Freddie Laker, director of digital strategy, Sapient Interactive, explains why despite the pressure to do more with less, the current economic climate is radically changing the marketing landscape for the better.
The changing marketing landscape
Unless you’ve been living under a rock for the past 18 months it’s been impossible to ignore the continuous steam of negative headlines about the impact the recession is having on marketing spend across the globe. Despite recent research from the IPA revealing that the rate of decline in marketing spend has eased for the second quarter in a row, most marketers remain cautious. According to the 2009 Global CMO Recession Survey, 71 percent of marketing budgets have been reduced this year with over 51 percent reporting reductions higher than 20 percent. Clearly, we’re still some way off the good times of days gone by. Moreover, many claim marketing budgets will never be as high as they once were. This may be true – especially when it comes to traditional above-the-line advertising.
Despite this, it’s not all doom and gloom. In fact, in my opinion the economic downturn might be the best thing that’s happened to our industry in decades. Why? Well, firstly it’s forcing us to innovate. Instead of going down the traditional advertising route we’re beginning to seriously think about what we’re trying to achieve, who we’re trying to influence and how we’re going to best reach them. In many cases, this has involved embracing the online world and experimenting with social networking tools to engage with consumers on a one-to-one basis.
Secondly, it’s making us think more strategically about the work we do. In many cases, marketers are realising that while marketing budgets are low it doesn’t mean communication with consumers needs to be neglected. Instead, it means deploying resources where they are needed most and adopting even more specific and measurable objectives to achieve key aims. Finally, the changing economic climate is bringing with it a need for a level of sophistication and maturity that has been desperately missing from digital advertising to date. As a direct result of the recession, digital marketing is growing up from being a bolt-on ‘nice to do’ activity to an essential component of the marketing mix. What’s more, given the extent to which digital efforts can be measured and analysed it also provides marketers with the opportunity to clearly demonstrate ROI to senior executives.
These changes are happening at a fast pace but those willing to roll with it and rise to the challenges the economic climate presents will be well placed to deliver exceptional work to clients. In my view, there are five key trends re-shaping the face of marketing. They vary in their levels of complexity but in all cases their impact is unquestionable.
Trend 1: Brand as an enabler
Today, we’re moving away from short-sighted highly sales driven marketing campaigns in favour of long-term brand platforms, designed to engage with consumers on an ongoing basis. Examples include Nike+, whose latest effort serves as an enabler of self-discovery and health by establishing an online community of runners. The brand’s Nike+ social media site allows runners from around the world to connect with each other, share experiences and motivate each other. The approach has been widely praised as it has helped the organisation boost sales without pushing sales messages directly to consumers. The brand has done so well because it’s recognised that short-term marketing campaigns are no longer effective as they once were. Individuals expect more from brands and want to develop long and meaningful relationships with them. Nike knows this and is engaging with runners by bringing them together in one place.
Other sectors including retail have followed suit. Supermarket chain Asda recently unveiled its first social networking site, “Your Asda”, designed to allow customers to connect with the supermarket. The site enables shoppers to openly tell the retailer what they like and don’t like and comment about products they want in their local stores. The site features a blog, step-by-step guides to products, a live Twitter feed and a photo gallery. Behind all of these features lies the aim of establishing a community of new and existing Asda shoppers that can openly discuss issues they have. What’s important about this and the Nike initiative is they are giving something while asking for little or nothing in return. Ultimately, this helps to establish brand value, loyalty, engagement and top of mind behaviour amongst consumers for far less money than repetitive traditional advertising campaigns.
Trend 2: Distributed content
For the modern consumer, operating in a highly connected online world, the centre point of information is everywhere. Put simply, consumers want to access brand content from the places they want to get it from. As a result increasing amounts of digital content is being syndicated, re-skinned and re-formatted while still remaining relevant. This evolution is pushing advertisers away from building million pound microsites towards 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.
Many marketers are coming around to this new way of approaching content and understand it’s possible for consumers to enjoy entire rich experiences without ever visiting a primary brand site. Take Pringles for example. The crisp brand has a fan page on Facebook with over 2.7 million fans. The group is popular because Pringles continually updates the site with humorous videos featuring the brand. These videos are low budget but go down well with the brand’s target market and can easily be shared so the content reaches a much wider audience. The Red Bull fan page is also a great example of reaching audiences that might not necessarily visit the brand’s homepage. The fan page also creates a sense of community by incorporating Twitter feeds from sponsored athletes.
