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STRATEGIC DIGITAL MARKETING
Top Digital Experts Share the Formula for Tangible Returns on Your Marketing Investment
By ERIC GREENBERG, ALEXANDER KATES
McGraw-Hill EducationCopyright © 2014 McGraw-Hill Education
All rights reserved.
THE DIGITAL PARADIGM
—by Alexander Kates and Eric Greenberg
In the not-too-distant past, advertising simply worked. Brand messages, crafted by the brilliantly creative, could be pushed to consumers through various forms of media—TV, print, and eventually online. The consumer, becoming familiar with your brand through these media, would choose to buy your product or service among few available choices. Instinct and familiarity drove sales. After all, consumers had very little information at their fingertips to make rational decisions. People would look at comparable products on a store shelf, and pick the brand that just felt right. Purchasing was a result of sentiment-backed guesswork.
Striving to be the result of that consumer guesswork, the advertising industry used surveys and studies to create generally accepted formulas that sought to determine the best ways to reach consumers. Proxy measurements, such as gross rating points (GRPs), often provided enough insight to make intelligent decisions about marketing-campaign potential. These methods served as a substitute for true campaign tracking, which was all but impossible before the dawn of the digital age. Marketers didn't always understand why these methods worked—but they did. In essence, advertising too was guesswork—it was just smarter guesswork, backed by a thoroughly researched and refined methodology.
The end result of this mutual guesswork is that big brands came out on top. Consumers' limited information gave companies the power to influence sentiments and choice by garnering eyeballs and attention through TV, radio, print, and the early Internet. Companies held all the cards in the company–consumer relationship.
Under this old paradigm, marketing was about pushing your message to consumers, and getting them to hear it. Your competition was other brands' messages, and anything else consuming your target customers' attention that prevented them from falling in love with your brand at first sight. It was the marketer's job to cut through this background clutter present in the marketing universe. This was generally done by throwing a profusion of advertising dollars behind brand messages to push them through these traditional media channels, as shown in Figure 1.1.
THE NEW WORLD OF MARKETING
Today, there is a whole lot more background noise than there used to be. For starters, consumers have a nearly unlimited amount of information at their fingertips. There is also more competition on nearly every front: more competitive products and services, more channels to compete in, and more considerations in the consumption process. Pushing a message through this increasingly dense noise is becoming an exercise in futility.
Fortunately, the information age has created new, bidirectional channels that cut directly through the noise. These channels can be utilized to carry messages effectively through to the consumer. To focus our message into these channels, we use the metaphor of a giant lens that focuses the message and then disperses it into each of these digital channels, as shown in Figure 1.2. We have to place this lens over our traditional marketing methodology and view the digital world of marketing in a brand new light. Accepting our near-blindness, and putting on our digital glasses, is essential to getting our messages through these digital channels—and into the ears and hearts of our consumers.
However, the messages cannot simply be pushed through all of these channels by marketers as they used to be. In some channels, the message needs to be pulled from the other end; in others, you need to find a group of peers to push the message for you. And in still others, you need to entice the consumer to discover your message on their own, or to let consumers decide among themselves how to get the message through the channel. Information now flows both ways, and consumers themselves feed information into these channels. Things are a lot more complicated than they used to be. The more complex digital lens diagram shown in Figure 1.2 would not look out of place in an advanced physics textbook, and if anything, is a grave oversimplification of how marketing works in the twenty- first century.
We're in a different world today. It's unfortunate for us marketers sometimes, but consumers these days actually know things. In fact, they know a lot. Google connects potential customers with countless third-party opinions, articles, and reviews from around the web. Communications between customers, as well as a customer-service experiences, are entirely public on Twitter. Brand interaction and sentiments, including what our personal acquaintances think, are freely available on Facebook. Photos and video clips, helpful or harmful to a brand, circulate Instagram and Vine. If one customer has a less-than-perfect experience with your product in Winstonville, Mississippi, the entire world will know about it in minutes. The hyper-informed consumer knows everything about your brand—the good, the bad, and the ugly. Our brands have been stripped of their warm, protective clothes. They stand naked in the cold to be judged by the eyes of the world.
