It is nearly 10 Years on from the Global Financial Crisis (GFC) but it seems that the lessons of 2008 have not been learned. Today, the alarm bells are sounding once again and there is fresh talk of crisis. However, this time, it is the Marketing department which is taking centre stage. With soaring digital marketing budgets and endless mainstream messaging around act-now-or-lose-out digital transformation, businesses are blindly hurtling towards brand disaster.
Digital Transformation has become THE imperative for organisations today. The methods of customer engagement are changing. There has been a profound shift away from the dominant legacies of TV, newspaper and print, to the new and current medias of smartphone, screen and the tablet. This massive shift has created a huge opportunity for businesses to create a competitive advantage using new customer channels.
Although many people are talking about Digital Transformation, many leaders still do not understand what this is about. Many of the programmes being badged as Digital Transformation are nothing more than digital facades, process optimisation initiatives or tactical cost related changes. Many are still applying cost control strategies which do nothing to deliver relevance to the digital-first consumer, differentiate from competition and drive growth.
Digital Transformation is undisputedly a CEO led strategic initiative with the potential to create source of competitive advantage. However, the current narrative among independent consultants is that leaders are not taking this seriously enough, especially when it comes to brand strategy, brand positioning, Marketing and the opportunities that the shift to digital is demanding.
I have written a number of posts on LinkedIn already about how I believe that corporate strategy and Marketing is changing due to Digital. My view is that:
- Interruptive Marketing is losing its effectiveness
- Brand “engagement-focused” Marketing is now more important than ever
- New trends such as Influencer Marketing and Content Marketing are not well understood
Kevin Adema, is a connection of mine who understands what this is all about. Kevin is the Managing Director of Emissary Insights, a Digital Transformation consultancy, keynote speaker and author of Digital’s BIG short and Mastering Digital Strategy, an on-line digital brand training program.
Kevin believes the current business environment is dangerously similar to that before the financial crisis of 2008, where leadership complacency and lack of understanding is going to have serious disruptive consequences, but this time for Marketing departments, agencies and staff who are required to drive revenue, customer engagement and brand loyalty.
I caught up with Kevin recently to talk about his thoughts on the Crisis in Marketing. His latest book “Digital’s BIG short” is a serious call to action. (The Big Short tells the story of the financial crisis through a group of outsiders and misfits who predicted the housing collapse in advance and made money through betting that stocks would go down)
Simon: Kevin, pleasure to talk to you again. Can you tell us a little more about your background?
Kevin: Thanks Simon and likewise, great to connect. My path into marketing is a little unconventional as my formal university training was actually in both Business and Psychology. Those two disciplines enabled me to learn the pivotal facets of business while fusing in the human-facets of behavioural psychology. Only through merging those two, did my career in marketing truly begin.
My entire career has been in the agency / consultancy realm. I’ve worked in agencies and owned and ran my own agency. I’ve worked in the consumer, B2B, healthcare, government and non-profit sectors but each time, my joint business-psychology approach has enabled an out-side-in perspective addressing both the needs of the business and the wants of the consumer.
That’s my sole focus now. I run Emissary Insights where I empower corporations to realize business goals through the strategic framework of marketing in today’s digital world. To that end, I couldn’t agree more with Gary Vaynerchuk when he said:
” I do not believe there is one single university on earth that is teaching marketing for the world we live in”
Marketing as a discipline has dwindled into a tactical existence. Marketers need to be the champions to usher in a new brand and business paradigm that is congruent with today’s consumer behvioural decision making patterns.
Once a corporation grasps the mandatory expectations and desires of their digital audiences, the operations and marketing efforts quickly align: they begin to deploy the right programs and right messages in ways that are meaningful to consumers, driving relevancy and engagement and realizing positive sales growth.
Simon: That’s a message I align with. You mentioned that you got into digital Marketing early on before the Global Financial Crisis. What did you learn from those early days?
Kevin: Like most marketers, I “did digital” before the 2008 crash (websites, social, etc.) but the crash taught me the absolute power of consumer wants. Pre-crash, the market was in a total frenzy fuelled by consumers wanting real estate and the banks did whatever it took to make it happen. As I know you know, this approach was grossly detrimental, under-regulated and was outright catastrophic for millions.
