A Few Good Things to Come Out of the Recession
Five Accelerating Trends That Will Reshape Marketing
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| Freddie Laker | |
The doom has advertisers hanging signs along the lines of "Will Work For Food" on their agency walls, and marketers continue to face facts and figures like these, from Forrester's 2009 Global CMO Recession Survey: 71% of marketing budgets have been reduced this year, and more than half reported reductions greater than 20%.
Now here comes the curveball: I think this might be the best thing that has happened to our industry in decades. Yes, I said that. While I have empathy for those that have lost jobs and the extra pressure many of us are facing, it's also forced us to innovate, reinvent ourselves, think more strategically, and, most importantly, bring a level of sophistication and maturity that, in my opinion, has been desperately missing from digital advertising throughout most of the industry.
There are five trends I believe are reshaping the face of marketing.
Brand as an enabler
We're moving away from short-sighted, highly sales-driven marketing campaigns in favor of long-term brand platforms that use evergreen content to add value to your day. Examples include Nike+, whose latest effort serves as an enabler of self-discovery and health and delivers a sense of community within the running world. Bank of America's Small Business Online Community is also a great example in that it helps business owners to share knowledge. A final example is Kraft's iFood Assistant iPhone app, which adds convenience to recipe planning.
All these initiatives gave something while asking for little or nothing in return. But they'll ultimately help foster a relationship with the consumer that builds brand value, loyalty and engagement for less money than the cost of repetitive ad campaigns.
Distributed content
This trend moves us more in line to the modern digital ecosystem. It's fragmented and complex, with consumers interacting through many devices and sites. Modern digital marketers have recognized that in terms of the consumer, the center is everywhere. As a result, digital content is now designed to be syndicated, reskinned and reformatted while still remaining relevant. This evolution is pushing advertisers away from building million-dollar microsites and toward smart, tactical ideas that revolve around specific needs or even communities. Now consumers can access similar content across primary websites, partner sites, widgets, applications, social presences, blogs and mobile devices. They can even enjoy entire rich experiences without ever visiting a primary brand site.
Customer service as marketing
While a great product or service backed up with great customer support or service remains your biggest asset in achieving success, never before has the vehicle of customer service become one your best methods for connecting with consumers in a social-media-driven web. Big business is taking notice, with brands like Comcast and Dell changing consumer sentiment around their brands and engaging them in the communities in which they reside. Better yet, they are doing so in a way that feels natural and adds value to the conversation, all while driving additional sales, boosting loyalty, and lowering operational and marketing costs.
Next-generation listening and targeting
As the way people spend their time becomes increasingly fragmented and marketers continue to face growing pressures to demonstrate the value of our services, the tools we are using to do so have undergone a significant evolution. More than 100 technology firms are offering variants of social-media-monitoring tools that measure not only references to key search terms but also the sentiment of the messaging around them. In doing so, these tools not only provide insight into customer behavior that extends miles beyond surveys and focus groups, they help to inform media strategies that include both media buying and influencer marketing.
As an industry we have moved beyond basic web and campaign analytics. Marketing firms are now able to monitor the entire customer life cycle with significantly more accuracy and then track the correlation between traditional, digital and commerce channels and customer conversion.
Meaningful metrics
Deep analytics and tracking are enabling meaningful insight. As a result, in its ongoing path to full maturity, digital marketing is finally adopting meaningful metrics that we can equate back to real business value. Now marketers are moving beyond digital-campaign measurement standards such as traffic and are instead mapping key performance indicators back to metrics and ultimately the conversation funnel, which includes the different levels of engagement -- awareness, consideration, purchase intent, purchase and loyalty.
A massive recession is never a good thing, but it's safe to say that someday, when the marketing sun is in full shine, we will find that some good came from it.
| ABOUT THE AUTHOR | |
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Freddie Laker is director of digital strategy at Sapient. He has also founded the Society of Digital Agencies, a collective of notable digital agencies focused on thought leadership and positive industry change, and blogs at takemetoyourleader.com. |
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During tough times, everything matters. Only the activities that pay for themselves are continued. Developing excellent customer service processes are the best way to maintain your business during a slow down and to grow during a recovery. It is always cheaper to keep an existing customer than to try to gain a new one but most companies focus only on acquiring new ones.
