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Is AR really considered strategic in APJ?

That’s a pretty scary question for me to ask, when I spend many of my working hours pitching the strategic value of AR to ICT vendors and service providers of all shapes and sizes. It’s a question posed partly out of frustration, but mostly out of curiosity.

As with many of these things, it took a single event to trigger broader consideration of the state of AR across APJ, and how this marketing discipline is truly regarded by vendors.

The trigger was a phone call from the regional AR lead for a large multinational vendor telling me she was leaving – this week – to take on a bigger, more challenging role with another vendor. Not unusual, this happens all the time – personnel turnover is just part & parcel of the IT business – but it left me wondering, what happens now?

Out of respect for the individual and the company she most recently worked for, I’m not going to name names, though many folks reading this will know who I’m talking about. She’d be embarrassed to hear it, but her departure will leave a gaping hole in the marketing communication function within the vendor concerned, though there are several others who contribute positively to the AR program in various ways.

Without doubt, this individual is one of the savviest AR professionals I’ve ever worked with, and I’ve worked with her on several projects at a couple of different vendors. She is held in high regard by all the analysts in the region who matter – and many who don’t – as well as by her internal stakeholders and spokespeople. She “gets” the strategic value of AR, and is a passionate advocate of leveraging AR to influence sales.

When she took on the role of AR lead at this vendor, the APJ AR program had been in hiatus for over a year. It was performing poorly in our AR perception study, Understanding the Influencers, but over a couple of years she was able to bring it back into the leadership groups in the market segments where it competed.

 In praise of “AR heroes”

But this isn’t a story about this individual or the company she worked for. It’s not a criticism of that vendor, or the other folks who contributed to the AR program – it’s about the bigger picture of AR in the APJ region. She is just one of a handful of “AR heroes” who lead the profession in this region, who apply their passion and organisational skills to deliver great results for their employers, despite having far fewer resources at their disposal than their peers in other parts of the world.

And this is pretty much the nub of the issue. Vendors continue to under-invest in AR in the APJ region, though they have some great champions who punch above their weight. I’ve seen this scenario before, and sadly, I think I will again.

In most cases, vendor AR programs in this region are driven by single individuals, some of whom juggle their AR responsibilities with other disciplines such as PR or market intelligence. They are generally supported by other marcomms professionals to a greater or lesser degree, as they should be – they’re generally engaging with analysts in at least six of the 13 or more countries included in their sales territory.

When one of those individuals leaves a vendor, so too does much of the knowledge built up about the analysts & which ones are the most important, which areas they focus on, how they like to engage with the vendor, and much, much more.  Rarely is there any succession planning, so the search for a replacement often starts with a blank sheet of paper and a long lead time.

In the meantime, the AR program slowly grinds to a crawl, if not a complete halt. Analysts are demanding individuals – when they’re being looked after, they’re happy, but when the information flow dries up, they can become difficult. They become reluctant to recommend vendors & solutions to their clients, because they’re not sure they have the latest insights & information.

Different strokes for different folks

This situation wouldn’t be tolerated at “headquarters”, but it’s situation normal in APJ. Why do vendors continue to under-invest in AR in APJ? Is it that they don’t consider AR strategic? Or that they don’t consider the APJ markets important? Or both?

Maybe it’s because vendors tend to apply standard frameworks across the world, regardless of the local market conditions. One analyst whose opinions I respect – located in APJ but supporting clients worldwide – has repeatedly told me over the years that most vendors regard APJ as a sales territory, therefore not requiring any depth in product management or marketing. Another – who also has extensive regional marketing experience – has often lamented that there is no correlation between regional marketing budgets (low) and regional sales targets (high).

I’ve certainly seen plenty of these situations – global marketing budget cuts of 10% imposed universally, including in countries growing sales at +100% each quarter! Global headcount freezes placing regional AR requisitions on hold indefinitely, despite “exceptional circumstances” bypassing the rules back at headquarters. The list goes on…

As I noted in my earlier post Why do AR in APJ? this region is home to two of the fastest growing economies in the world – China & India – which are buying technology at unprecedented rates, high growth markets in ASEAN, and more mature but technology-hungry markets such as Australia and Japan.

Certainly, it makes sense for vendors to invest in sales resources to service these markets, but doesn’t marketing pave the way for sales? Doesn’t it make sense to invest in marketing – and in AR specifically – to educate, inform and influence those sales prospects?

Personally, I’d like to see this role replaced with another “AR hero” within 2-3 months, but there ain’t that many of them, and only time will tell.

