Q&A: Mark Phibbs, Sr Director - APAC Marketing, Adobe Systems

'CMOs are becoming the new CFOs'

Adobe Creative Suite (CS) 5.5 leverages tablets like never before and improves video performance. It fine tunes what the CS 5 started last year, helping feature filmmakers slash post-production costs by 80 per cent in some cases. For other creative professionals it squeezes a week’s work in one day, says Mark Phibbs, senior director of APAC (Asia-Pacific) marketing, and global channel marketing at Adobe Systems. In India to launch the CS 5.5, Australia-based Phibbs talks to Sayantani Kar about a recent shift in Adobe’s marketing strategy in its quest for new areas of growth.

What is the most exciting marketing challenge before Adobe at this point in time?
There is a renaissance in marketing. The chief marketing officers (CMOs) are now becoming the new CFOs (chief financial officers) of organisations. Why is that? Because online marketing is becoming the way of marketing. Across APAC, including India, roughly 10 per cent of the marketing spends go into online marketing, the rest goes into traditional marketing. In the US, 30 per cent of the marketing spends is online. Adobe spends 74 per cent of its marketing budget online. That is because most of our customers are online. Even four years ago, it would have been 30 per cent, the average for most US companies.

 

What about Adobe’s role, or shall we say contribution, to all this?
Online marketing is creating a wonderful world for consumers who can be targeted more precisely according to their needs, whatever the device they use to interact. For content creators, that creates some challenges because it is no more about producing content for just one medium, such as a newspaper, magazine or television. You have to create content and deliver it across myriad devices and formats. We provide all the tools to do that. So, the tools for content creation and delivery, which we have offered for years, have been upgraded with HTML 5 supporting all platforms. We analysed the market and saw that almost everyone uses our tools in different media to create content. When we spoke to our customers, they said, “we want to create content once and deliver it on all devices without re-creating it multiple times”.

More importantly, the reason why online marketing is taking off is marketers can now analyse the return on investments through analytic tools. We purchased Omniture (in 2009), the world’s leading analytics company, so that a marketer can take every piece of marketing spend and say, “here is the revenue I am driving”. All the social networking marketing activities, for example, can be measured by a social networking analytics tool which can link Twitter trending topic to the number of new orders the brand gets and the revenues generated as a result. This is huge, it is the Holy Grail of online marketing.

Are you saying you want to provide what they call “end-to-end solutions” for online marketing?
Yes, ‘create, deliver and monetise’ is the motto developed over the last four years or so. This whole loop is super interesting and we as a company, have it as one of our three key areas to focus on.

Which are the other two?
One is customer experience management. We as consumers are used to very high standards now, what with using app stores such as iTunes, numerous online activities and really interactive websites customised for us. Then, of course, we need to do our taxes and bank work online. Standard Chartered is a great example of being very innovative on this front. Mostly we find websites which are clunky and don’t make for a good customer experience. So, many organisations, including government institutions, are investing in customer experience management. We have the tools, which include a lifecycle group of products that link to back-end transactions. There is also the challenge of managing all this content. So we bought Day Software (in 2010) which has content management solutions. Cathay Pacific recently used it.

The third area of focus is digital media, which has been our traditional source of business — the Photoshops, the Illustrators and the DreamWeavers. There is a new area aligned to that — digital publishing. It allows magazines and newspapers to move to the online world. Once produced in InDesign, for example, how do publishers take the products online? So, we work with the likes of Wired and Martha Stewart Living to move them to the online world. And sometimes when doing the standard print, you need to do ‘print plus’ online — a more engaging experience with video and social networking. With our cloud-based services, people can publish their online magazines globally. One can go to one of the online stores such as Amazon and view a magazine from anywhere in the world. The cloud will be managed by Adobe. ‘Create, deliver and monetise’ will come into play here as well.

What will you focus on in India?
Digital media is still number one. We have already launched our digital publishing services, the first being Mint’s iPad application launched in February, 2011. In online marketing, India is still behind with an average of 10 per cent of the marketing spends into the medium. But as broadband improves and people start spending online, we will increase our focus on it. I reckon Indian companies on an average will spend up to 50 per cent of marketing budgets online in the next five years.

What is the time-line for rolling out the different services?
We will invest in our Omniture analytics business unit in the next two years. Over the two subsequent years it will be customer experience management. Indians have a lust for new technology and customer experience. That is why it could leapfrog some of the trends in other countries. As the CEO expects the CMOs to be CFOs, any CMO who is not, is going to feel very uncomfortable. Especially, when pitching to the board, say, a four million dollar TV campaign. She will be asked, ‘What’s your online component?’ AsiaPac is the fastest growing region for Adobe and India was the fastest among APAC countries last year.

Omniture was your biggest buy after Macromedia but observers were skeptical about the move, saying it would only bring in additional sales, rather than add to core competency.
Omniture is the second largest software-as-a-service (SaaS) company (after Salesforce) in the world and is cloud-based. It will play a major role in the monetisation of the content that get created by our tools.

