These days if we hear a marketer saying that he/she is planning to adopt digital as part of their brand’s strategy, the individual is instantly categorised as one who is a laggard in realising the value of having a digital strategy. The other viewpoint will be that the organisation he/she belongs to does not understand digital at all (because there is nothing called a digital strategy anymore; it is all encompassing).
Google has published some interesting findings from their micro-moments research. There has been a massive shift to mobile in terms of originating points of customer journeys. Shifting between screens is a common phenomenon to fulfil needs, consumer patience levels are incredibly low and even average customer experience online is a trigger to switch brands and services. The most important, but expected finding is that consumers control brand experiences online by selecting their content and quality, timing and relevance of messages have a strong influence on brand perceptions.
Although the research focuses on micro-moments, the highlights are around the emergence of mobile-first as a mode of entry into the purchase funnel. This brings out the criticality of digital in any form of brand strategy. It is too late to consider digital as an extension or component of your core brand strategy. ‘Digital’ is core.
Developments in the last few months exemplify the constant state of flux digital mediums go through. Many of these developments are significant enough for brand marketers to sit up and take notice. Facebook realised the importance of mobile in consumer decision making and rolled out its Canvas ad formats (quick loading, full-screen takeover, highly immersive experience), Snapchat is planning to evolve its ad model by aggregating audiences for better targeting,Instagram extended its video ad limit from 15 seconds to 60 seconds and ran the first ones for T-Mobile and Warner Brothers and Pinterest, after launching their ad business in the UK, is attracting brands through its Promoted Pins Programme.
Brands have rapidly moved to a digital-first model. Burberry recently announced that it will make all its collections available on digital channels simultaneously with showcasing in fashion shows. Pepsi Max and Cadbury became the first UK brands to use Snapchat’s Sponsored Lenses platform for advertising. Apple and Hermes experimented with exclusivity by making the Apple Hermes watch available only in Apple and Hermes stores but quickly made it available online.
The digital-first mindset is not restricted to luxury or fashion brands only. An organisation famed for its marketing machine, P&G has quickly realised the strategic importance of digital-first. According to Marc Pritchard, Chief Brands Officer, Procter & Gamble, digital technology and mediums enable the organisation expand creativity in its advertising and marketing communication. According to him, it has already resulted in above average returns for shareholders and has provided the much confidence for wider digital adoption.
All the above trends and examples point towards a high degree of adoption of digital. But the key question to ask is whether there has been a mindset change in organisations who are increasingly using digital as a core component in brand and corporate strategy?
The answer is a “gradual and painful yes”. The mindset change is critical to make digital marketing effective and impactful. In a 2015 report, Proxima reported that up to a staggering 60% of global digital marketing spends is wasted.
One of the key findings from the research that Proxima did was the complexity to link digital marketing spends to commercial metrics of importance for the organisation. The one and only way to have a digital strategy that has clearly identifiable and measurable outcomes is to have the right mindset. Currently, there is a serious lack of understanding of how to make digital work, how to measure its impact, how to calculate ROI and how to integrate it as a core element of organisational strategy.
Executives at all levels struggle with the mind boggling complexity of digital mediums, a constant and rapid evolutionary process, an array of metrics and performance measures that have not been integrated with organisational and brand performance measures and an incomplete understanding of the impact on growth and equity of brands in the portfolio.
The struggle with effective digital adoption starts with a lack of focus. It is very easy to get pulled by the allure of digital metrics – 100 thousand shares of your branded content, 100k retweets, 500k likes on Facebook, 200k clickthroughs on a banner ad etc. The success of digital lies in on the performance of only one metric – engagement. To measure digital ROI, marketers need to increasingly focus on engagement. For example, the number of impressions your tweet gets is a useless metric. It is just the number of times a tweet appeared in the feed of Twitter users. If someone retweets or loves your tweet, it is a starting point of engagement. Sadly digital measurement models stop here. Organisations need to start here even if it the bottom end of the purchase funnel. Loyalty is important in today’s attention-deficit and impatient world. Engagement is the starting point for brands to create loyalty.
An understanding of digital engagement starts from an understanding of digital platforms and how to use them. Take for example Pinterest – with its visually appealing layout and format, it is ideal for raising awareness and generating interest for your brand. It does not have a “Buy” button yet, so the purchase stage of the funnel needs to be completed in a different medium (online or offline).According to Pinterest’s UK head of monetisation, the objective of the platform is to do something similar for “discovery” as Google did for “search” by stitching together a catalogue of ideas on a consumer’s smartphone every day. According to the platform’s marketing and strategic leads, Pinterest is for making your advertising dollars more effective by making your brands more “discoverable”.