Fortunately, there is a silver lining to be found in all of this dismal complication. Digital media channels afford an opportunity to develop deep connections with consumers beyond what was ever previously possible. When your naked brand can be judged completely, without hiding behind your unverified claims and pushed messages, customers come to truly know your brand. If they still like what they see, the relationship, trust, and devotion are deeper than ever before. Brand evangelists will champion your brand for you, feed media channels, and facilitate getting your message through to consumers. The most innovative brands not only push creative messages, but allow consumers to absorb those same messages via osmosis from the rest of the world. Many companies have done this with great success. For instance, Nike involved consumers directly in developing complementary wearable fitness bracelets and mobile apps. Early adopters cultivated a brand image that Nike actually cares about health and fitness, and that's something that customers really got behind and spread the word about. Brand image is no longer something marketers create: It's something marketers seed, media channels fertilize, and consumers themselves grow.
The new digital paradigm has also created a world that demands brutal honesty, full accountability, and complete transparency from product and service brands. We will be punished more severely for our mistakes, and will be scrutinized more acutely for how we deal with them. Success stories will spread more quickly and more widely than ever before, too. Marketers shape and facilitate brand messages through media channels, and must be diligent about their messages being everywhere that consumers are looking for them. In this commoditized digital world, the role of the marketer has never been more complicated—or more important.
THE MODERN DIGITAL CONSUMER
You no longer know your consumer. You think you do, but you don't. You've been left in the dust. All of the research and data collection you've done over the past several years doesn't begin to paint a picture of the modern consumer. The truth is: the consumer is evolving much faster than you are. Today's world is one in which technology and free information flow enable the consumer to always stay several steps ahead of large organizations seeking to sell their products and services. By failing to act swiftly, companies are only driving nails into their own digital coffins. Examine the following fictional scenario:
A young man strolls into a Walmart retail store. As he passes through the automatic sliding doors, he is identified through a unique ID chip in his smartphone: He is Joe Davis, a 35-year-old male from Manalapan, New Jersey. The Walmart database shows that he spent an average of $93 per month at this retail location over the last 12 months, 45 percent of which was clothing, 23 percent was sporting goods, and 22 percent was personal care. All of the Walmart employees have this information on their point-of-sale tablets and are ready to assist him, should he require it.
Earlier this week, Joe received an automated 15 percent off dental products coupon by e-mail because his purchases in that category have dropped off dramatically over the last three months. When Joe enters the store, the coupon pops up on his smartphone as a reminder, along with some loyalty points he's earned just by walking in.
Joe makes his way to the dental products, and begins to examine the electric toothbrushes offered by several competing manufacturers. One of the products from Oral-B catches his eye—he vaguely remembers a TV commercial he saw about it that intrigued him. Joe pulls out his smartphone and scans the barcode on the back of the Oral-B box using a price-check application.
The product pops up immediately on his phone, citing 253 reviews from confirmed Amazon.com customers. The reviews are lukewarm at best—3.2 out of 5 stars. The most up-voted review indicates that many customers feel the rotating mechanism makes their gums feel numb. The shopping site recommends several better-rated alternatives from competing brands, including a popular Philips Sonicare brush that received 4.4 out of 5 stars across 942 reviews.
Joe looks up from his phone, and takes one large sidestep to position himself in front of the Sonicare toothbrush. He inspects the packaging briefly, and returns his attention to his phone. Using his social shopping app, he finds that Sonicare is liked by 355,000 people on Facebook, including several of his closest friends. Several of his followers also follow the Sonicare brand on Twitter. The top three Amazon reviews (two of which are from dental professionals) are glowing, and recommend the product over competing brands' products. One of Joe's Facebook friends even reviewed a similar Sonicare model on Amazon, giving it a five-star rating.
Joe then performs a voice search for the best electric toothbrushes and he finds that the Sonicare website is the first link to show up in Google. A second link on Google's first page of results compares Sonicare's top offerings to those of Oral-B's and two other competitors, and concludes that Sonicare fared better in a clinical test. As the icing on the cake, Joe also notices a paid search ad stating that Sonicare is currently running a coupon promotion for a free set of replacement brush heads with the purchase of this toothbrush line.
In ninety seconds of brief research, Joe has made his purchase decision—the Sonicare toothbrush is the clear winner. It may not have been the first brand he identified with, but the social sentiments and data at his fingertips have influenced his decision. Let's continue Joe's journey:
Joe's social shopping app indicates that the price is $12 cheaper on Amazon.com, $16 cheaper on eBay, and the same price at the Target store down the street. Although he can place the order online with his phone with a single click and receive it at his front door in two days, he decides the immediate gratification of using his new toothbrush tonight outweighs the cost savings. Joe puts the Sonicare toothbrush in his Walmart shopping cart.
