When a marketer can put something online today, learn from consumer feedback over the next 48 hours, then modify it and return within 24 hours with a more relevant version, then traditional marketing approaches, benchmarks, processes and timetables are obsolete. It’s time to re-write the textbooks: Marketing has moved into the “express lane.”
Enabled by digital, controlled by empowered consumers and fueled by the need for integration, marketing today is fundamentally different than it was only three years ago. It is “on demand” — available for consumers or shoppers to access at any time and at any place — a continuous flow of information and inspiration. Its currency is relevance — the only place where value lies is where it connects. Its strength is brand identity — one must be provocative enough to attract and engage because today’s consumers spurn brands that bombard them with messages.
Express-lane marketing is not confined to smartphones, tablets and social networks. It has burned through the path-to-purchase like a brushfire. When what used to be the “end” of the path — the retail store — has reduced lead times for jointly planned retailer/brand initiatives from 18 to three months, the impact reverberates through the system like a gong. The traditional, deliberate, process-driven “annual brand plan” is dead on approval. Let’s look at what this means for you as a marketer.
Enabled by Digital
Digital in 2012 is already ubiquitous. It is the driving force behind almost everything that is new and exciting in marketing. Nevertheless, many contend that digital growth is still in its early stages and that this growth shows no signs of leveling off.
According to Advertising Age, digital revenues catapulted from 25.8 percent of total agency revenues in 2010 to 30.3 percent in 2012 — even though digital brings in less revenue in the absolute. Overall, US mobile ad spending is expected to top $2.6B in 2012 and quadruple to $10.8B by 2016 — a 416 percent increase. Ebay estimates that its mobile sales (defined as payments made from a cell phone) leaped from $2B in 2010 to $5B in 2011 — a 250 percent increase, according to e-Marketer.com. US smartphone penetration hit 50 percent of total mobile users in February 2012 — an increase of 38 percent over 2011. In another 18 months, Nielsen forecasts that smartphone usage will overtake PCs.
Since 2010, Unilever’s spending on digital has reportedly doubled to 13 percent of overall marketing outlays. Why? Unilever reports a digital ROI on key brands that ranges between $2.69 and $3.58 in sales for each dollar spent. Similarly, even a mid-size company like Smuckers reports that its digital spending already accounts for 10 percent of its marketing budget.
To put this in perspective, the 13 percent of its marketing budget that Unilever is spending on digital (at least for certain brands) and the 10 percent that Smuckers is spending — if at all representative of the industry as a whole — is already equal to or more than the 12 percent that Kantar Retail reports all consumer packaged-goods marketers spend, on average, on consumer promotion. In fact, it is quickly approaching half of the 23 percent of the budgets that they reportedly spend on traditional advertising.
A quick glance at any trade magazine suggests that best-in-class product-marketing companies are focused on optimizing the digital opportunity. For example, digital has become so important to Procter & Gamble that it is fundamentally changing how it creates ads and applies what it learns to its other businesses.
P&G’s optimization approach for digital is not unlike the continuous improvement processes made famous by Peter Drucker. P&G’s Pantene brand uses continuous data feeds on consumers’ responses to digital ads to tweak media buys and inform creative elements on the fly. Based on real-time feedback and analysis, Pantene has been able to improve performance steadily on click-through rates and purchase intent by 28- to 90-percent versus pre-testing only.
Retailers are fully invested, too. In April, Walmart purchased Twitter app developer Kosmix for $300M and instantly refashioned it as Walmart Labs, now its social and e-commerce research and development unit.
In other words, digital has become the great enabler — for small, as well as large, marketers and retailers. Because the cost of experimenting with digital — as opposed to all of the pre-testing, planning and production costs that go into a 30-second ad — is relatively minor, the latitude it affords for trial and error is significantly greater. As a result, there is no doubt that digital will move everyone into the express lane — it’s no longer a question of whether; it’s now only a matter of how fast.
Controlled by Empowered Consumers
In addition to becoming the great enabler, digital has also become the great leveler. By providing consumers with the tools to make informed decisions based on the feedback of literally hundreds of other consumers who purchased and used the same product, or who experienced the seller’s customer service, digital puts the consumer solidly and irrevocably in control. If there is any doubt, just visit Amazon or Newegg.com and look at the feedback sections. Of course, then there’s Facebook ...
Let’s add some dimension to this. The social networking base now encompasses 82 percent of the world’s online population — 1.2 billion users. Monthly active Facebook users now top 901 million globally. The “over age 35” social networkers — the very segment that many under 35s think is already digitally dead — is the fastest growing demographic segment and will comprise 50 percent of users by next year.
Seventy percent of online users will buy something online in 2012. More specifically, 79 percent of smartphone and tablet owners have used their mobile devices for shopping-related activities. In December 2011, ComScore reported that 12 percent of smartphone owners used their phones to compare prices between different stores while at the shelf.