Traditionally, a company and its IT solution providers would concentrate on the IT manager and the CMO would be forgotten. At the same time, in traditional marketing, the highest paid person, say an APAC marketing head, had the last word on what the creative content would be, which was more like a stab in the dark. She acted as the advocate of the consumer but not with much idea what the consumers would actually think. Now, with social media analytics, you can let the customer decide. For example, our Facebook page on Photoshop has 2 million fans; so all we have to do to test something is ask ‘What do you think of this?’ Analytics will also show what part of the campaign people like the most. Omniture’s latest product is a social analytics tool to measure trending topics in social networks.

In digital publishing, we are also doing something similar with Martha Stewart Living. She can now analyse what pages in her magazine her readers like the most. Therefore, she can get back to advertisers saying, “you know page 8 and 9 have four times the number of readers than any other; therefore if you want an ad on those pages (as opposed to the inside cover, traditionally one of the more valuable pages) it is going to cost you double the other pages”. Advertisers who advertise in online magazines get four times the brand engagement they get in print magazines (estimated through market tracking and focus group research). In the monetisation space, the other competitor we are likely to see is IBM who’s getting into this.

Would online marketing analytics be relevant for non-IT companies who might not be using the web heavily yet?
Even for non-IT companies, it will be the same trend. Online marketing will become a key marketing element. We, for example, will be able to tell these companies how many orders a Twitter trend could lead to and hence the following revenue. Which is why the CEO will suddenly see the CMO as the CFO. She (the CMO) can say, “I spend one dollar and I will get four back”. Earlier, she would say, “I will spend a dollar and we will do a brand campaign. Trust me”, and then a market research six months down the line would follow. The exercise would be a leap of faith.

Look at an FMCG product like the Old Spice bodywash and its campaign that broke last year. It had creative, funny and aspirational content to begin with. But it went viral and became the hippest fragrance and a news phenomenon because the way it used social media. An automobile company such as Mercedes Benz used digital publishing to bring out their brochures globally, complete with a 360-degree view of the car and social networking with other Merc owners’ views on the car.

The consumers are taking that power in their hands, but the manufacturers are giving them that environment to build brand loyalty. It is a double-edged sword because social networking could point out a poor product experience. It really challenges organisations in terms of their PR and communications strategy because you need to be genuine and quick to respond rather than say, “no comments” as earlier. It is going to challenge advertising agencies.

Have you done any innovation in marketing Adobe’s products?
One of the mainstays of our marketing is trials. In the past we would have just allowed trial downloads but now we are nurturing these trials. So, every time someone takes a trial, we send an email asking them about it, contrasted with earlier products they have used etc. This has helped us build closer relationship and conversions have increased by 10 per cent in the early phase (running for a few months).

Globally, I run ‘seeds of innovation’ to make Adobe a more innovative marketing organisation. I run it with a board of people from around the world and we ask for submissions from our own staff. We review those and award the winner with $100,000 as seed money to prove the idea. One of the ideas that came up was ‘gamification’. When you play an online game, it can get really engaging. The trials of our products are somewhat dry for users. Now we are adding gamification to it. When downloading Photoshop, for example, you find a game which tests your Photoshop skills compared to someone else in a social network. We are testing the concept.

But you have stuck to events along with online marketing, especially in India...
We do a lot of live seminars. There is no substitute for connecting directly with customers. But we are moving more of our events online. For example, in Korea, we did an online launch of CS 5.5 rather than a live launch. We used Flashmedia to broadcast from the studio along with Twitter feeds. We had 6,000 people attending online. We did the event at 25 per cent of the cost of a physical event. This was the biggest one we did in the world and the first complete online launch in Korea. At a conservative estimate, we touched 60,000 people via Twitter.

Compare this with 6,000 people in a ballroom in Mumbai. The challenge in India is broadband which is still not great, So we will have to do live events. But we will strike a balance with updates being launched online while big launches done in the real world. To reach those who are not connected on the internet, we will have our corporate social programmes. We are training around 1,000 teachers of 200 government schools across seven districts in Rajasthan on how to use our tools to create audio-visual teaching content with the help of the government and an NGO.

How different is marketing in India from other countries?
It is similar since our brands are consistent and so is the marketing approach. But we still have to customise. India needs more institutional targeting. For example, there are a lot of individuals in Australia who are aspirational consumers and would buy our creative products. In India, similar individuals would not buy genuine products; so there is no point marketing to them since they will buy the pirated version anyway. There will be no return on our marketing. Instead, I would target creative professionals — the web designers, the photographers, the videographers — who are with businesses. We will concentrate on businesses — small or medium — first.

You are saying piracy is a big threat...
It is the biggest challenge. The piracy rate in Australia, for example, is 20 per cent while here (India) it is 60 per cent. So, while business is bigger in Australia than here, in truth, it should be much more in India. As India moves up the value chain and produces more intellectual property, it will be in its interest to respect it.

Adobe is looking at web delivery of its products in India. When can we expect all the different pieces of the puzzle to fall in place?
We will have an Adobe store, where you can purchase either through downloads or delivery, in place within the next six months in India. We will then add a subscription option by which you can pay for use by the month. Cloud-based services like our digital publishing solutions are fee-based where you pay a fee for every publication. In the next six months we would also look at our partner network to determine whether to increase or decrease the number based on effective returns.