation, customs duties, and taxes can each have significant impact on the openness of a particular market at any given time.

However, having an online marketing scheme that is too decentralized can create problems. For example, budgetary distribution amongst local offices can be difficult, especially when planning on a yearly basis. Typically, budgetary planning takes place three months before each new fiscal year and is then distributed to local offices and their agencies. What if it turns out that during the fiscal year, a particular country’s budget is too small or too large, based on demand fluctuations and local market conditions?

 

 

                    Infographic De/Centralized Marketing

 

 In the realm of online marketing, these challenges are magnified, due to the pressing need to measure and control the success of promotions and campaigns.

  • How can global activities be managed when each local office or branch has complete control over budgetary and agency/partner decisions?
  • How can KPIs be reasonably measured across countries if each affiliate acts as a silo, using different software tools, approaches, and metrics?
  • How can quality and a positive ROI be controlled for in online marketing communications when local offices lack a dedicated marketing expert to judge the quality of a particular agency or online marketing campaign?

    Given these scenarios, it is clear that a more unified and centralized marketing plan needs to be carried out from the HQ to the local subsidiaries. Of course, in reality this too can be difficult to implement. Therefore, it is best to use a hybrid method where activities are centrally planned, but executed and overseen by an international agency partner—bringing the uniformity of central planning and the necessity of local market experience together for a successful online marketing program.


    Central Planning & Implementation

    When online marketing is centrally planned and subsequently carried out by a global agency, there are several clear advantages. First and foremost, performance globally is not handicapped by budget in that changes in allocation can be made quickly and efficiently to respond to local circumstances and demand. This exchange mechanism dramatically increases ROI, because decisions are made not from a “my country first” paradigm, but rather from a “where can this budget have the biggest impact” one. In decentralized planning, it’s highly unlikely that a local office in China, for example, would forward leftover budget to their counterpart in Singapore—and this is doubly true for separate agencies operating at the local level.

    Secondly, controlling the activities of local marketing agencies (across markets) can be very time consuming. Language barriers between the corporate HQ and these localized partners commonly exist, making reporting difficult as well as identifying key objectives. Furthermore, merging all reports from all markets (and their respective local agencies) is another headache for organizations, and doubts are cast as to the overall cost-effectiveness (and time management) of using such a decentralized marketing and communications strategy.

    On the other hand, when marketing and communications are handled by a single global agency, these sorts of reporting and controlling issues do not occur. Rather than falling on the corporate HQ to coordinate and synthesize reports from all markets, the agency itself is responsible for this coordination—and can do so more efficiently because it has standardized tools, KPIs, and mechanisms already in place. These reports are instantly comparable worldwide and contain consistent KPIs for all global online marketing activities and campaigns. Thus, it is possible to quickly and easily ascertain a snapshot of global online marketing operations—making it a true apples to apples comparison—even across international markets.

 

                    infographic_2
Tools for Measuring Performance


There are generally three types of tools used in measuring the performance of online marketing campaigns:

 

  • Web Analytics/Web Tracking
  • SEO Analytics
  • Social Media Monitoring


A global agency will carry this mantra of efficiency into the tools it uses, keeping standard logs and reports across each country or market, so they are easily comparable and quantifiable.

With tools such as Searchmetrics (SEO Analysis), Brandwatch (social media monitoring), and effective.tracking (Web Analytics), it is possible to gain a solid overview of online marketing activities and objectives. These three tools provide the relevant data needed for global controlling of budgets and quality of all online marketing campaigns, from Baidu to Google worldwide.

Agency selection thus becomes an extremely important aspect in defining an online marketing strategy. If left to a decentralized process, in many cases the “cheapest” option is chosen, with little regard for quality, reputation, and controlling ability. Then when it comes time for reporting and evaluation, the agency cannot adequately measure performance, nor provide concrete data that is translatable across all markets and countries.


The Local Agency

The final selection of a local online marketing agency, at the decentralized firm, takes place in small and medium-sized offices—usually made up of foreign sales or technical staff—who are lacking in digital marketing knowledge. These individuals, while being knowledgeable about the company and its products, do not have the expertise to discern between agencies in their online marketing abilities and techniques. Subsequently, the most common criteria used to decide between competing proposals in that of cost, which tends to leave much to be desired in way of quality.

The combination of low cost, lacking online marketing expertise, and context-less reports are unfortunately quite common for most local offices when trying to justify budget spending on marketing activities. Furthermore, because evaluation and searching takes time, these sorts of contracts are frequently extended, rather than undertaking the task of finding a more competent local firm.

What gets lost in all of this back and forth confusion is that online marketing serves a very important function. It, as a business strategy, is responsible for producing measurable and qualified leads—as well as building brand awareness and maintaining market share vis-à-vis competitors.

For a central headquarters, judging the quality of local agencies can be quite difficult. Unlike local partners such as printers—measuring online marketing successes is more multifaceted and requires some explicit knowledge about techniques and strategies, as well as implicit knowledge of past experiences and local context. This is where the real value of using an international agency for online marketing across many different markets comes through.


Decentralized Control and Implementation

Of course, for some organizations complete centralized control of all marketing activities is not possible, nor is it beneficial. One commonplace organizational structure then for these MNCs is a tripartite division of the world into Americas, EMEA, and Asia, where each region has its own “central headquarters” and has authority over budgets, objectives, and strategy for markets under its stewardship.

Furthermore, in many companies, unilateral changes to organization structure are neither possible nor advantageous across all other business units. In these scenarios, those regional HQs can serve as the “central” planning for marketing activities. The same benefits of using a global marketing agency across these central planning units as well as the local offices still exist, in that reports are standardized and budgets are more easily-dispersed and managed according to actual market conditions. These comparable data and results are extremely valuable from a controlling perspective, in that it is easy to measure the success of campaigns and initiatives at both macro and micro levels of the firm.

 

Decentralized Control and Implementation

Of course, for some organizations complete centralized control of all marketing activities is not possible, nor is it beneficial. One commonplace organizational structure then for these MNCs is a tripartite division of the world into Americas, EMEA, and Asia, where each region has its own “central headquarters” and has authority over budgets, objectives, and strategy for markets under its stewardship.

Furthermore, in many companies, unilateral changes to organization structure are neither possible nor advantageous across all other business units. In these scenarios, those regional HQs can serve as the “central” planning for marketing activities. The same benefits of using a global marketing agency across these central planning units as well as the local offices still exist, in that reports are standardized and budgets are more easily-dispersed and managed according to actual market conditions. These comparable data and results are extremely valuable from a controlling perspective, in that it is easy to measure the success of campaigns and initiatives at both macro and micro levels of the firm.

 

 

                    Central/Decentral