Trend 3: Customer service as marketing
A great product or service backed up by excellent customer support or service remains critical to building sales but in today’s age of the ‘promiscuous shopper’, customer service has become even more important. Customer service in the online world means engaging with individuals in online communities and networks. Big business is taking notice with brands such as Dell changing consumer sentiment around their brand 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.
In the UK, O2 actively engages with customers by employing customer service representatives to respond to any disgruntled comments made by customers online. For example, if a customer posts on Twitter about a bad customer service experience with O2, they are soon contacted by an agent who will try to find out more and solve their problem. Tackling issues head-on like this demonstrates to consumers a brand is listening and helps in the important activity of relationship building.
Trend 4: Next generation listening and targeting
As the way people spend their time becomes increasingly fragmented marketers face greater challenges in understanding and targeting consumers. Thankfully, many technology firms now offer variants of social media monitoring tools that not only measure references to key search terms, but also the sentiment of the messaging around them. These tools not only provide insight into customer behaviour that extends miles beyond surveys and focus groups but help to inform media strategies that include both media buying and influencer marketing.
We can expect to see an increasing number of marketers deploying these tools in coming months as the marketing industry shifts away from basic web and campaign analytics. Today, marketing firms need tools to monitor the entire customer life cycle and track the correlation between traditional, digital and commerce channels and customer conversion. According to a recent report from Datamonitor, brands that fail to adopt this level of analysis could find themselves obsolete. It’s no wonder then that many are appointing social media specialists to better reach out to and understand consumers. Ford’s first head of social media, Scott Monty, for instance, is using his Twitter followers to gain insight from experts, fans and critics. This feedback is directly used to inform product developments and customer care strategies.
Trend 5: Meaningful metrics
As part of its ongoing path to full maturity, digital marketing is finally adopting metrics that can be equated back to real business value. For marketers this means moving beyond digital campaign measurement standards such as traffic and mapping key performance indicators to assess different levels of engagement – awareness, consideration, purchase intent, purchase and loyalty.
Fortunately, developments in social media offer marketers both quantitative and qualitative means to measure campaign effectiveness. Quantitative metrics include aspects such as how many friends or fans a brand has on Facebook, the number of comments made on a blog or the number of Tweets you get on Twitter. If these figures are compared to competitors, it can give you an indication of the extent to which your efforts are engaging your target audience. In terms of qualitative measures, it’s possible to analyse and measure online buzz about your brand and assess whether what you’re saying about your brand is reflected in the ways others see it. All of this insight can be measured against business objectives to show how marketing efforts are, ultimately, impacting on the bottom line.
A new approach to marketing
The economic climate may be having a significant impact on marketing budgets but this doesn’t mean marketers need to struggle to engage with consumers. Instead, the recession should be seen as an opportunity forcing brands to question what they’ve done in the past and explore new ways to target consumers. These new ways may include digital marketing tactics – tactics that are now seen as fundamental to a brand’s marketing strategy.
In today’s climate, marketers need to understand that boosting sales is not about pushing messages to consumers and closing the sale quickly but building long-lasting and meaningful relationships. This is crucial since consumers are more demanding than ever and expect brands to engage with them in the way they want to be engaged with. In addition to building open and honest relationships, it also means being bold and letting go. The days in which a consumer would first access a brand’s website when searching for information are long gone. Today, the homepage for brands is Google and that means consumers are increasingly engaging with brands away from the domain of the corporate site. Brands need to anticipate where these consumers are going by providing them with content in the places they spend their time online.
In addition to this, marketers need to think about the importance of customer service. Today, customer service should not be a separate function but fully integrated into marketing strategy. This is especially important, given the speed at which negative comments can spread in the online world via sites such as Twitter. Key to improving customer service is to listen to what people are saying about your brand online. Only then will you have the insight needed to engage with them and improve your offering. Finally, make the most of the metrics social media activity can bring to campaigns. This data will prove highly useful in demonstrating the value of online campaigns at a time when executives are scrutinising budgets more closely than ever.
A catalyst for positive change
Marketers today have a tough job. Audiences are more fragmented, less likely to respond to messages pushed towards them, while budgets are being squeezed. Despite these challenges, the economic downturn is an opportunity to refresh traditional approaches to marketing and embrace new forms of communication. Mass marketing efforts are expensive and ineffective. What is effective are marketing efforts that strive to build relationships with consumers, connect on a one-to-one basis and engage with consumers on their terms. Those that embrace these changes will be well placed to deliver real business value in the year ahead.
Author: Freddie Laker, Director of Digital Strategy, Sapient Interactive