The Race Is On

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The Race Is On THE RACE IS ON KEEPING PACE WITH CONSUMER GOODs LEaDERs IN DiGITAL MaRKETING AND tECHNOLoGY in association with: Attention Reader: This is an interactive report. “Blip” the images in the section breaker after page 12 to experience what CG companies are doing to establish a loyal customer for a lifetime. Instructions on how to blip are available on the specified pages. contEnts Foreword .......................................................................................................................................................................... 3 Key Findings....................................................................................................................................................................4 Methodology and Acknowledgments .................................................................................................................. 5 Digital Marketing ...........................................................................................................................................................6 The Transformative Vanguard..................................................................................................................................8 SIDEBAR: Is Europe Ahead or Behind? ......................................................................................................................11 The Grail of Alignment ...............................................................................................................................................12 Facing the Challenges ................................................................................................................................................14 SIDEBAR: Q&A ....................................................................................................................................................................16 The Transformative Lead ..........................................................................................................................................17 Investing in Digital Marketing ..................................................................................................................................19 External Providers ......................................................................................................................................................22 Reaching Out ................................................................................................................................................................24 SIDEBAR: The Rise of Business Intelligence ...........................................................................................................25 SIDEBAR: Questions for Reflection ...........................................................................................................................27 Conclusion .....................................................................................................................................................................28 Foreword Executives face a bewildering array of digital marketing technologies. No longer dominated by print, marketing today requires integrated website, mobile and social media strategies alongside well- conceived and executed data privacy and security strategies. Further needs, often buzzwords, include omni-channel, data mining and analytics, web and mobile apps. It’s a lot to digest. But at the same time, the collective capabilities of these technologies to grow and optimize sales and marketing are too profound to be ignored. A vanguard of transformative companies is already leading the way. These companies are using a vast array of tools and strategies to achieve compelling results. Benefits include greater marketing efficiency and effectiveness stemming from a single view of the customer combined with targeted, personalized, well-timed messaging. Transformative companies are, in fact, going still further, achieving closer alignment between marketing and groups such as logistics, supply chain, new product development and finance. All of which leads to improved consumer experiences and an optimization of corporate performance. Amid so much opportunity, challenges remain. For one, although many companies believe they are on the path to optimized digital marketing, in many cases their efforts are siloed. E-commerce and the website often fail to coordinate with mobile or in-store marketing efforts. Or different groups define, collect and interpret data differently, leading not only to inefficiency but also to false conclusions. Another key challenge is finding the right resources. Truly digital business requires close collaboration with the IT department. But for many companies, IT is already operating at full capacity. Or alternatively, the existing management structure provides insufficient incentives for marketing and IT to enter into a full partnership. As a result, leading companies are seeking more sophisticated services from their external advertising agencies and technology providers. The above barely scratches the surface of all the opportunities, learning and evolution taking place. The fact is, this isn’t only about digital marketing, it’s about developing a marketing, IT and broader business platform that is more attuned to the digital era. Those that get this right for their customers will have a substantial advantage over their competition. The questions become: where is your com- pany on its digital marketing journey, and where does it hope to go? 2 | THE race IS ON Key FinDinGs Two out of three executives, 65%, say their companies need to do more to harness digital technology to improve marketing effectiveness. Forty-three percent of executives believe their IT departments are so busy they are unable to help with digital marketing technology needs. Forty-two percent of executives believe their current approach to digital marketing is too fragmented—rising to 47% among companies with greater than $17 billion in sales. Silos contribute to the challenge: digital marketing is often organized as a separate function (37%), while e-commerce often operates as a separate business unit (39%). Three out of five executives, 61%, say their companies must meanwhile do more in terms of harnessing marketing data to improve effectiveness in complementary areas such as product development and logistics. Half of executives, 50%, report that in one or more instances, their digital marketing has failed to integrate with essential back-end processes. One out of five executives, 20%, describe their digital marketing approach as “transformative.” These are leaders that have already embraced a broad array of digital strategies: social, mobile, web and analytic tools and technologies transforming not only sales and marketing but also the overall business. Relative to Europe (14%), executives from the U.S. are nearly twice as likely to describe their digital marketing efforts as transformative (25%). The key questions for non-transformative companies: how far ahead are the leaders, what can be learned from their examples and then, finally, how fast do others need to move to avoid leaving money on the table or otherwise losing competitive advantage? Key goals for both transformative and “other” companies include: • Achieving closer alignment between marketing and IT • Harnessing “big data” to improve marketing • Leveraging digital to grow existing or reach new markets • Building a “single view” of each customer across all channels Related challenges and opportunities include: • Optimizing the consumer experience • Optimizing mix of traditional versus digital media spend • Developing an integrated media strategy (including print, TV, mobile, web, social media, press) • Improving the accuracy of sales allocations (what spending delivers what benefit?) CopYrigHT © 2014 FORBES INSIGHTS | 3 Transformative companies are well ahead of others in nearly all facets of digital marketing. But their lead is particularly acute in areas such as: • Integrating digital and POS marketing • Analyzing campaign effectiveness • Noticing and responding to the actions of competitors • Integrating mobile, Internet and social media with broader marketing strategies • H arnessing big data to improve not only marketing but also product development, logistics and other operational areas Executives, both transformative and otherwise, share a handful of new, digital marketing-related challenges, including: • Identifying best-in-class digital marketing technologies and vendors • Finding advertising agencies adept at integrating digital/traditional • Integrating advanced marketing technologies with existing IT • Working with IT to determine specifications Executives from companies both transformative and otherwise are generally satisfied with the performance of their investments in digital marketing. Over the next year, 78% of executives believe their spending on digital marketing will either increase (62%) or increase significantly (15%), with such overall figures consistent for both transformative companies and others. Fifty-nine percent indicate that their companies are amenable to adopting a greater degree of technology outsourcing— specifically, a model where a third-party, full-service technology provider is able to assist with a greater degree of both front-end marketing and back-end operational processes. Fifty-eight percent say they are open to working with consultants who can help manage both front- and back-end digital marketing processes. As
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