Digital Marketing Revolution

The marketing industry is undergoing a digital transformation. It is necessary to pay attention to the expanding influence of social and digital media in today’s world. Social media platforms such as Facebook, Instagram, Pinterest, and Snapchat foster a more connected society by encouraging greater communication and sales to a larger audience. Artificial intelligence (AI) and the internet of things (I0T) are made possible by digital media.

Digital Marketing offers a fantastic opportunity to engage customers, but only a few businesses have fully used it. That isn’t to imply that businesses aren’t making an effort. In the United States, digital advertising spending is expected to surpass television advertising spending in 2017. According to reports, several markets spend more than 40% of their media advertising expenditure on digital marketing.

However, increasing the digital marketing budget is insufficient. Successful businesses are also changing the way they operate. In digital marketing, traditional marketing approaches such as broad segmentation, lockstep campaigns with several handovers, and marketing funnels through which all consumers move in lockstep have no place. If your firm is still dependent on old ways of functioning, it’s time to make a change.

So, what’s hot in digital marketing right now? Leading businesses are leveraging three forces that have fundamentally altered the marketing landscape:

• Real-time access to vast amounts of data to inform their efforts
• The ability to build long-term, multi-channel connections with customers (as opposed to one-way, scattershot interactions)
• Flexibility in deploying multiple concepts and gathering real-time customer feedback

                                       

BCG and Facebook partnered with industry leaders to apply cutting-edge digital marketing methods to a specific business challenge. We present case studies of corporations that have successfully launched digital marketing campaigns and discuss the modifications that businesses must undertake.

WHY NOW IS THE BEST TIME TO CHANGE?

Consumers’ media consumption habits have altered considerably in recent years, necessitating a rethinking of marketing strategies. It aids in the comprehension of the new environment.

Consumer behavior is rapidly changing. The younger generation, in particular, has mostly abandoned print newspapers and magazines in favor of digital media, while broadcast television is also losing momentum. It’s not as if people are spending less time watching or listening to media. In recent years, however, media consumption has increased. Traditional media is simply being consumed less frequently. Overall viewing in Europe went from 44 hours per week in 2009 to 48 hours in 2015, according to Statista, although conventional media lost 2.5 hours while digital consumption jumped by 6.5 hours. According to Facebook data, the average person in the United States now spends about 60 minutes a day on Facebook, Instagram, and Messenger.

Consumers are also becoming more technologically sophisticated, and traditional marketing approaches, as well as intrusive or irrelevant information and messages, are becoming increasingly irritating. According to e-Marketer, more than 25% of all smartphone users have installed ad blockers, and the number is steadily increasing. Consumers rely on recommendations from people they know and trust more than ever before when choosing new products and services. According to the Word of Mouth Marketing Association, personal recommendations are now five times more trustworthy than brand marketing.

Advertisers track their customers on the internet. Although total ad spending is still expanding somewhat faster than GDP, digital advertising accounts for the majority of this rise. According to Magna, spending on mobile Internet video has increased year over year since 2011, while spending on social media advertising has climbed 40 percent to 60 percent per year. Companies are swiftly approaching a moment where they will spend more money on social, search, online video, and display advertising than on traditional media.

DIGITAL MARKETING IS BEING TRANSFORMED BY THREE FORCES:

Three major trends are altering marketing, and those who can ride the wave will gain a significant competitive advantage:

• Marketing may now make use of a wealth of real-time data. For decades, marketers estimated the state of the marketing funnel using proxy data based on last month’s sell-in or targeted research. Companies can now analyse a wealth of consumer data—media data, CRM data, app usage data, and more—to better understand where individual consumers are in their buying journeys, what they’re looking at, when they’re looking at it, where they’re located, and how they’re responding to specific advertising messages. Companies are increasingly able to follow customers on their journeys, target with greater precision, and monitor the effectiveness of specific engagements.

• To produce company value, marketing is shifting away from one-time transactions and toward long-term connections with customers. Marketers have long sought to increase brand loyalty and love, but they’ve only been able to achieve so through one-way exchanges that prevent direct touch with customers. Digital channels enable two-way relationships that can create loyalty and advocacy across touch points and channels throughout a consumer’s lifetime.
• Marketing is taking use of digital’s flexibility and quickness. For decades, marketing has been centered on the slow world of television and print advertisements, which necessitate extensive creative processes, months of fine-tuning, and a great deal of uncertainty about market response. Modern marketing takes advantage of digital’s natural flexibility to save time and money while increasing effectiveness. Companies increasingly employ A/B testing to quickly implement many concepts in parallel while receiving rapid feedback. Because the testing focuses on cost-effective, one-to-one engagement rather than one-to-many interactions, it provides for extremely precise and speedy course correction. In this approach, digital marketing enables businesses to achieve broad reach and customization while also providing the benefit of continuous optimization (rather than burst campaigns that can be analyzed only after the fact). Additionally, with the rise of automated online advertising, ad management and delivery can be more cost-effective. Most businesses will need a thorough rethinking of their strategy, organization, and working methods in order to fully profit from these benefits.

