At big corporations, marketing departments are pursuing a new Holy Grail. It is called "holistic marketing" - a phrase that expresses the growing desire of companies to use a greater variety of means to communicate with their customers.

The push into holistic marketing reflects two basic factors. Companies are losing confidence in the main weapon in their advertising arsenal - the television commercial - and they are growing intrigued by the internet and other alternatives.

But there is one big problem with the new holistic marketing regime - there is really no such thing as a holistic marketing budget. Moreover, it could take years for companies to adopt the refined measurement systems and flexible bureaucratic processes that would be needed to make holistic marketing a reality rather than an ideal.

"I am not sure that companies have really come to grips with it," says Barry Herstein, a senior vice-president who is heading the effort to integrate international communications at American Express, the US financial services giant.

Of course, marketing has never been simple. Companies traditionally divide their efforts into what is called above-the-line advertising, such as television, and below-the-line activities, such as direct mail.

But marketing is growing more complex because of technological advances that are giving consumers the power to avoid advertising. Digital video recorders are enabling people to fast-forward past television commercials, while software helps them block internet pop-up advertisements and unwanted e-mails.

The industry response has taken two basic forms. Marketers are looking for new places to put advertisements - ranging from displays above men's urinals to the screens on mobile telephones - and they are beginning to treat any contact with a consumer as a marketing opportunity.

The idea is to engage the customer wherever the customer happens to be - a holistic approach, in other words. As a result, advertising agencies are not only thinking about television commercials these days. They are trying to figure out how companies should answer the telephone when consumers call to seek information or register a complaint. They are seeking to make the shopping experience more interesting, bringing a new verve - and additional scientific firepower - to product packaging and store display.

Website design is emerging as a particularly powerful weapon for marketers. To forge closer relationships with customers - and get permission to send them e-mail solicitations - companies are looking to create irresistible internet sites offering information on everything from how to apply eye make-up to how to volunteer for a clinical trial of a new medication.

"The touch points have multiplied," Mr Herstein says. "If you define marketing as all those contacts that touch consumers, it's not just traditional above the line."

To allocate money for all these forms of marketing, companies would like to follow a policy called media - or channel - neutrality.

In a holistic marketing world, the idea is that money should flow to the most effective means of delivering a message. But this is where the process gets complicated at a bureaucratic level.

In the real world, money for marketing comes from marketing budgets. But in the new world, the lines between marketing and other business activities is blurring. That makes allocating resources tricky.

A website, for instance, could be seen as a form of internet advertising. But websites also function as virtual stores.

The money to build a site could come from a marketing department or a product development department, says Chris Williamson, author of the Bellwether Report, a study of UK advertising patterns for the Institute of Practitioners in Advertising, an industry group.

The definitional issues get even more complicated in sectors such as pharmaceuticals. At some companies, medical education websites - a key way of building relationships with customers - are the province of the giant research departments of the pharmaceutical companies. At others, marketing departments take responsibility, says June Dawson, director of Ogilvy Healthworld UK, a medical marketing company.

Mr Williamson says companies also use vastly different approaches to account for some of their in-store marketing activities.

For instance, some companies consider sales promotions to be a marketing expense, while others simply report lower revenue figures to account for the discounts.

"Different companies account for expenditure in different ways," he says. "It's becoming very problematic to categorise activities in distinct subdivisions."

Compounding the complexity is the difficulty companies are having in comparing the impact of different kinds of marketing activity. The language of marketing is derived mainly from television advertising. Companies pay media companies to, as the jargon has it, "buy eyeballs" - with little regard to whether they are covered by eyelids.

But in holistic marketing, advertisers are no longer interested simply in reaching customers, but in engaging them. They are looking for customers who are paying attention to their marketing messages and who might be persuaded to communicate their enthusiasm for a product or service to others.

There are companies working with measurement tools that help them compare the impact of different forms of marketing messages.

Procter & Gamble and Nissan, for example, have turned to a company called Integration in Nicosia, Cyprus, that uses a process called a market contact audit - or MCA - to gauge the effectiveness of advertising in a given medium for a given product.

But without the widespread acceptance of systems to measure the impact of marketing in different media, companies find it difficult to change their marketing spending regime.

"With some of this new media, it is much more difficult to put these budgets together," says Alan Rutherford, global media director at Unilever.

Rishad Tobaccowala, chief innovation officer at Publicis Groupe Media, says the basic problem is that in the absence of widely accepted metrics, corporate turf battles tend to break out.

"When you scramble things, you are changing people's jobs in an organisation and unless you have some measurement, people say, 'Why change?'" he says.

Mr Tobaccowala remains optimistic that companies will adapt. One sign of this, he says, was a decision a couple of years ago by Home Depot, the US retailer, to give its chief marketing officer, John Costello, responsibility for sales.

"There used to be this fight between marketing and sales," Mr Tobaccowala says. "Now, you are seeing more and more marketing officers getting more clout."

But industry observers such as Mr Tobaccowala say that it could take years before companies will be able to match their rhetoric about holistic marketing with compatible budgetary and management processes.

"The more holistic measurement gets, the more things will be done that way," he says. "We have just begun. It's a five- to 10-year process. The consumer, as always, will get there first."

Get alerts on Business school when a new story is published

Copyright The Financial Times Limited 2019. All rights reserved.
Reuse this content (opens in new window)

Comments have not been enabled for this article.

Follow the topics in this article