Spend some time looking at your business and see where you can improve. 1% a day can make a huge difference.
Scott Lovingood
Want to improve your productivity?
http://www.AskTheWealthSquad.com/freeoffer
Really? who?
That's a starkly different picture from the far larger slice of the pie: the small and medium sized B2C and B2B companies that have significantly more limited funds, and whose marketing budgets feed the massive number of smaller agencies that don't (and likely never will) have the chance to work with the Nikes of the world. These companies are not looking for branding opportunities, but are instead concentrated on shorter-term, direct campaigns that result in the more immediate spikes in revenue that they need simply to survive the recession. For these companies, branding campaigns and improved customer service efforts are not the priority. Their shift to social media comes from a combination of buying into the hype around it (warrented hype, but hype none-the-less), and a means of reducing marketing costs. For these companies - the companies that smaller agencies rely on - the only metric that really matters is short term sales.
Jason Miletsky
CEO, PFS Marketwyse
Author, 'Perspectives on Marketing' and 'Perspectives on Branding'
http://www.pfsmarketwyse.com
http://twitter.com/jaymiletsky
Stephen Byrne
www.diffusion.com.au
twitter @spbyrne
Especially in social media, where every communication needs to be transparent, and with an eye to building brand awareness, keeping close to the metrics.
The key is "VALUE" combined with "MARKETING", and shifting away from being short-sighted to really understanding your "AUDIENCE." Well-done - thanks!
Vickie
http://twitter.com/vickie_smith
http://www.VickieSmith.com
I like your post and agree that these trends are reshaping marketing. I think, however, that the growing prominence of the social web & voice of the customer are the key drivers (and the recession is an enabling contributor). Your brand is now the sum of conversations. We need to move beyond the days of defining our brands (or brand messages) in a back office and then executing a one-way push of that message.
Certainly, the recession is causing companies to look more closely at the return on their investments and to look for metrics which tie directly to business objectives. The cool thing is that the social web is a highly measurable medium and, yes, it is possible to tie your efforts to outcomes such as sales.
Re: my fellow commentators, I disagree with the point that this is only for the large brands. Yes, brands like Dell and Comcast (both customers of ours) are clearly leading the way in showing how brands should listen & engage with their customers, but this is just as affordable for small & mid sized companies.
Great article.
Cheers,
Marcel @lebrun
CEO, Radian6
http://www.radian6.com
I couldn't agree with you more. I am finally given the time from major agencies in the downturn, where previously, we were brushed over. We communicate education based sponsorship to new moms directly through electronic media handed to the mom, from the healthcare provider. We are highly innovative, targeted and create value for the brand as well as user. This downturn has been a blessing for small companies such as THe Baby CD.
Timothy Kelley
CEO
www.TheBabyCD.com
Where I disagree is the purposes for which its being used among that population. Sure, many smaller companies may publicly say that improved customer service is a goal, and that they are interested in building their brand, but the reality is that small and mid-sized companies that are really feeling a financial squeeze during this recession probably have just enough marketing dollars to take a single stab at reaching their audience. If they don't get it right once, they're screwed - there are no second chances. So their goals are different than the goals that Dell, Comcast and others are reaching for. They're shooting for the low-hanging fruit that will keep their businesses going, and are far less interested in long-term brand building and market research than they are in short-term revenue generation.
As a brand guy myself, I find this to be a frustrating reality, but as many smaller agencies will attest, cash-strapped companies will zone out as soon as the conversation starts to focus on brand building strategies that won't result in in immediate return.
Jason Miletsky
CEO, PFS Marketwyse
Author, 'Perspectives on Marketing' and 'Perspectives on Branding'
http://www.pfsmarketwyse.com
http://twitter.com/jaymiletsky
John Dietz
Founder
Adometry, Inc
www.adometry.com
I tell my clients, businesses like people become overweight and often obese. When times are good they lose track of what they consume and they grow very large, and not healthy. And like humans who are forced to go on a diet by their physician, businesses are forced based on their markets changing to get healthy.