What do you think? Why don’t vendors invest in AR in APJ? Are “AR heroes” the best answer? I’d love to hear your thoughts, whether you agree or disagree.

Cheers,

Dave

12 Comments Post a comment
  1. Dave,
    A timely note. Sadly having been part of the community for many years now, the strategic relevance of AR in APJ has not accelerated with the market. Some large vendors basically ignore, or outsource AR to PR/media relations with no defined strategic outcomes or direction. Others like the firm mentioned are at the influence of a strong connected lead and once this is lost, can have a slow recovery.
    On a positive note, I have see some mid sized MNC firms benefit from dedicating resources in the region to AR that allow them to punch above their weight. I won’t name them for now, but it does enable them to be part of a dialogue with analysts, often ones that their larger peers/competitors do not have the relationships to be involved in.
    Phil

    June 14, 2012
  2. Dave Noble #

    Thanks Phil,

    As always, I could have written more on this topic… Your point on the lack of acceleration over the past few years is very pertinent. It seems that every time one vendor adds resources and/or commitment, another one drops the ball – that’s the frustrating part for me, as I’m sure it is for many analysts.

    cheers/Dave

    June 14, 2012
  3. Thanks, I am sure you will write a lot more about it. To be honest and fair it is a very complex subject. We! as the analyst communi play a part as well.
    We need to consider that factors such as the US HQ of many analyst firms and vendors plays a role leading to often driving perceptions of relative immaturity of the analyst skill set in APAC.

    Given that Gartner has global analysts, Forrester has invested with my former Springboard Research colleagues amongst other initiatives, this justification for less investment by MNC vendors does not cut it anymore.

    June 14, 2012
  4. I’d suggest that AR is not alone with this challenge – and part of this is the fact that as you alluded to, vendors are generally doing well in AP (look at the growth of AP as a share of global revenue for nearly all major vendors) and therefore they probably feel that they don’t need to invest as much in order to get the “easy” growth. I am guessing that AR spend levels in AP compared to “home market” are similar to those of comms, marketing, advertising and other dpts and functions. If I look at the vendors in AP that treat AR most strategically, most of these vendors are based in AP (i.e. Indian services and software firms).

    Perhaps a part of the issue is also that most of the analyst firms are HQ’d outside of AP – so the vendors feel they need to spend most of their time focused on HQ? But as Phil stated, the investments in region by Gartner, Forrester & Ovum are significant – so this should not be a real reason not to invest in AP…

    But also it is worth noting that while the investment levels in AR and the strategic significance of AR in AP is not what it should be, the AR folk in region regularly punch above their weight. All of the best and most memorable analyst events or interactions I have attended (bar one or two) were based in AP and run/managed by AP AR folk. While I know this is not addressing the core of the debate, I thought it is worth noting that sometimes lower investment levels and lower levels of strategic value can still achieve the right outcomes for the analysts and their clients.

    June 14, 2012
    • Dave Noble #

      Hi Tim,

      Many thanks – great points as usual. Let’s try & deal with them individually:

      You’re right, APJ is the “poor cousin” when it comes to marketing budgets relative to share of revenue, & AR is just part of that. That said, some vendors seem to invest very heavily in customer events in the region, probably more so than they do in more mature markets, and that’s obviously great from a sales/lead generation perspective. Some would argue that that’s “lazy” marketing, which is the point I think you’re making…
      In terms of regional vendors, my view is that their AR investment is quite mixed and not necessarily strategic. Many local vendors I’ve dealt with prefer to focus their AR efforts on the US & Europe – because that’s where the MQs and the Waves are written!! – and pay scant attention to their local markets. So they also devalue the influence & importance of analysts within their own growth markets. Not universal, of course, just as not all US/European vendors do AR badly in APJ.
      I don’t buy into the “New England conspiracy” like some folks, but I would say that “US myopia” forces some vendors to focus their AR efforts on headquarters rather than on regional analysts. Their mistake. There really is quite significant investment by the big global analyst firms , but the vendor investment doesn’t necessarily follow. I’m crunching some numbers on regional headcount – subject of another post to come!!
      I think you’ve hit the nail on the head around events & interactions. This is mostly the work of the “AR heroes”, because there are some damn good ones in APJ. I’m sure they also exist in North America, Europe and other parts of the world (and other marketing disciplines), but it’s the ones in APJ that you & I mostly deal with. But how much better would they do with better resourcing, funding etc?

      June 14, 2012
      • Yes – after I posted my thoughts I figured that most of the regional vendors who do strategic AR work in AP do it for the EU & NA analysts – and less so for AP-based ones. I mistook “being in region” with “focused on region”.

