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Digital Marketing: Don’t Miss the Forest for the Trees Digital marketing is less about planting discrete digital touch points (the trees) than it is about transforming marketing as a whole (the forest). Digital Marketing: Don’t Miss the Forest for the Trees 1 Adults in the United States spend an average of 14 hours a week online. In Japan, people log on for 18 hours each week, and in China’s metropolitan areas, people spend a whopping 20 hours a week online. Add in the time we spend on the mobile Internet with devices such as smartphones, and those numbers are even higher. The amount of time we spend online is enormous, equal to or more than the time chalked up to watching television or reading newspapers (see figure 1). Digital marketing is still in its infancy— the trial-and-error stage—but consumers are way ahead, expecting real and relevant interactions. A closer look reveals a more significant shift. While watching television, up to 60 percent of us are multitasking—using computers, tablets, or smartphones to browse the Web, check email, or visit social networking sites such as Twitter or Facebook. The digital devices that support that shift generate a new dependency. In fact, a recent study in the United Kingdom reveals that 66 percent of people have become psychologically dependent on their mobile devices, giving rise to disorders such as nomophobia—the fear of being separated from your mobile device (short for no-mobile phobia). Clearly, our need to feel connected is powerful. While television's total advertising market share is still healthy with a 3 percent increase between 2006 and 2010, the attention we pay to traditional channels such as television, and especially to traditional advertising on television, has shrunk dramatically. To keep up with these trends, companies are reaching out to consumers on more modern channels. We call this digital marketing, and it is no longer an option but a necessity (see sidebar: Defining Digital Marketing on page 3). Figure 1 How much time do people spend online compared with other media? Hours per week 4 India Mexico 2 Europe 2 Brazil 4 Canada 3 South Korea 3 United States Japan China 12 3 8 7 12 1 2 2 15 3 5 13 14 6 13 Using the Internet 1 Using mobile Internet 1 1 14 3 3 9 Playing video games 15 4 3 1 12 2 6 Listening to the radio 9 2 7 Watching TV 1 9 12 3 Reading newspapers 1 6 7 13 2 3 2 2 18 7 20 1 Notes: Figures are for adults 18 and older. Findings for Latin America, India, and China are based on metropolitan areas. Source: Technographics Benchmark Surveys, 2011 Digital Marketing: Don’t Miss the Forest for the Trees 2 What does this mean for marketing? We see two dominant elements: • Touch points are crucial. To interact with consumers requires a 360-degree perspective on touch points, which encompass all of a customer’s interactions with a company, including ads, websites, salespeople, and stores. Through each touch point, customers form perceptions about the company and the brand. Digital touch points transform all other media. Online and offline are not one-or-the-other propositions—customers are online almost all the time through smartphones, tablets, connected TV, and online radio. • Consumer engagement is essential. Consumer engagement encompasses customer interactions with a brand over time that create a long-term connection. A successful marketing strategy does more than raise brand awareness—it interacts and connects emotionally to create a bond, leave a lasting impact, and build an enduring relationship. But consumers are no longer static targets to be inundated with marketing messages. Digital marketing meets them where they are, transforming the way we think about communicating with brands. It creates new expectations about relevancy, transparency, honesty, commitment, trust, and relationships. Successful brands behave as real people do. The paradox is that while digital marketing is still in its infancy—at somewhat of a trial-and-error stage—consumers are way ahead, expecting real and relevant interactions. While much is being written about aspects of digital marketing such as location-based social networking apps like Foursquare and Gowalla, not much is being said about a marketing transformation. Marketing is no longer simply about how we market a brand. It is about how we inspire, serve, and live with the citizen-consumer as a brand-person. Transforming the marketing forest to blend in with today’s digital world is a challenging but necessary undertaking for companies that want immediate impact and long-term growth. Storytelling and the Brand Experience From age-old oral traditions to today’s digital formats, people have always liked stories. And storytelling is an essential component of brand marketing. For the past 40 years, stories in the form of advertising have been conveyed through one primary touch point: television. This was good but not great: The medium is short by nature and limited because it is rigid and lacks touch and feel capabilities. Television also assumes that the same story appeals to everyone (see sidebar: We Are Social Animals on page 4). Defining Digital Marketing The standard definition of digital marketing is digital activities in the marketing space. This is different from e-commerce, which covers all business conducted electronically. Digital marketing encompasses the following areas: •Developing content for digital touch points, such as minivideos, games, brand-created content, and consumercreated content •Building campaign websites and updating brand websites •Driving traffic to digital touch points, including planning and buying digital media •Fostering engagement and interactions in social networks (managing communities) However, defining digital marketing through digital activities is too narrow. A better definition is marketing in the digital age. This is