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Digital Marketing Growing in Importance

April 2, 2013


“Digital marketing budgets averaged 2.5% of company revenue in 2012, growing 9% in 2013,” reports Gartner’s Laura McLellan, “and that’s still too low. At a time when 2012 marketing operating budgets were over 10% of revenue, spending only 25% on digital marketing implies some companies aren’t taking the shift seriously enough.” [“Digital Marketing Is Underfunded,” Gartner, 20 March 2013] Should retailers pay attention? They certainly should according to the staff at SupplyChainBrain. It asserts, “Retailers that do not fully grasp that retail is at a crucial crossroads and adjust their strategies will disappear, and the ones who do step up will see substantial value creation.” [“Retailers Must Adjust to New Realities or Disappear,” 12 March 2013] Digital marketing is clearly one of the changes that is taking place at the crossroads alluded to by the SCB staff.


McLellan notes that despite the fact that some things are changing dramatically, marketing’s purpose is not one of them. That purpose, she writes, “is the same as it has always been – attract, acquire and retain customers in order to grow revenue and profitability. And do that in a way that will bring the highest returns, regardless of marketing (or sales) channels used.” That said, Fiona Severson agrees with McLellan that digital marketing is growing in importance. “It is important for businesses to realize that integrated digital marketing is not just a fad,” she writes, “but rather an evolution in marketing.” [“Integrated Digital Marketing: The Basics,” Social Media Today, 18 February 2013]


Greg Satell also perceives digital marketing as more evolutionary than revolutionary. “We still need to run TV ads and in-store promotions, man conference booths and hand out brochures,” he writes, “but now on top of that we have a whole new world of algorithms, apps and devices to master.” [“How To Market In A Digital Age,” Forbes, 19 March 2013] Satell alludes to the fact that we now live in a mobile and multi-screen world. Retailers that don’t understand that basic reality will probably not be around a decade from now. Google highlighted the fact that we live in a multi-screen world with the following graphic.




With such a large percentage of multi-screen purchases made spontaneously, it is clear that retailers that don’t have a digital marketing strategy are missing significant opportunities. Lynne D. Johnson and her colleagues at Urban Times put together a list of “top trends to anticipate for 2013” that they believe will help companies address their marketing strategies. One way or another, all of the identified trends have digital technology as their touchstone. [“16 Definitive Digital Media Trends to Help You Plan 2013,” 13 February 2013] The list includes:


  • Online video platforms and social TV matures to new heights
  • Google+ gets an Android boost
  • LinkedIn, no longer just for B2B marketing
  • The visual web moves beyond Instagram, Pinterest, and Tumblr
  • Social commerce speeds full steam ahead from referrals to direct purchase
  • Context trumps content (well, maybe)
  • Mobile advertising grows up
  • Blogs explode again, yes, again
  • Augmented reality gets really real
  • Gamification, gamification, gamification
  • Native advertising gains ground
  • Multichannel publishing finds its groove
  • The end of online anonymity (?)
  • Social measurement will be standardized
  • Insights-based strategies rule
  • Finally, it’s time to sound the death knell for the silo


Businesses don’t necessarily need to master all of those trend areas, but they certainly must be aware of them and use them when appropriate. Satell asserts, “To meet the new challenges, we need a new strategic approach, a new mindset and new organizations. … In the digital age, marketers must change their focus from grabbing attention to holding attention by focusing on three core business objectives: sales, awareness, and advocacy. … Simple metrics such as awareness, sales and advocacy will give you an accurate snapshot of your brand’s health and how you can best improve it.” The first step in developing a digital media strategy is determining objectives that the strategy is supposed to achieve. As the old adage goes, “If you don’t know where you are going, any road will take you there.” Satell’s article goes on to provide some specific recommendations, supported by interesting videos that can help a company get a handle on digital marketing strategies.


“In 2013,” writes Severson, “if you don’t have an integrated digital marketing plan, you don’t have an edge. Brands that don’t engage with their consumers via digital media will slowly die out, and the ones that do will win the awareness and loyalty of the mobile user.” Like Satell, she provides a number of recommendations that will help retailers develop a digital marketing plan. She then writes, “Before you even begin to implement all of these other aspects of your integrated digital marketing strategy, it is important to set up metrics by which you can measure their effectiveness.”


McLellan concludes, “Digital commerce experience is the top priority for increased digital marketing spending in 2013. Multidimensional stories told with the intent of leading a prospect down the buying path and driving a transaction, commerce experiences provide consumers with a sequence of information, experiences (think entertainment and gamification) and channels that draw them into the buying process. Not fully mature yet, but all organizations should be exploring and piloting.” That conclusion is right in line with the trends identified by Johnson.


The SupplyChainBrain staff believes that retailers have little time (i.e., months rather than years) to develop and implement a winning digital marketing strategy. Part of that strategy, of course, is ensuring that order fulfillment meets customer expectations. It concludes:

“The customer is now in the driver’s seat, and Amazon is leading the pack whether all retailers realize it or not. With online sales, omnichannel, multichannel, social media, technology and customer sophistication booming, retail finds itself at a critical crossroads. Between now and holiday season 2013, major decisions will be reached by both in-store and online retailers that will result in a flood of retailer bankruptcies not seen since the dotcom bubble burst of 2000. Each retailer will have to forge a unique retail strategy
by providing a distinctive mix of price, selection, convenience and experience to offer a compelling reason for customers to shop with them. To realize this unique retail strategy, organizations must implement the right supply chain strategy and technology to bring customers real benefits and value. They will also have to be great not only in each channel in which they participate, but also in providing a consistent omnichannel view of how they can exceed customer expectations any way, anytime and anywhere the customer desires. Succeeding in all channels requires retailers to achieve multichannel operations excellence (MOE). This process begins with the development of the supply chain strategy for the multiple channels. It then adds the right fulfillment plan, processes, organization, technology and process of continuous innovation. The right supply chain technology will depend on whether retailers substantially enhance their distributed order management system and orchestration system, as well as employ a true demand-driven supply chain system. This technology will position the retailer to achieve multichannel and omnichannel excellence.”

Analysts have moved beyond discussing the future of digital marketing because the future is now. If the SCB staff is correct, the 2013 holiday season could be the turning point for many retailers. That’s not much time to jump on the digital marketing bandwagon and master all of the activities involved.

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