As he continues down the dental isle, his smart shopping cart recognizes the toothbrush by its RFID product tag. Automatically, the top-rated and most-purchased complimentary toothpaste for that toothbrush pops up on his smartphone screen, along with an additional 10 percent off coupon if he buys both together. Who doesn't need more toothpaste? Joe decides to buy the toothpaste too. His intelligent shopping list app recommends a few additional products that are verified to be currently in stock at this Walmart, and he drops by those aisles to pick those items up too before heading to checkout. He checks out at the register by quickly swiping his phone over a scanner—earning more store loyalty points in the process—and off he goes, toward a future of improved dental hygiene.
This may seem like a scene from the distant future, or some sci-fi TV show depicting the year 2034, but it isn't. All of the above technologies are readily available today and are in use, though as of this writing not necessarily by Walmart. In fact, the entire consumer side of the experience, including real-time product and price comparisons, social data, recommendations, and intelligent mobile shopping apps, is becoming the status quo for the new digital consumer. Brick-and-mortar stores are struggling to cope with the flux of tech-savvy customers shopping this way. Many young people are utilizing Amazon's Price Check app in stores, which allows them to explore products in person, scan the barcodes, and then order the identical products cheaper on Amazon with a single click (with free two-day shipping and generally no tax to boot). Retail stores in several U.S. cities are outraged at the loss of sales and have banned use of the app in their stores. This is not the future of the in-store shopper. It's him in the present. This is how consumers shop today.
Conversely, although every one of the retail store technologies mentioned are available, it is nearly impossible to find a retail establishment that's implemented all of them—or even one of them. This is because the consumer is evolving much faster than retail stores, and faster than even the most agile large organization. As soon as new technologies and tools are available, consumers are using them within days. On the other hand, businesses have to wait for project proposals, management approvals, budget allocations, and partner contracting. It takes businesses months, and sometimes years, to make the equivalent infrastructure changes. The digital train has already left the station, and we marketers are all running to catch up to it.
Brick-and-mortar retailers may be lagging behind, but eRetailers are doing a much better job innovating. Digital storefronts like Amazon and Zappos are redefining standards in customer service over the web. eBay is creating unprecedented marketplace efficiency and virtually eliminating the barriers between buyers and sellers. Woot and other daily deal sites are making online shopping more exciting than ever, and Groupon and LivingSocial are making the concept of online shopping local again. Apple and Google are changing the way we purchase and consume media. Still other storefronts utilize crowdsourcing, social buying, and new levels of customer interaction to bridge the gap between the online and in-store experience. As mobile technology advances, and as online retailers evolve their platforms to incorporate the latest intelligence engines and tracking technologies, we expect that the fine line between online shopping and brick-and-mortar shopping will blur even further, and eventually, will disappear completely.
The bottom line is that the world, and the marketing universe by necessity, is evolving faster than any of us realizes. This rate of change is only going to accelerate in the coming years.
THE NEW CONSUMER'S JOURNEY
Joe's journey epitomizes the innovative modern consumer in the real world. However, to truly understand the full spectrum of consumers' purchase decisions more generally, we think it's helpful to visualize the process. In 2009, McKinsey and Company developed a diagram to help marketers understand this journey:
The consumer begins with a need or desire to buy a type of product. At this time, the consumer may have some preconceived notions about product specifics she deems important, and is perhaps even considering particular brands. From there, she does research and considers her options, eventually leading to a moment of purchase. Post-purchase, the consumer evaluates her experience with the product, until the moment that the need or desire arises to purchase this same category of product again—coming full circle back to where she started.
All consumers, however loosely, follow this cycle during their first purchase of a product category. However, at that moment when the customer feels the need or desire to purchase another product for this function, she must choose one of two distinct paths: The first is taken by consumers who are thoroughly satisfied with their purchase and do not seek to consider alternatives, ultimately purchasing the same exact branded product again. The second is followed by consumers who are not wholly satisfied, and who therefore reenter the research phase leading up to this second purchase decision.
This cycle makes perfect sense, and for the most part accurately describes the general thought process consumers go through with regard to purchases and brand loyalty. However, the last several years have seen a rather frightening trend that all marketers need to be aware of: Brand loyalty, traditionally one of the most crucial goals of marketing, is decreasing in developed countries. Some say it is dying a slow, painful death, and that consumer behavior has changed beyond recognition.
Excerpted from STRATEGIC DIGITAL MARKETING by ERIC GREENBERG, ALEXANDER KATES. Copyright © 2014 McGraw-Hill Education. Excerpted by permission of McGraw-Hill Education.
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