Jim Beam and Bacardi have played the risky game of targeting the 21+ year old customer base on Snapchat. Consider the dynamics at play here:
- 63% of Snapchat’s monthly user base are in the 13-24 age group, of which only the 21+ age group can be targeted by alcohol brands
- But more than 80% of Snapchat’s user base are in the 21+ age group, but there are no definitive metrics on their frequency of usage of the platform
In sum, it is about trying to raise awareness among a sub-group with no accurate understanding of their frequency of usage of a channel. It is like traditional media planning done with a media TG, but with no targets on AOTS and Reach. The decision to select Snapchat to advertise Jim Beam Apple Bourbon and for a lemonade-rum cocktail from the Bacardi stable may be right for their respective owners, but may be a complete waste of advertising dollars for other brands.
The positive news is that the science of digital targeting has evolved a lot. The advent of programmatic ad buying, ad exchange platforms and cookie driven online behavioural targeting has made digital ad placement very focused. But the challenge remains around activation. Just like traditional segmentation, activating strategies against potentially attractive segments continues to be slow, ineffective or inaccurate. Even with high levels of accuracy in targeting, executives still struggle to gain meaningful insights on brand engagement and growth.
” Nine out of ten (90%) global marketers are not trained to calculate return on investment (ROI), and 80% struggle with being able to properly demonstrate to their management the business effectiveness of their spending, campaigns and activities” – Fournaise Marketing Group
The solution to this vexing problem doesn’t lie with digital education. Education is important but it is not a means to the end. There are plethora of digital marketing and branding courses and top universities are also now jumping on the bandwagon. But the key question remains the same – “My team is now digital certified so what’s next”?
To understand whether “digital” is right for them and whether “digital” should be a core part of broader organisational and specific brand strategy, marketers need to have answers for fundamental questions:
1) Why should digital matter? – This is the most profound question and is almost like the holy grail of success in digital marketing. Just like philosophical conundrums, there is no definitive answer for the question. But every brand who have successfully implemented a digital strategy, knew why it mattered and what they were after.
A first step in answering this question is an in-depth analysis of a brand’s consumers and to the extent digital has shaped their lives and behaviours. This means real in-depth understanding and not hypothesis driven or copycat behaviour analysis. Online behaviour differs across product categories and are strongly influenced by circumstances. Our brand discovery process will be markedly different when we are in a casual & relaxed mood vs. when we need to quickly make a decision.
The most important insight marketers should aim to flesh out is whether digital has a significant role to play around how consumers are considering and buying brands in the category in which the organisation operates.
The Independent became the first UK newspaper to move to a 100% digital-only platform and the last physical copy of the newspaper was published end-March. All other newspapers in the UK have a physical and digital presence both. So for an organisation to understand whether digital matters, it also needs to analyse how in-depth it wants digital to influence corporate strategy. Digital newspaper readership is a growing channel in the UK, so it does not come as a surprise when newspapers adopt partial or full digital business models.
On the contrary, look at the traditional Indian newspaper industry and its growth. This needs to be contrasted with the growth of mobile-driven internet penetration in the country, which would indicate a complete dichotomy.
For global businesses, this is a first and important piece of learning – Digital may matter for your brands in one part of the world but could be completely irrelevant in other parts. Would The Independent (or its subsidiary), if it had a presence in India, gone 100% digital? The answer would be a resounding no.
For brands to understand whether digital matters to them, they need to understand how digital matters to their consumers. This needs to go beyond just selling. Its about consumer empowerment, brand purpose, values, ethics and real-life problem solving. It is also about having a expert perspective on how digital has impacted its consumer’s way of life and modes of interaction with the relevant category.
Dove aimed to achieve just that by launching a social media campaign that helped women boost their self-esteem and confidence online.
2) What brand and organisational objectives will digital help in addressing, which traditional channels have failed till now? – This is a critical question. If marketers need to shift advertising dollars to digital mediums, then this shift needs to be explained through some form of shortcomings or failures of traditional media. If it is an expansion of marketing budgets to incorporate digital, then the question should be about the incremental benefits digital will provide.
If marketers do not have clear and specific digital objectives, then advertising dollars will be a waste and ROI can’t be calculated.
eMarketer conducted an interesting survey into media consumption habits of US households and compared them to media spends on different channels in 2015. Below are some interesting facts and figures:
- US advertisers would spend (est. 2015) $70.6 billion on TV advertising, which will be 40.2% of all major media spends in the US. The US population, in contrast, will spend 36.4% of their media time watching TV
- US advertisers would spend (est. 2015) $7.8 billion on digital video advertising, which will be 4.4% of all total media spending. But digital video viewing will make up 11% of people’s media time
Even though the average number of time spent on watching TV was declining and the same was increasing for digital, it still didn’t make any significant difference on TV’s impact. At the end of the day, the sum up of eMarketer’s research was that TV consumption of aggregated ad revenue was nowhere near that of digital.