        June 14, 2012
  5. Myrna Van Pelt #

    Hi Dave, a great post and worthy of comment. Is the answer possibly a combination of factors, one of which is reduced levels of understanding across the broader APJ region of the value of AR itself? In my previous AR role across APAC, I encountered reticence and lack of awareness of the powerful influence that analysts can bring to the table, in contrast to the more mature market in Australia. That said, and we all know this as referenced in your post above, there are many amazing AR heroes across the region, but far too few and certainly not enough to provide the education and guidance that these APJ based vendors might need.

    Is this something that analyst firms themselves can ponder on in tems of educating the larger vendors? But realistically, is this their role? I’d venture to say no – and that vendors should by default have the requisite understanding and recognition of the strategic value of AR.

    June 14, 2012
    • Dave Noble #

      Hi Myrna,

      Thanks for the comments. You’re right, I think we need to be aware of how many things are on a marketing executive’s radar – with so much “urgent” stuff happening, the long-term, strategic value of AR often gets overlooked. And if you’re not looking at an issue, then you won’t see the impacts – positive or negative.
      I don’t think any single group has a responsibility in this case – I think that everyone in the broader analyst/AR/vendor marketing community has a role. Collectively, we need to try to educate “headquarters” operations, wherever they might be, of the value of engaging with analysts at a local/regional level, which might loosen the purse strings to fund AR a little better.
      I’m an idealist in this respect, but it is a long game…

      cheers,

      Dave

      June 14, 2012
  6. Scott Stewart #

    Hi Dave, another great post and good comments as well.

    Perhaps the challenge that AR face is similar to any business unit vying for a better share of the budget, what is the ROI measure against effective AR investments?
    How do you measure the return from good analyst engagements and how do you convince the execs on this ROI front?
    It seems that many execs feel that whilst its important to ‘keep the analysts happy and engaged’ this is mostly to avoid ‘bad press’ from the analyst community and the sales targets will really happen regardless.
    Phil makes a great point, it is up to analysts to support AR and give them some measures or feedback on how an effective AR engagement/exchange has resulted in an effective client engagement/exchange which then resulted in a positive procurement outcome for the client and the vendor.
    Funding is always linked to business case which is always linked to ROI, just curious how easy it is for AR to measure and report on this? Be interested in hearing.
    Cheers
    Scott

    June 14, 2012
    • Dave Noble #

      Hi Scott,
      There are a number of ways to measure ROI from AR, some of them good, some of them not so good. The only way to do it well is through a mix of metrics because there is no silver bullet – that’s true of most other marketing disciplines, many of which are less budget-challenged despite also having some pretty fluffy metrics. But you’re absolutely right that many execs aren’t convinced of the value of AR.
      Your next comment regarding avoiding “bad press” is indicative of the challenge that the AR & analyst communities face. First, it continues to astound me that many vendors still can’t distinguish between analysts and journalists and consider their written outputs to be pretty much the same thing. Second, it’s interesting that some vendors would do AR to avoid a negative ie bad press rather than to deliver a positive ie recommendations to customers & prospects.
      Yes, AR is just one of the many marketing tools that a vendor has in the bag, it’s just unfortunate that it so often gets left at the bottom…

      cheers,

      Dave

      June 15, 2012
  7. Jeanette Tan #

    Hi Dave,

    You highlighted many common challenges faced by APJ professionals who have been in an AR role for years or have recently taken on AR responsibilities. Thank You!

    I agree with Scott Stewart that the AR function needs to compete for resource$ just like any other business unit. It’d be great to receive a handout upfront, If not, then the onus is on the AR team to prove the strategic value of AR to internal stakeholders on an ongoing basis. The optimist in me is bent on believing that AR investment will increase as a result. It will take time, but it is likely to increase.

    Before conferring AR hero status, I wonder if we need to consider the following as well … Did the hero/heroine leave his/her organization’s AR practice in a better state than when s/he found it?

    June 15, 2012
    • Dave Noble #

      Hi Jeanette,
      Thanks for the comments. I’m an optimist like you & I’d like to think that if AR proves value, then it should get (more) funding. Unfortunately, the realist in me knows that getting the attention of those who hold the purse strings is often tough, regardless of how good your story. But we live in hope… 🙂
      I’d also like to think that everyone strives to leave their program in better shape, regardless of whether we confer hero status on them (that’s my optimistic side). But I’m a tough judge, so anyone I consider an AR hero – and it’s a pretty subjective thing! – is certainly going to have left things in much better shape. The onus is then on the business not to waste that legacy.

      cheers,

      Dave

      June 15, 2012

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