significantly different, from both a scope and an integration standpoint. There are many facets of marketing in the digital age, but at the core of each is one goal: capturing the attention of the consumer. Digital Marketing: Don’t Miss the Forest for the Trees 3 Today, we can tell stories in much richer ways. A TV spot can be partnered with a YouTube video to create excitement and announce something bigger. Subsequent episodes of the story can then take place at other online locations or at a point of sale (POS) where the brand experience will be deeper. Consider, for example, the 2011 Dodge scavenger hunt. Dodge Journey television ads sent viewers to YouTube to find clues first for hidden cars and then for real cars. Dodge then posted YouTube videos of the car winners. DreamWorks Animation used multiple channels to promote the movie MegaMind, including TV ads and the online game MegaFarm with Zynga’s FarmVille. The communication cycle between brand and consumer has three phases: pre-reveal, reveal, and post-reveal. Each phase has a purpose with appropriate touch points and content. Storytelling, brand experience, and consumer engagement must be designed up front, with a 360-degree view, ensuring each touch point has a purpose with appropriate content and timing. In particular, articulating a pre-reveal phase in a launch cycle requires significant anticipation and alignment between the marketing organization and agencies, and often retailers, too. This is fundamentally different from what usually happens: a huge investment at the reveal stage, but little happening before and after. This cycle affects how we think about each touch point and its return on investment (ROI). A TV spot today has very different features than a traditional television ad. It is not meant to inform, educate, or create brand preference, and it is no longer the key to the communication strategy. It is just one component among many. The consumer engagement strategy becomes the cornerstone. We Are Social Animals The digital world is transforming how we do the things that we have been doing throughout history. Mass media has existed for less than a century. Radio, movies, and television were all created in the 20th century. But social networks—places where people meet, interact, and share information—have existed for thousands of years in the forms of families, tribes, friends, neighborhoods, and marketplaces. The time that the average adult spends online should not be a surprise. It reflects basic human behavior, for which socializing is key. It is more natural for us to interact with other people than to watch television for hours. The domination of mass media can be seen as a short parenthesis in human history, following centuries of social networking in small physical groups and preceding future centuries of social networking with new digital tools. The same applies to games: The best sellers have always been social games. This has been true with Hasbro’s Monopoly game since the mid-1930s, and it applies today to Zynga, a leading provider of digital social games such as FarmVille. People today are increasingly meeting, interacting, and sharing in a digital version of social networks. In fact, the division between offline and online is artificial and shortsighted. Most consumers are no longer simply online or off; they are increasingly connected 24/7 via mobile devices. is what did not exist before us. For our grandparents, television was technology. For most of us, the Internet is technology. For our children, the Internet is no longer technology. A closer look reveals insightful patterns. The digital world allows people to interact in new ways, but it does not fundamentally change our human socializing patterns with friends, relatives, and our other networks. Over the past 15 years, cynics have said that new generations are more individualistic and care less about society. We disagree. New generations do care; they just express it in different ways. Further, technology is a relative term: Defined as the application of scientific knowledge for practical purposes, technology Digital Marketing: Don’t Miss the Forest for the Trees 4 A good example of this is Volkswagen’s 2012 Super Bowl ad, “The Dog Strikes Back.” The TV spot features an overweight dog that longs to chase cars and becomes inspired to get into shape by a passing Volkswagen Beetle. The ad does not focus on the car’s features but on telling a story. In fact, it is somewhat of a sequel to the company’s 2011 Super Bowl ad “The Force,” which featured a boy dressed as Darth Vader. The surprise ending in the 2012 ad is that it jumps from the slimmed-down, car-chasing dog to an alien sports bar where a group of Star Wars characters, including Darth Vader, are watching the commercial. Volkswagen’s campaign also included videos on ESPN Mobile and YouTube. A multifaceted consumer engagement strategy engages viewers and piques their curiosity, nudging them toward other touch points. For example, YouTube and Facebook are global, and unlike television, they incorporate social elements by asking viewers to like, share, or create their own videos. On the ROI side, evaluating the real impact of a TV trailer will require actual engagement online and at the point of sale. Linking TV media spend with gross rating points (GRPs) and sales uplift will no longer be relevant. Success will require linking all investments—TV, online, and others— to consumer engagement and then linking consumer engagement with sales and loyalty. Advertising agility and speed are also increasingly becoming key differentiators. And this is not about squeezing months into weeks; it is about squeezing days into hours—real time. When singer Beyoncé announced her pregnancy during MTV’s 2011 Video Music Awards, brands that have something to say about pregnancy needed to react in real time, not days later. This type of marketing