But, it also showed me how when a brand understands the true intrinsic motivational drivers of an audience and can responsibly manage those drivers in context of brand relevancy, unbelievable things can happen.
In 2010 I successfully won a huge digital global campaign and I still have a slide from that presentation hanging on my office wall: “We have entered the Dialogue Age”
That’s what digital is. A way to understand an audience, a way to relate to them relevantly, a way to have a relationship that builds trust and a way to realize exponential growth. It’s a two-way street: talking and listening. And to be clear, I learned really quickly that all non-digital strategies and approaches don’t work in digital. Digital will only bring you results if you use it to understand and get closer to the consumer. Consumers demand that you understand them, they demand relevancy, they demand integrity. Fail to deliver against consumer demands and the outcomes (awareness, engagement and sales growth) just won’t happen.
On a somewhat semantic-type point: I don’t like the term “digital marketing” as it denotes regular marketing in a digital way. I say that I’m a marketer in today’s digital world. It’s very different and I encourage marketers to do the same.
Simon: I am seeing this trend myself. Customers want relationships and a feeling of community, they will buy from brands that they trust, brands that listen to them. Since I started DigiVue Consulting, I have made more of an effort to engage with people of all ages and it’s common theme whether you are 8 or 80. It’s called KYC. Know Your Customer.
So, what do you think has changed over in Marketing Landscape in the last 10 years and why do you think this has happened and what has driven this change?
Kevin: I think the change has been far greater than most realize. When digital really started to gain momentum (let’s call that the early 2000’s when Facebook, Twitter and YouTube all launched), businesses saw that their audience was beginning to move towards digital. As always, marketers followed, seeking to bring a brand story to where the consumers now were. Simply, brands saw digital as the next and newest media. Again, marketers did then what marketers always did: followed the consumer trend and started simply applying their craft but now, via the new media.
This has always been the pattern: marketers did print promotion. Then, once radio arrived on the scene, they did print-based promotional marketing via the radio. Then, once TV arrived on the scene, they did print-based promotional marketing on the TV. And sure, there have been countless variations and adaptations over the past 100 years but basically, marketers used the media of the day to talk AT an audience using print-based, promotional approaches. Consumers read print. Consumers listened to radio. Consumers watched TV.
Simon: As a customer myself, I just find the interruptive style of Marketing annoying and a bit old fashioned. If I watch a You Tube video, I don’t want to watch an Ad, I just want to go straight to the content. If I’m reading an article on a blog, I don’t want an Ad popping up asking me to interact. If I’m watching TV, I skip the commercial breaks. It’s the age of the customer and with time becoming ever more scarce, I want to choose the content I engage with. I think a lot of other consumers feel the same too.
Kevin: Digital has changed the game. With the ever-growing adoption of digital into every-day consumer life, the consumer themselves has changed. This fact is the absolute cornerstone and is the key driver why things are changing: Consumers today are completely different than consumers pre-digital. Pre-digital, a consumer was accustomed to reading or listening or watching. But now, consumers are completely rejecting such monologue-based, brand behaviours; they want to be spoken WITH and not AT. They want dialogue, they want transparency, they want relevancy and, they ultimately want a digital-way of relationship engagement and not promotional brand behaviour.
“But now, consumers are completely rejecting such monologue-based, brand behaviours; they want to be spoken WITH and not AT”
Digital then is really pointing at a radical shift in human behaviour. Their behaviours and expectations have changed and subsequently this shift is forcing a new approach in corporate strategy. The core goals haven’t changed: For instance, marketing’s goal is still to fuse a relationship of trust between a brand and a consumer with the end objective of changing behaviour. (buy something, endorse something, do something new or different, etc.).
