Wednesday, March 04, 2009

Programmatic vs. Institutional Marketing

At the invitation of my Board Chair, I had the pleasure of attending a speech at George Mason University given by Michael Kaiser, President of the John F. Kennedy Center for the Performing Arts and author of The Art of the Turnaround: Creating and Maintaining Healthy Arts Organizations. Prior to his speech, I was introduced to Mr. Kaiser, and as I reached out to shake his hand, I secretly hoped that some of his wisdom would transfer from him to me through osmosis. It came as a bit of a surprise that when I introduced myself, he knew who I was, and mentioned that he enjoyed reading my blog.

I admire Mr. Kaiser not only for his expertise in arts management, but also for his tremendous passion for helping struggling arts organizations. Most arts organizations are looking inward during this moment of economic downturn, trying to figure out how to adjust what they are doing to address anticipated future challenges. Mr. Kaiser on the other hand has made it clear that the Kennedy Center has a responsibility as a leader in the field to reach out and help other struggling organizations. I know that times are tough, and the economy has to be impacting the Kennedy Center as well, but even with less resources, the Kennedy Center has launched a new initiative called "Arts in Crisis" which focuses on providing planning assistance and consulting to struggling arts organizations throughout the United States. It truly takes a visionary leader to expand services in an attempt to fulfill an obvious need when resources are so scarce. And this is something Mr. Kaiser is personally committed to as he was proud to share that he has personally taken on consulting for 10 small arts organizations as part of this initiative.

That all being said, Mr. Kaiser discussed the difference between what he labels programmatic marketing and institutional marketing. Prior to reading his book, I had never heard of this distinction, but now find his argument incredibly valuable. He defines programmatic marketing as marketing that is designed to promote a certain activity (i.e. to sell tickets). Conversely, he sees institutional marketing as activities that are designed to promote the institution. He makes the argument that too many organizations do too much of the prior, and too little of the latter. I would have to agree with him. Most marketers feel comfortable with programmatic marketing because it has an obvious, quick and measurable impact (mostly measured on ROI, or Cost of Sale, etc). We don't feel as comfortable in institutional marketing because its not as easy to measure, and it takes a dedicated effort over an extended period of time to see the results.

That being said, the results of a well executed institutional campaign can be remarkable. Mr. Kaiser notes that an eight year aggressive institutional marketing campaign has been mostly responsible for a 250% increase in contributed revenue at the Kennedy Center, and when he was previously at Alvin Ailey, they doubled their fundraising in two years. A programmatic marketing campaign is limited in its abilities and scope because it lives in a finite period, where institutional campaigns pay dividends in both earned and contributed revenue because they help brand the institution and sell the vision. Why be satisfied with selling a slice when you can sell the entire pie?

To me, it all goes back to planning. Mr. Kaiser advises organizations to constantly be working in the future -- planning seasons three years in advance, crafting a long term vision, etc. Too many of us get bogged down in the day to day, and who can blame us, we are only human. When there is a fire, we all concentrate on putting it out, but if we are constantly putting out fires, it is good to be reminded that we also need to put effort into digging new wells, for without new wells, we will eventually run out of water for the fires.


JD said...

This is so important. What a valuable post!

emarketed said...

Thanks this posting. Great info!

Unknown said...

Enjoyed the post - the distinction between the two. I am new to the art/clutural industry (having spent my entire career in the corporate sector doing marketing for Fortune 500 companies). I'm now challenged with unsophisticated thinking regarding marketing/sales, etc. Question: Where in the art/cultural organization should Institutional Marketing report into? I'm working in an organization that has it separated reporting into External Affairs.