has deep implications for situations in which the entrepreneurial spirit may exist on paper but doesn’t translate in real time. From an organizational standpoint, most companies are not ready for this. We have silos where traditional marketing deals with traditional media and then adds a vertical digital function. Creating a Sense of Purpose Increasingly, brands must provide a compelling sense of purpose—to instill the notion in customers that they can do something to change their lives and improve society. Developing a brand with a sense of purpose requires three components: a powerful idea (ideal), a persuasive moving story, and empowered customers. Let’s look at how these components work together. First, a powerful idea is more a big ideal than the classic big idea in advertising. For example, Axe, the personal care brand from Unilever, is marketed not just as a deodorant but as the ideal that gives men an edge in the mating game. Axe is portrayed as more powerful and appealing than other brands because those who use it are cool and fashionable. The story is persuasive because an Axe user is depicted as being able to seduce anyone. And the customer empowerment component is humor: Axe ads trigger a positive reaction from viewers, who not only quietly chuckle at the story when alone, but also laugh about it together. An engaged customer is in a relationship with the brand. Some believe the sense of purpose is equivalent to corporate social responsibility (CSR). We believe that although the two are linked, they are different concepts. A CSR initiative often includes a sense of purpose, but it does not necessarily provide a clear purpose. Only a handful of companies are able to deliver both. Procter & Gamble, for example, has spent years developing a compelling sense of purpose in its brand of baby products “caring for the happy and healthy Digital Marketing: Don’t Miss the Forest for the Trees 5 development of all babies around the world.” Its Pampers diaper brand is also involved in CSR initiatives, which include teaming up with the United Nations Children’s Fund (UNICEF) to vaccinate women and children around the world against maternal and neonatal tetanus. P&G has created a meaningful link between a brand purpose and corporate social responsibility. Understanding People (Not Just Their Needs) Until a few years ago, marketers relied on market research teams to assess the potential and dynamics of their markets by category. Market research was renamed “consumer and shopper insight” with the intent of digging deeper to reveal buyers’ needs and behaviors. This was a big improvement in product development and retail category management. But it wasn’t enough. The same reasons for brands to have a sense of purpose require that we go deeper into consumers’ minds to connect and engage. Like an iceberg, the real connection takes place well below the surface. What are customers’ desires, aspirations, underlying beliefs, and sense of purpose as individuals? The same is true for brands and products. The trick is moving beyond developing functional products to portray a product’s underlying emotional attributes, and then going even deeper to develop its personality and compelling sense of purpose. Brands must provide a compelling sense of purpose—to instill the notion in customers that they can do something to change their lives and improve society. Imagine a couple having dinner on Valentine’s Day. The wife says, “Honey, I appreciate the diamond earrings, but I feel like you don’t know me anymore. You talk to me as if I’m one of your clients.” And he says, “I know you inside and out, sweetie. You are 42. You’re married with two children, one dog, and two cats. You own a home and like to garden, go to yoga class, and shop at the mall at least once a week.” Most marketers hardly know more than this about their target customers. One could argue it’s already a wealth of information—but it’s not enough to truly engage. It’s not about knowing something personal and confidential about Mr. and Mrs. Smith; it’s about knowing why people need what they need and behave as they behave. Determining why people do what they do is not easy because we humans are not always honest. For example, someone’s Facebook profile might say he loves exercise and always eats healthy food. But in his photos, he’s eating cake and ice cream. What is more insightful: stated interest or actual behavior? Both may be relevant. He loves sugary foods and wants to stay fit, and he can do both if he exercises to work off the extra calories. Well-targeted advertising for this consumer will address not only food, but also a healthy life style. Understanding shared passions has always been important in order for people to make connections with one another. The same applies to the relationship between people and their brands, and digital marketing enables new ways for people and brands to interact. Social Networks and Community Management A communication cycle with pre-reveal, reveal, and post-reveal stages is better and more powerful than just a reveal stage; and it might fit the need to support new brand or product launches. But it does not address the opportunities to nurture a consumer relationship with Digital Marketing: Don’t Miss the Forest for the Trees 6 a brand. Launch cycles alone are good for category or brand discovery; they can create a relationship with the brand. But they often fail to generate commitment and strong bonds, not to mention advocacy. These are the true drivers of customer value over time. So how do you create strong bonds between consumers and brands? Strong human bonds exist only between individuals and members of small groups who share the same passion. A brand that creates strong bonds will be a relevant part of these inner circles—acting discreetly, sincerely, and preemptively. The notion that anyone can deeply influence millions of