The key is they understand the right formula for weight loss that improves their health versus making it worst. I discuss this in my blog: Are You "Spinning" the Wrong Marketing and Sales Formula and getting nowhere fast? http://nosmokeandmirrors.wordpress.com/2009/07/12/are-you-spinning-the-wrong-marketing-and-sales-formula-and-getting-nowhere-fast/
Just like a healthy diet your team can come out of this current economic downturn stronger.
Some simple steps;
1.Keep track of every dollar you consume , where, why , ROI
2.Watch your activity level in relation to what you consume, if it works keep doing it
3.Make a commitment to a plan and a goal
4.Have the discipline to follow it and not cheat
5.Assess, wash rinse, repeat
6.it will not change overnight, stick with it
Mark Allen Roberts
stephen, seriously?
if we were to believe that reduced costs of sales and lower market entry costs are "more substantial" factors than those unmeaningful "intangibles" that drive choice among competing alternatives, we would all be driving kias and tatas, and wearing $5 no-name t-shirts from discount stores instead of $65 nike and adidas products purchased in highly-branded environments. a company can't have a bottom line without a topline, and those factors you mistakenly characterize as "intangibles" do in fact deliver enormous value -- both top and bottom -- to companies and their brands. my favorite definition of "brand," in fact, is "the variance that people will pay for something that is essentially a commodity." do you really think consumers are paying $.05 - $.10 more for Morton salt vs. store brand because of their lower sales/market entry costs? both products are simply NaCl, but Morton gets more simply for being Morton. I don't know the contribution margin figure attributable to the strength of the brand, but I bet the Morton people do.
I think it gives business people a bad name when they refuse to acknowledge that a multi-billion dollar industry around brands, driven by those who understand those "intangibles," exists because these things do in fact matter more than intra-transactional factors, more than some would like to admit. http://tinyurl.com/mjlevy.
My point was that the fuzzy metrics used by agencies, don't cut it any more, which you obviously don't get. If you read my blog post on social media metrics http://diffusionblog.blogspot.com/2009/08/enter-at-your-own-risk-real-value-of.html, you'll see what I am talking about. Of course, empirical data is not always what's required but an almost total reliance of agencies on highly ambiguous "awareness, consideration, purchase intent, purchase and loyalty" have been trotted out since the 50s and is what is hurting agencies and marketers who can't prove what their work - offline and online - is delivering to the bottom line.
Stephen Byrne
www.diffusion.com.au
@spbyrne
But...giving something while asking for little in return and engaging in communities in ways that feel natural and add value, seem to be better correlated with the shift to social media and consumer's weeding out content that is too contrived.
Either way, there's clearly been a shift in that it's now necessary for the brand to take less and give the consumer more value. To do that requires smarter, more personal initiatives from brands.
Alissa Hennen
Associate Creative Strategist
www.centerline.net
This isn't being done to the satisfaction of corporations who's marketing department live and live by the quarterly result.
Langston Richardson
VP Digital Brand Strategist / Lazbro / www.lazbro.com / twitter: @lazbro
---
www.langstonrichardson.com / twitter: @MATSNL65
Why is no one asking the greater question? When did money become the end, instead of a means to an end?
I wish it were otherwise, but as we continue down the same paths, why should we expect any different result? Just keep consuming, with your head in the sand (or up your wazoo), and keep the conversation light. We're all cowards, afraid to tell the truth. When the truth becomes the value we all embrace, then, perhaps we'll have a chance. But without this "Sea change", in short order we'll return to old habits. Then the other show will drop, and we'll have done it to ourselves.
Why is it that so few marketing leaders have uncovered the truth that the public has an incredibly bad taste in their mouth from all the lying and cheating, and have little loyalty to brands that serve up the same old bs (albeit in shiny new media and technobabble)? Brands that become about a vision, about real values that people appreciate and respond to, they will thrive. The rest will become the dead wood that chokes up the value bins at the dollar store. Good riddance!