Digital advertising has had its fair share of problems – fraud, non-human viewing levels, viewability in itself and more recently ad blocking. Mobile network operator Three announced it would block ads at an European level on its network. This news led to public announcements and voices of appeals from senior executives in the media buying and planning industry to save the industry from dying.
If marketers wish to switch spending to digital channels, then there needs to be a clear articulation of the objectives of digital marketing and how it is going to provide a boost to brand equity and growth (over traditional channels). ROI should be the critical metric here and it should be higher than ROI achieved via traditional mediums for comparable levels of spends. Also marketers need to invest in digital campaign performance measurement to the same levels as they invested in TV’s performance measurement. You cannot have a digital measurement budget that only allows you to barely scratch the surface.
If it is important enough to switch advertising dollars to, it is equally important to measure the outcome.
3) Is digital a solution for all marketing needs or does it need a play a niche role? – Digital is not an all encompassing medium that can replace ad spends on every other medium we know. People still watch TV, they still pick up magazine and newspapers to read and they still listen to radio. The Archers, one of the world’s longest running radio soap operas with close to 18,000 episodes, is still going strong in the UK.
According to research conducted by McKinsey & Company, consumer spending on print newspapers will continue to increase as publishers find synergies in content with digital editions.
Marketers need to understand whether they want digital to play a focused and niche role in overall brand strategy or do they want digital to be the driver of a brand’s future growth path. It is not an easy task to pivot the guiding points of strategy to digital in one go.
“Marketers overestimate the attraction of new things and underestimate the power of traditional consumer behaviour. Nobody ever got famous by predicting that things would pretty much remain the same.” – Bob Hoffman, retired Chairman & CEO, Hoffman/Lewis Advertising
Clients that I have worked with have adopted digital but haven’t given it the driving seat in overall brand strategy. But many other brands have done the opposite. Unilever’s commitment and focus behind digital advertising almost made it introduce a new standard into digital marketing measurement – 100% of the ad player must be in view when an ad is played online, at least 50% of the video must be played while in view, the video player’s sound must be turned on throughout and the viewer must press the Play button (and it shouldn’t be an auto start).
Unilever now intends to spend one quarter of its annual $8 billion ad budget on digital. In spite of such significant amount of spends, none of Unilever’s brands have stopped advertising on TV altogether. Across the world, in the complex network of agencies it works with, agency briefs would constitute putting in place a digital engagement agenda for brands like Rexona and Dove.
Some organisations have decided to exit TV altogether for some of their portfolio brands. Take for example, The Campbell Soup Co. in the US and its strategy around media spends for some of its portfolio brands. For some of its brands, it is completely moving out of TV as it focuses on implementing a strategy around enhanced brand experiences and gaining consumer trust (instead of selling it). But again it is driven more by its master brand strategy rather than a complete role reversal from TV. Also, costs have been cited as a major factor influencing this strategy.
5) Is there a clear understanding of the KPIs to influence and is there a process of linking performance to the commercial metrics of the business? – A clear understanding of digital marketing objectives, linking them to KPIs to measure and monitor and further linking them to commercial metrics is the recipe to follow for success. In a large number of instances, this doesn’t happen and the whole process is disjointed.
Avinash Kaushik, Digital Marketing Evangelist for Google, has come up with the guide below to cut through the maze of complexity:
Outcomes need to be linked to commercial metrics and also there needs to be a direct or indirect linkage to brand growth and equity. Without these critical links, the impact of digital campaigns either remain isolated or they are misdirected. Here is a nice Hubspot article that highlights the challenges of measuring brand awareness (one of the many metrics that digital marketing seeks to influence):
Creating a vision and roadmap around the questions above should be the starting point for digital adoption. The next stage is to outline processes and decisions that address each of these questions.
If we come back to the questions, a common underlying thread that runs through them is one of a broader understanding of digital’s impact. It is about mapping the organisation’s strategy, vision and values on a digital adoption spectrum.
The single biggest problem in digital adoption is the pace. Organisation’s are either too slow or too fast in adopting digital. The analogy is simple – no one becomes a long distance runner in a few days. The opposite is also true – no one becomes a 100m sprinter in a few days.
From the smallest to the biggest organisation, success in adopting a digital strategy is about piloting, failing fast, building success cases, gradual roll-out and wider dissemination of digital brand building practices.
Identifying the right pace comes with the identification of the right practices. The previous analogy again holds true – a marathon runner and sprinter’s training and dietary requirements are vastly different and for the right reasons. A great quote to end this long article would be from Marc Pritchard, Global Brands Officer, Procter & Gamble:
“We will never master all these technologies. As long as we try, we will forever be on our heels. I try to simplify by taking the mystery out of the new world and telling our people to look beyond the obsession of technology and turn our attention to what really matters – the consumer experience.”