CONSEQUENCES FOR ORGANIZATIONS

Standard processes and working methods will no longer suffice in the new world of digital marketing. Organizations that have been accustomed to traditional, slow-paced, unilateral marketing will have to change—from the top down.

Develop new skills, abilities, and tools. Advanced analytics, test-and-learn media design, and data management are among the key talents required by the new marketing model. Marketers will be at the centre of this shift, as they must relearn their craft while reclaiming their role as critical business managers. Existing marketing teams will need to be retrained, and new talent will be needed to fill in the gaps (which may well expand the number of people involved in marketing).

Companies will also need to build explicit strategies for acquiring, integrating, and analyzing data, both internally and with partners, as well as a new technical infrastructure.

Ensure a significant increase in speed and agility. To gain the benefits of continuous digital marketing optimization, decision-making must be accelerated substantially. Marketers should be given clear objectives and be given the authority to make critical decisions. Teams must move rapidly, with few arguments and handovers between units. Today’s marketers must be able to work closely with customers and be given the freedom to iterate, learn quickly, and modify approaches in minutes or days (not weeks or months).

Create cross-functional teams that work together to break down silos and get closer to the customer. Control over the “four Ps of marketing” (product, place, price, and promotion) has traditionally been handled in separate silos in many firms. Companies must be structured in such a way that cross-functional teams may work very close to the consumer to optimise campaign messages and targeting, as well as product, pricing, and distribution. All information, expertise, and decision rights should be accessible across all relevant areas.

Change to a dynamic pay-as-you-go budgeting system. Budgets are affected by the requirement for enhanced speed and agility. Budgets are currently divided into above-the-line (ATL) mass-media marketing, below-the-line (BTL) activities, and personnel, agency, and ad creative expenditures on an annual or quarterly basis, which is excessively inflexible. The trade-offs between these investments need to be made clearer. Dynamic budgeting, or “earn your way” budgeting, allows for maximum flexibility and responsiveness to new opportunities.

To transform your marketing, collaborate with your agency ecosystem. In designing campaign concepts, providing content, and managing media placement, creative and media firms play a critical role. Faster iterations, more and various concepts and media placements, greater data knowledge, and more are all part of the new marketing paradigm. Agencies’ procedures will change as marketing evolves. Marketers will have to change their agency model, including new key performance metrics, incentives, and performance transparency.

Cross-category and brand collaboration is a must. Only by broadening marketers’ reach can companies with numerous brands or product categories targeting the same consumer realize the full benefits of loyalty and cross-selling.

Companies must optimize consumer value across the portfolio rather than focusing on the value of a single transaction per brand or category.

ARE YOU READY FOR THIS?

Most businesses are already making some of the necessary adjustments, but just a handful have undertaken the large-scale transformation required to fully benefit from digital marketing.

The typical organization will appear considerably different from one that genuinely embraces the possibilities of digital consumer interactions and achieves all of the standards. With so many moving pieces, businesses must be honest about their readiness.

Take this quiz to find out where your company ranks:

• Do you treat your ATL and BTL marketing budgets as if they were one?
• Are non-client-related media costs, such as agency and human resource budgets, considered investments? Or is it merely a cost?
• Do you know what your core customers’ net lifetime value is? Do you plan for recruiting and retention based on this information? Do you have any idea how much you can spend on a customer and still make a profit?
• Have your creative and media agencies’ working methods, key performance indicators, and skill sets significantly altered in the last three years?
• Have you gone beyond mood boards, brainstorming meetings, and proxies in your brand and category marketing to include real-world data and A/B testing?
• Do you think it’s a failure of execution if your marketing strategy today is exactly as you planned?
• Do your marketing teams have data analytics capabilities from the beginning to the end of a campaign?

If you can’t respond yes to the majority of these questions, you have some work to do.

When a company is moving too slowly or is stuck in neutral, launching short pilots to allow marketing teams and senior leadership understand firsthand what’s going on can be incredibly helpful. These pilots show how digital marketing flips traditional marketing on its head and how much adjustment is required to realize its full potential. With this information, leadership teams may create a transformational roadmap that is tailored to their company’s specific starting place, business needs, and operating model. Companies will reap the benefits of modernizing marketing now.