people for a long period of time is false. When it works, it rarely lasts more than a few years, and only then because the team revolves around the presence of a charismatic leader. When the leader leaves or loses credibility, the light goes out, and there is no more team. The same applies with massive influencers, such as pop stars, actors, or top models who are leveraged through public relations and advertising to influence customers. What impact do they have? Do they create a true bond with the brand, foster their own community, or fuel a solar team where they and the brand have a link with customers but there is no glue to create a real community? There is no easy answer. Certainly, group bonds are strong when all members are linked and have something to share. For example, BMW drivers share something about the pleasure they find in driving. A community is by definition a group of people with something to share, not just something to look at. Community management is the art and science of fostering quality relationships within a community. Sociological research tells us there are four stages in community management (see figure 2): Figure 2 Community management is often the weak point in digital marketing Weak Strong Components of digital marketing Hierarchy Emergent community Community Network Strategy Familiarize and listen Participate Build Integrated Leadership Command and control Consensus Collaborative Distributed Culture Reactive Contributive Emergent Activist Community management None Informal Defined roles and processes Integrated roles and processes Content and programming Formal and structured Some usergenerated content Community-created content Integrated, formal, and user generated Policies and governance No guidelines Restrictive Flexible Inclusive Tools Consumer tools used by individuals Consumer and self-service tools Mix of consumer and enterprise tools Social functionality is integrated throughout Measurement Anecdotal Activity tracking Activities and content Behaviors and outcomes Source: The Community Roundtable, 2011 Digital Marketing: Don’t Miss the Forest for the Trees 7 Hierarchy. Familiarize-and-listen strategy; command-and-control leadership; reactive culture; a lack of community management; formal and structured content programming, reactive culture, consumer tools used by individuals, and no community management Emergent community. Consensus-based leadership, some user-generated content, consumer and self-service tools, and informal community management Community. Collaboration, community-created content, consumer and enterprise tools, organized community management Network. Distributed leadership, integrated formal and user-generated content, often activist in nature, and high emotional attachment among members The Community Roundtable, a U.S.-based information-services organization, characterizes these four stages along eight dimensions in what they call a community maturity model. In 2011, findings from its study of community management suggest that there is an execution paradox in the market.1 While social marketing generates enthusiasm and cautious optimism (or at least interest) among most executives, not everyone is open to sharing information, and a significant number of executives are not comfortable using unofficial, user-generated content (see figure 3). Here’s a quiz: What percentage of content about the Coca-Cola brand is generated by users? Answer: More than 80 percent. For many brands, that number is below 20 percent. Good or bad is not the point; it is hard to compare across categories. However, this is an indication of the kind of consumer engagement and community excitement Coca-Cola has created. Figure 3 Many executives remain uncomfortable with user-generated content and social marketing % of executives Leadership Culture Content and programming How does your organization feel about social marketing approaches? What is your organization’s view on information sharing? How comfortable is your organization with using unofficial, user-generated content? Not comfortable 25% Only if we lack the bandwidth to do it 13% Somewhat comfortable 48% Very comfortable 13% Resistant 3% Paranoid Skeptical 7% Controlling 4% 15% Neutral 10% Resistant Interested 19% Opportunistically collaborative 19% Cautiously optimistic 28% Team-based 25% Enthusiastic 31% Commitee- or consensus-driven Open 9% 6% 21% Source: The Community Roundtable, 2011 The Community Roundtable. The 2011 State of Community Management: Best Practices from Community, Social Media, & Social Business Practitioners 1 Digital Marketing: Don’t Miss the Forest for the Trees 8 Community management is likely to remain the toughest challenge for marketers because it combines challenges to develop new skills, new cycles (beyond launches), new contentcreation models, new measurements of outcomes, and new risk and reward approaches. The Transformation Path Players that flourish in this marketing transformation will be the fast movers that completely alter their marketing concepts. Although there is no one right way to succeed, it is important to recognize and develop certain capabilities throughout the transformation in order to come out on top. Based on our experience with various clients, we see three stages in a marketing transformation (see figure 4). Brands must provide a compelling sense of purpose—to instill the notion in customers that they can do something to change their lives and improve society. • Open but skeptical. A senior manager might be open to a digital marketing strategy but still not directly influenced by his or her environment. The usual reaction is to invest but ask for the ROI of every digital initiative. This hardly moves the needle because there are few ways to measure ROI. In stage one, we encourage executives to embrace change and increase their personal exposure to digital media and marketing. The