Again, the goal hasn’t changed. The approach to realizing that goal – because of digital – has changed immeasurably
I developed the below graphic to help explain the shift. On the left is pre-digital traditional business and operational / marketing approaches: Businesses were firstly focused on their own goals and objectives, this was applied via brands, then executed via campaigns towards the end target audience. (speak AT and not WITH)
On the right is what I call the Customer Analytic 3.0 model: It applies Tom Davenport’s teachings on analytics and sets the stage for operational and marketing approaches in the digital world: The consumer is in the middle, we use analytics and digital insights to understand their actual digital behaviour and relevancy desires. We then take that knowledge, map motive-based customer profiles and shape on-going engagement with motive-based, relevancy-based content. This is also where we weave in relevant, motive-centric brand messages. Through this, we realize engagement, loyalty, trust, changed behaviour and yes, business goals.
Simon: Using Analytics and empirical evidence to understand customer behaviour, using feedback to refine strategy and engage. The advancements in technology have meant that Marketing has become less about opinions and more about science. This is the driver for ideas such as Personalisation and Omni-Channel Access.
Kevin: Yes, you’ve got it. Businesses have spent the past 10+ years wrestling with the challenge of digitization and closing the gap to brand engagement. They are wrestling to close the gap because strategically, they are NOT in line with the expectations of consumers. Automation, AI or Technology is not the answer.
Simon: As a Digital Transformation commentator, I am seeing misalignment in strategic thinking and reality at the moment. I have seen apocalyptic narratives such as “Marketing is Dead”, “The death of the CMO”, “The Bonfire of the Marketers” all over LinkedIn. Your book, Digital’s BIG short, explores a number of these themes in a lot of depth. Can you tell me a little more about why you decided to write the book?
Kevin: The book has really 1 goal: sit up and pay attention; there is real data out there from the biggest firms (Adobe, HBR, Accenture, Forrester, Forbes, etc.) and they’re all saying the same thing: Marketing’s Bubble is about to pop.
But, like you mentioned, although the world is bombarded with constant narrative around the plight of the CMO, transformational challenges, etc. etc. there isn’t much that weaves it all together and points to a real solution. After spending years researching the failing results in digital marketing, I really didn’t think people understood what was all at stake and took it upon myself to empower meaningful change.
I also wanted to deliver the book in a way that enabled a framework that focused on bringing strategic value. As mentioned earlier, take a hard look at the training material and approaches for digital marketing: it’s flooded with tactical know-how. If as a marketer, you’re only executing tactics, you’re not a strategic partner, you’re a vendor. And when you’re a vendor, you’re a dispensable commodity and when you’re a commodity, it’s only a matter of time until you’re dead. The book then sought to give real, evidence-based facts to marketers so they could take it, use it and start driving real strategic change, have meaningful conversations with brand executives and concretely start realizing new, strategic, digital success.
Marketers – and executives for that matter – must objectively step back and weigh the very serious consequences that the digital landscape presents; organizations ought to be thinking of these things and acting upon them at the highest level.
Simon: Some leaders may see some of these ideas as alarmist and sensationalist, how would you respond to that? Is there any empirical evidence to support the hypothesis in your book?
Kevin: Indeed – I’ve already received my fair share of critiques that I’m crying out that “the sky is falling”
The book outlines 3 sets of drivers as empirical proof of a pending market bubble crash:
1. Consumer trends of increased comfort with digital and web technology
2. Consumer trends of exponential digital usage
3. Misaligned marketing practices and spend in digital
Briefly, as consumers are becoming more and more comfortable with digital, the human-centric patterns of living have shifted. We connect online, shop online, bank online, etc. The digital shift then is the “what has happened”. The “why it happened” is due to a new pattern of human behaviour. PEW research shows that 100% of the US market has a digital-first lifestyle. Facebook monthly usage now boasts 1/3 the entire world’s population and of course, simply consider banking trends, Amazon vs. traditional retail, etc.
The consumer is the key – they’ve moved the market. And it’s not coming back.
Simon: But many CMOs and Marketing professionals will say they DO understand this shift. Many are spending unprecedented amounts on Digital Marketing.
Kevin: In terms of overall investment, in 2014 digital marketing spend was $57.29 billion (US dollars) by 2019, it’s forecasted to be $103.37 billion. Moreover, the available options for brands is exponentially growing. Chiefmartec.com shows that in 2004, there were 5 main digital marketing options yet in 2016, there are over 2,000. Additionally, MarTech Advisors just released that in 2015 there were 38 marketing automation vendors, in 2017, there are 284. Yes, the market is rapidly growing but it’s incredibly fragmented. There’s money to spend and there’s endless options where to spend it.
