Digital Marketing Research Round-Up 2011

Several important pieces of research have been published over the past few months from Forrester, Gartner, and McKinsey. They point to a digital media and tools sector that is rapidly growing in importance. These research documents and surveys demonstrate that Intelligent Positioning is continually anticipating the needs of business in the digital sector.

Forrester US Interactive Marketing Spend

Forrester research carried out in the field in August 2011 opens by estimating that advertisers will spend US$ 77 billion on interactive marketing by 2016. That is as much as they spend on Television advertising today. They estimate that search, display, mobile, email, and social media will grow to 26% of all advertising spend as they become embedded in the marketing mix.

Forrester make the interesting prediction that this growth in digital marketing will help companies become adaptive, killing off daily discount deals, re-emphasizing the four marketing P’s of Product, Price, Place and Promotion and in doing so turn consumer electronics into audience-targeting tools.

Forrester believe that the key drivers of growth over the next five years will be:

  • Bigger interactive teams. Marketers have more interactive staff now than they did in 2009. This doesn’t automatically mean more mature interactive programs or increased budgets. But it usually allows for program expansion. One financial services firm we talked with grew its interactive team from 18 to 70 people in three years. Now it is a top advertiser on many display networks, has tripled its email marketing volume, and has a social PR effort under way.
  • Excitement about emerging media. Marketers buy into mobile, social, or online video more now than when the recession forced them to stick with standby interactive tools like email or search. Revenues from PR Newswire’s multimedia products are up 22% this year, compared to 2009 when they were down 3%. And Intuit has a group dedicated to transforming cutting-edge technologies like Kinect into mainstream marketing options.
  • Interactive marketing effectiveness. Marketers will invest more in interactive channels because they believe they will generate better results over time (see Figure 2). David Schwartz, marketing manager for power tool manufacturer STIHL Limited, explains, “People will spend on programs that show measureable returns. And you can measure anything through digital.”
  • Customer obsession. Firms looking to differentiate in the age of the customer will invest to create customized experiences across their customers’ preferred touchpoints (see Figure 3). This will augment existing online media efforts and inspire development for new platforms like smartphones and tablets. Forrester projects that by 2015 smartphone adoption will grow 150%, and 82 million consumers will own a tablet.

Focus on social media integration

Gartner research of the 5th of August 2011, points to the focus on social media integration. They recommend that companies using social media need to communicate how they are going to integrate it, measure it, and use it, to inform all of their marketing activity.

They found that companies buying social media services want providers to show them how to market to and through social networks, generate leads, develop online Communities, measure word of mouth marketing and manage their online reputation.

Migrate outdated websites.

Gartner recommend that agencies and consultants help client’s websites shine through the market clutter with true interactive digital experiences as opposed to static pages covered in one way messaging. They challenge suppliers to develop strong point of view to offer a compelling and relevant user experience that takes full advantage of modern techniques and years of lessons learned.

The McKInsey research, carried out in October 2011 garnered responses from 792 marketing executives representing a full range of industries, regions, titles, and company sizes.

The importance of generating insights

The most important digitally related challenge for marketers is, according to McKinsey, ‘…generating and leveraging deep customer insights’.

It is clear that marketers are struggling with developing the right metrics and translating insights into actions that influence customer behaviour. In addition, a rather startling number, 18%, of respondents, said that their company had little data on customer behaviour and attitudes. Few companies are taking full advantage of the opportunity presented by exponentially increasing volume of customer data.

Driving competitive advantage through digital tools

McKinsey point to the need for focus and commitment to drive the competitive advantage that digital tools provide: ‘ Insights derived from how consumers behave and interact online can inform everything from product development and innovation to sales processes, but it requires a commitment to gathering, analyzing, and deploying data much more effectively than most companies currently do.”


Driving engagement and sales

The survey observes that while companies recognized the potential of digital tools to drive engagement and sales, few have seized the opportunity: only 14% of respondents said that the effects of digital tools in marketing have included the entry of new competitors. McKinsey observe that “Clearly it is only a matter of time before disruptive competitors that skillfully use digital tools quickly emerge and incumbents need to take aggressive action before a lot of current value is destroyed.”

The need for digital metrics

Another interesting issue raised by respondents with regard to digital tools, was the lack of existing digital metrics that quantify the financial impact of those tools or channels on the business. So looking ahead, McKinsey opine that most companies are finding it difficult to define an online business model to drive competitive advantage. The difficulty is that there is not a one size fits all solution because companies have to decide if they need to centralize or decentralize their digital operations and whether to standardize online activity or to tailor to regional and cultural needs.

IP anticipating and developing new solutions to meet customer needs

With regard to many of these findings, Intelligent Positioning are constantly striving to meet the needs outlined in these surveys and research documents. We are developing tools to enable clients to create a deeper, and faster dialogue with customers and then to measure the effects in qualitative and quantitative terms. This will include the development of metrics to determine ROI on specific digital activity and also on the overall marketing mix activity.