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Contributing Writer

Note to John Chambers: Cut Your Marketing Budget by 25%

May 06, 20114 mins
Cisco SystemsData and Information SecurityData Center

Eliminating bloated marketing programs could slash costs with minimal impact

Cisco just announced a major restructuring effort in order to streamline decision making, bolster profitability, and get the company back on track with Wall Street. On the surface, it seems like Cisco is talking a very complex management structure and making it a tad less complex, but that’s another blog for another day. With Cisco now actively looking for ways to cut costs, I have a suggestion for CEO John Chambers — Cut your marketing budgets across the board. I firmly believe that Cisco could cut 25% out of its marketing budget and not miss a beat. Why? Over the past few years, Cisco seems to have adopted a Reagan “Cold War” era approach to marketing where Cisco spends tons of dough and dares other vendors to match it. Yes, this did change the industry but I would argue that the changes haven’t been very productive. Now many networking (and IT) vendors over spend and over market. In these tough times Mr. Chambers, Cisco has the opportunity to cut costs simply by moving from “buzz” to pragmatic marketing programs and messaging. Unfortunately, this may mean laying people off but I’m sure there are cuts planned across Cisco. In the meantime, here are a few concrete suggestions on where and how to address your bloated marketing budget:1. Cut trade show budgets by 50%. At every trade show, Cisco has the biggest booth, the most equipment, the most people on the show floor and a bevy of hosted lunches, prizes, keynotes, sporting events, etc. Why? It seems to me John that trade shows are a relic of our generation of the industry’s evolution and will fade away moving forward. Heck, Cisco could easily pass on Interop and VMworld and no one but the trade show companies would even notice. Didn’t Apple do the same thing? To be clear, I’m not suggesting a radical departure just an intelligent cut back of 50%. 2. Get out of product placement. I’m no expert here but everything I’ve read on this topic says that the ROI is marginal at best. Will any decision makers really care if Dwight Shrute from “The Office” answers a Cisco IP phone or that Jack Bauer uses Telepresence? I’ll bet a lot of viewers think that Cisco is some made up name just like, well Dwight Shrute and Jack Bauer. Seems like this money could be better spent on vertical industry marketing with stronger affinity to actual IT professionals. 3. Simplify your marketing messages. Navigating Cisco these days means understanding a myriad of initiatives, architectures, and marketing labels. As an example, look at your security products group. To understand what Cisco is doing, I have to figure out how Secure Borderless Networks, AnyConnect, SecureX, and TrustSec all work together. No one but Cisco employees has the time to do this. Think of all the peripheral savings in people, videos, and collateral you could achieve by trimming 9 marketechtures down to say 3.4. Ban PowerPoint. Okay, I’m being a bit extreme here but have you noticed how Cisco people can only talk to each other and the outside world by using PowerPoint (note: To be clear Mr. Chambers, Cisco is far from the only company that has this problem)? I’ll bet that it isn’t unusual to go through 20-25 versions of PowerPoint before coming up with the final version for product announcements. This is a huge waste of time, not to mention that your graphic designer budget alone is probably more than Arista, Extreme, and Force 10 spend on their cumulative marketing budgets. This is a process and cultural issue that needs to be addressed. 5. Cut your advertising budget. Along with product placements, it seems like a waste to do mass marketing ads. I’d push the CMO on this one and demand to see real ROI metrics. Yes, more people know the name Cisco and maybe even the “human network,” but so what. Is this selling product or increasing the share price? HP, IBM, and Microsoft do a lot of mass market ads but I don’t see any EMC, Oracle, or VMware ads and it doesn’t seem to be holding these companies back. Let’s face it, switches, servers, and routers aren’t exactly household goods.As a dominant player and market leader, Cisco marketing should be understated, cogent, and concise but it tends to fall in the opposite camp. Too often, this means hype, rhetoric, waste, and confusing mixed messages. A 25% cut might be painful internally but I believe that customers, prospects, and shareholders would hardly notice. I realize that in the grand scheme, my suggestions may result in trivial savings but every little bit helps. Besides, I have plenty of other ideas.

Contributing Writer

Jon Oltsik is a distinguished analyst, fellow, and the founder of the ESG’s cybersecurity service. With over 35 years of technology industry experience, Jon is widely recognized as an expert in all aspects of cybersecurity and is often called upon to help customers understand a CISO's perspective and strategies. Jon focuses on areas such as cyber-risk management, security operations, and all things related to CISOs.

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