tactics range from promoting Figure 4 Three stages in a marketing transformation Open but skeptical Passionate but out of practice Digital native Typical profile • Senior manager open to digital marketing but not influenced by digital environment • Senior manager influenced by digital environment • Young, inexperienced marketers • Digital natives or nativelike managers immersed in digital media Roadblocks • Lack digital exposure • Desire to know ROI for every digital initiative • Lack of knowledge • Organizational silos • Lack of momentum in managing communities • Organizational silos Tactics • Engage in all things digital • Provide proof of return on investments • Employ social media experts to train others • Instill customer-centric focus Source: A.T. Kearney analysis Digital Marketing: Don’t Miss the Forest for the Trees 9 digital days at work to introducing a recurring digital agenda in meetings. The idea is to get everyone personally immersed in social networks and digital media. You can’t sell a product through new channels unless you completely understand the channels. • Passionate but out of practice. A senior manager might be influenced by his or her environment or a younger inexperienced marketer. Today, almost everyone has hired a 20-something social media expert to run their Facebook pages and Twitter accounts, among other sites. But are these experts sharing their expertise with the firm, or are they hidden away quietly doing their jobs? Interestingly, social media experts tend to be introverts, interacting almost exclusively online, so the challenge is using them to train others on all things social media. • Digital native. At this stage, there is usually a fluid mix of digital natives and aspiring digital natives—managers who are immersed in all aspects of social media and have been for a few years. They have a high degree of autonomy, but there are still some gaps, mostly around managing the entire social media community. So the transformation continues with investments in streamlining the organization, instilling a consumer-centric versus category-centric focus, and funneling resources to manage the social community. Organizing digital marketing activities is only one part of the challenge, but it is an important one. We see the following digital marketing job evolution (see figure 5): One job. Digital marketing activities are performed by one person, usually when every market has some level of digital skills: • Internet manager. Responsible for major tasks related to digital media buying and digital content development. Social media is usually outsourced and poorly supervised. Little energy or talent is put into social networks and community management. Figure 5 Digital marketing job evolution, positions, and responsibilities One job Internet manager • Traffic • Media buying • Content • Social media (usually outsourced) Two jobs Three Three jobs jobs E-marketing manager • Traffic • Social media Content developer • Content development by brand or category Community manager • Public relations Community manager • Public relations by brand or country or Content manager • Traffic • Content delivery Media buyer • Traffic by country or region Media buyer • Traffic • Content delivery Source: A.T. Kearney analysis Digital Marketing: Don’t Miss the Forest for the Trees 10 Two jobs. Digital marketing activities are divided into multiple jobs, usually starting with two for a given business unit. Responsibilities can be divided in two ways: • E-marketing manager and community manager. Dominant when social aspects and public relations are most important (luxury brands, for example) and where innovation is less intense, so there is less pressure on content for launch management • Content manager and media buyer. Dominant in mass-market environments with intense innovation where content delivery, traffic, and media buying are top priorities. Social media remains a lower priority. Three jobs. This is the mature stage in which size and skills drive digital marketing activities in three areas: • Content developer. Responsibilities are organized by brand or by category; offline and online are integrated. • Community manager. Responsibilities are organized by brand or country, offline, and online. Community management, whether in-house or outsourced, requires dedicated supervision. • Media buyer. Responsibilities organized by country or region across brands or business units. It’s not about knowing something personal and confidential about Mr. and Mrs. Smith; it’s knowing why people think and behave as they do. The Change Journey To connect with customers in the digital age, the technology trees must not hide the marketing forest, where deep and broad transformation challenges reside. Companies that set their sights on the three most important milestones in the change journey—deeper consumer insight, a strong sense of purpose centering on improving lives, and integrated and inclusive use of social networks—and that do so with the full attention and personal involvement of a forward-thinking CEO, will have the best chance for a successful transformation with immediate gains and sustained growth. Authors Eric Gervet, partner, Paris [email protected] Matthieu de Chanville, principal, Paris [email protected] Digital Marketing: Don’t Miss the Forest for the Trees 11 A.T. Kearney is a global team of forward-thinking, collaborative partners that delivers immediate, meaningful results and long-term transformative advantage to clients. Since 1926, we have been trusted advisors on CEO-agenda issues to the world’s leading organizations across all major industries and sectors. A.T. Kearney’s offices are located in major business centers in 39 countries. Americas Atlanta Calgary Chicago Dallas Detroit Houston Mexico City New York San Francisco São Paulo Toronto Washington, D.C. 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