But…the key insight in this is the consistently failing Return On Investment (ROI).
As consumer trends continue to be ever-more digital and as marketing spend and marketing options escalate exponentially, engagement rates continue to plummet. Both Forrester and Buzzsumo have published these facts: Instagram’s brand engagement rate fell by 50% in 2015, Per-follower interaction rates on Twitter were down 10% during the same time. Per follower rates on Google+ down by 35% and Facebook’s brand rates have fallen over 20% since January of 2017.
Simon: This paints a pretty comprehensive picture. I can imagine that leaders are looking at the statistics and losing faith in their digital teams as they are not delivering
Kevin: Yes, Confidence in digital is failing: Forbes showed that only 32% of brand marketers believe they’re executing an effective digital strategy. Outcomes are failing: Accenture digital’s study showed that only 45% of executives believe that digital will achieve business objectives. Competence is failing: Sapient’s national survey showed that 50% of brands have switched marketing agencies (or plan to in the next 12 months) for one with greater digital knowledge or, have already hired specialists to handle digital work.
Alarmist? Yes, I’m alarmed and I’m ringing the bell: The consumer has moved the market. It’s now all about engagement, relevancy and dialogue. The market is flooded with options promising brands a solution to their digital-business needs yet the brand engagement rates in digital just aren’t there.
I firmly believe that once CEO’s start looking at this data, they’ll be ringing some bells of their own…
Simon: Wow, this tallies with what I am reading in social media. About how Digital as a channel is failing, how it isn’t living up to expectations, that it’s time to move back to old methods because the promised ROI just isn’t there.
So if the problem isn’t digital marketing itself or the amount of investment, what is it? Are you saying it is the leadership, the agencies or even the Technology?
Kevin: Technology isn’t the problem and it’s definitely not to blame.
The ROI isn’t happening because marketers are using the technology with dated strategies that again are completely irrelevant in today’s digital-first, consumer-driven landscape. This is exactly what Nassim Taleb spoke about in his works around antifragile. Because Digital is so different than Traditional, the craft of marketing is no longer resilient or robust, it is antifragile. Brands have to overhaul their training and education to become relevant.
I always explain it this way: Digital is to Marketing as Gunpowder was to War.
In war, before Gunpowder, generals deployed strategies that saw each army line up on opposite sides of the field and using spears, shields, arrows and swords, they’d advance and crash into each other. Then, once gunpowder arrived on the scene, you still saw generals using pre-gunpowder strategies: even with guns and cannons, they’d line up on each side of the field and crash into each other. BUT…as time went on, you saw that the strategies of war shifted BECAUSE of gunpowder. We now have snipers, drones, sneak attacks, etc.
Bluntly, generals figured out that using pre-gunpowder strategies in a gunpowder-first world led to countless unnecessary casualties and a guarantee that not only would they lose the battle, they’d likely lose the war.
Digital has done the same thing to marketing. You can’t use pre-digital strategies with a digital-first consumer and expect a favourable outcome. Marketers have to start taking this seriously and invest in strategic training where they learn to deploy digital-customer profiling, consumer-centric content for engagement and overall Analytic 3.0 approaches to measure, learn, adapt and grow with their audiences.
Marketers need to figure out that using pre-digital strategies in a digital-first world will lead to consistently failing engagement numbers, loss of brand relevancy, loss of revenue and as such, a likely guarantee that they’ll render themselves terminated from their role. Harvard Business Review just published a piece proving that the CMO has the shortest lifespan of any C-level executive…is there really any wonder why?
Simon: What do you think the future holds, if these issues are not dealt with? How do you see the Marketing landscape playing out?
Kevin: MediaGrowth’s executive summit predicted that by 2020, there will be a massive cull in the marketing world and that there will be no marketing or advertising agencies left.