Empowered shoppers are a click away from comparing product features and benefits, finding the nearest location to buy, the best price, or ratings and reviews, at any time and in any place. This has shifted not just the in-store environment, but also the planning phase evidenced by the total reversal of planned purchases dominating impulse. This empowerment has done more than put marketing into overdrive: it has caused marketers to re-think their approach to virtually every key element of the marketing spectrum. The differences are core. From objectives to strategy to messaging — and from awareness, to pre-store, in-store and post-store — all are based on the very real fact that consumers are
Fueled by the Need for Integration
“Not so long ago, it was enough to have great strategy and a big idea. Today, even the best ideas have a hard time getting off the ground as consumers’ media and purchasing options — not to mention their attention spans — grow increasingly fragmented. While perfect integration is unachievable, companies that do the best job of harmonizing all their marketing efforts have an advantage.”
— Steve McKee, Bloomberg Businessweek
In the new, marketing express-lane, integration is mandatory. According to Innerscope research, Millennials switch media in and out, back and forth, on average about every 2.5 minutes. When faced with attention spans like this, multi-channel campaigns and a tightly integrated path-to-purchase approach are essential — they are the minimum required to get into the game. Campaigns need to be integrated from beginning to end — both in message and in timing — across all media, channels and touchpoints.
The difficulty in achieving this type of integration shows up in recent research from Forrester. Take social media: While 92 percent of marketers agree that social media has “fundamentally changed how consumers engage with brands,” only 49 percent say social media is fully integrated into their business strategy. Whether this 49 percent have yet to make the inevitable move into social media or are creating parallel marketing strategies, they are missing great synergies and falling behind competition.
And it’s not just social media that’s operating way out in front of the traditional, annual brand plan. As noted earlier, retail has ratcheted up its capabilities and its timetables. The challenge is to be sufficiently facile and flexible to take advantage of unexpected opportunities. If you’re not up to speed, you’re not at the table.
Express Lane Success Criteria
So what does marketing look and feel like when it is enabled by digital, controlled by empowered consumers and fueled by the need for integration? And how do we, as marketers, make it work?
For the first question, let’s look at how the Advertising Age 2011 Marketer of the Year, The Coca-Cola Company, is approaching this challenge.
Coca-Cola has developed a corporate-wide growth plan which it has named “Vision 2020” — a roadmap for how the company intends to double its revenues between 2010 and 2020. As a part of this, Jonathan Mildenhall, Coke’s vice president of global advertising strategy and creative excellence, has skillfully and cleverly outlined the creative growth strategy that he feels is necessary to achieve this objective.
Essentially, this strategy — entitled “Content 2020” — outlines Coke’s creative approach for leveraging many of the trends discussed in this article. It is instructive because of its willingness to completely jettison traditional approaches to accomplish its objectives — including formulating an entirely new marketing and creative vocabulary pinioned on the words “liquid” and “linked.”
What is Coca-Cola’s vision for making this work? And how might this apply to those whose marketing budget is not measured in billions? While we do not have the space to detail all aspects of Content 2020 (available on YouTube), here are the points we believe are most applicable to successful marketing in the express lane:
• Ensure your teams have the right skill sets and perspectives. Add technology experts who can stay current on developments in technology and the opportunities they present. Add consumers or shoppers — or at least open up your process for their input.
• Build a culture of collaboration — from ideas to technologies to co-creation and beyond. No one person and no one model can do it all. Get good
• Create a big, fat fertile creative brief. Move beyond insights to provocations that will lead to big, transformative actions. Every brief should be informed by business data, objectives, challenges and the input of both internal and external collaborators — most important, consumers.
• Iterate rather than replicate. The goal is to create unique versions of the big idea that are relevant to specific audiences — rather than replicate one idea across many channels and segments.
• Strive for balance. Most initiatives can be balanced, multi-channel campaigns, but they must be of various sizes — tent poles and tent pegs.
• Learn by doing. Get out there and see what works. Have conversations with consumers. Make adjustments on the fly and keep improving.
• The brand is “always on” — a continuous flow of conversation and storytelling rather than a series
To these, we would add two more:
• Innate understanding. One can’t meet the demands of speed without innate core knowledge of the consumer, the consumer as shopper and the connection points along the path-to-purchase.
• Uniformity of vision and the scope of the task at hand. Everyone is in sync on definitions, strategies, objectives and their role in making it happen. Everyone is trained to the level of performance needed.
No question: speed can be scary. However well prepared, there are still plenty of speed bumps as marketers shift into high gear and move into the express lane. But speed is also exhilarating! We may not know what’s at the end of the road but the opportunities seem boundless. Have a great ride!