I sincerely hope that’s not the case but, at the end of the day, this is a business decision. Marketers have the responsibility to know the audience, know what the audience wants and deliver the brand story relevantly driving a relationship of trust and positive changed behaviour (sales, loyalty, growth)
CEO’s are going to hold marketers accountable. Period.
There will be those marketers who realize the shift. This is not an ego thing. This is not about an error due to past knowledge. This is an opportunity to admit that things have changed and that brands must change too because of digital. Now is the time for marketers (and organizations) to take the appropriate steps to render themselves relevant and drive the strategic change required.
Sadly, there will also be those who despite the ever-growing evidence of required change make it an ego thing. Stick to “what’s been done before” and watch their audiences slip away into the digital abyss.
Simon: So if there is a problem, who do you think will raise the red flag?
Kevin: What I’m carefully watching now is who’s going to make the call. If the CEO makes the call, marketing’s chance at C-level inclusion is slim-to-none moving forward. If marketers make the call to know the facts and leverage them to strategically elicit change, they’ll deserve a spot at the C-level table, receive the respect and be a key catalyst for future growth.
Simon: I am very much in agreement with this narrative, having observed some of these trends myself. Doing Digital Transformation is popular at the moment, but many are just using Technology tactically to drive operational efficiencies and not using it to drive strategy. Marketing has to be a part of transformation, it is a key piece of the puzzle and there is currently a lack of understanding about how crucial this is.
So as a business leader, what can I do today to start addressing these issues?
Kevin: Of course I need to say “Read the book” (it’s FREE at digitalbigshort.com)
Beyond that, invest in training and education. Be humble enough to admit that because of digital, the landscape has categorically shifted and without new strategies, approaches and methodologies, you’ll be bringing “knives to the gun fight”. Today it’s not the marketer’s fault but if you don’t take action today, tomorrow it will be.
Stop taking courses on tactical deployment. Start strategically looking at the real issues facing business and be responsible for your ultimate job description as laid out by the Grandfather of marketing, Peter Drucker:
“the Aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.”
The goal of marketing hasn’t changed. The landscape of marketing – because of digital – has changed forever. Ask yourself: do I really know my digital consumer? What motivates them? What matters to them? How am I relevant? How do I build a relationship?
If you don’t have concrete answers, start looking for places that will help you – and fast.
I know there are scores of options out there but feel free to have a look at my program: Mastering Digital Strategy. It’s 5 on-line courses that intentionally take an out-side-in approach using the lens of an agency executive / consultant. Learning should be disruptive, it should force you to step outside of your comfort zone and look at things objectively. The course is 5-6 hours long so it does not take long to complete. It covers what I think are the 5 must-know topics of: Strategy, Programs vs. Tactics, Customer profiling, Content for engagement and Analytics/Insights. It also comes with 10 templates that you can turn in to immediate action. You can see more about that on my emissaryinsights.com site.
Simon: So if the community wants to find out more information, how do we get in touch?
Kevin: Digital’s BIG short is available (for free) in either White Paper or eBook format at digitalbigshort.com (the eBook has some additional resources but the core narrative is the same)
You can also go to the Emissary Insights website where you can see my training programs and also receive other free resources, whitepapers, articles, etc.
And yes, I read my own emails: both sites can connect you directly with me.
Simon: Thanks Kevin for giving us a ton of insight and value. To summarise, what do you see as the key takeaways for the CEO?
Kevin: Set awareness, engagement and conversion goals first, then craft customer centric-strategies to achieve the goals. The choice of technology is tactical implementation only; It is the how and what you do with it that counts. When you are implementing CRM or Marketing Automation or Facebook Pages, these are only tactics to enable the realisation of your strategic goals. Centre your efforts around real consumer behaviour and measure it with with meaningful analytical practices, which will drive your business forward.
Secondly, It’s all about #TeamHuman, people won’t buy if they don’t know you or trust you. You need to build relevant relationships, communities and truly understand customer motivations and needs.
Thirdly, Invest in the right education, read the right sources of information. Marketing is changing and there is a lot of information about. The focus is strategic and the time to learn and act is NOW.
Simon: Thanks again Kevin, it’s has been a thoroughly engaging conversation.