Marketing Into 2020
20th of Jul 2020
Director of Strategy and Marketing
The start of a new decade brings with it a natural re-evaluation of value and purpose. Whether personal or professional, taking stock of past learnings – while we prepare for a future where curiosity, integrity and clarity are core tenets – is no small feat.
As we continue to partner together and solve critical business and omni-channel marketing challenges, these thought starters serve as observations on the key issues impacting marketing into 2020, as well as our philosophical approach on the value we hope to provide through strategy.
Personalising to segments of One
Never have we been able to access such an in-depth understanding of our target audiences. Much of this is down to the incredible targeting capabilities of advertising platforms and the evolution of audience measurement and analytics tools. This opens unexplored opportunities to be more meaningful and persuasive with campaigns via eDM, marketing automation and through digital media buys (e.g. nurture campaigns through LinkedIn).
Personalisation doesn’t simply mean first-name customisation. Brands will find it challenging to be competitive without a highly tailored approach to audience segmentation, as customers continue to disengage with generic correspondence. Research continues to indicate that customers seek a relationship with brands that understand them as people with distinctive behaviours and motivators- not as pre-defined segments, generic titles or simplified demographics.
Personalisation should not be seen as a shortcut to a sale, but rather as a long-term strategy to increase brand loyalty and earn customer trust on a one to one basis. Brands and organisations who invest time and focus into customer journey architecture, automated persona-based marketing (where art meets science) and data lakes are positioned for success in an attention economy in which customers expect value at every touch point.
A recent project for BMW Australia involved a digital transformation to persona based targeting across their marketing channels. This involved strategising with their marketing and IT teams, research stakeholders, data providers and publishing platforms to develop new planning technology. The project included analysing, defining and creating segmentation models for over 450k customer records and resulted in digital marketing efficacy and an Australian sales record for YoY increase, as well as units sold.
It remains important to note legislation and evolving societal privacy concerns continue to impact platforms such as Google and Facebook on permitting brands to segment toward audiences of one. However, the drive toward nuanced segmentation and personalisation based on motivators and behaviours, remains critical to results.
The rise of digital marketing conditioned an almost unhealthy obsession with metrics like CPC, CPL and CPA. However, as brands increase in sophistication (better understanding the complexity of their customer journeys and purchase decision-making across multiple channels) this belief that all marketing can be directly measured has evolved.
The proliferation of multi-device usage, increased availability of re-marketing, re-targeting and multi-platform engagement, has shown that both customer decision making and the drivers of conversion are not linear. This has led to a universal recognition that it is impossible to accurately measure the impact of all digital marketing activity. 2020 represents a tipping point when marketers and brands accept a world of ‘immeasurable measurables’. Brands are encouraged to alter their marketing invest philosophy from the ‘dollar-in-dollar-out’ model toward one which is cognisant of the holistic influence of investment across an entire ecosystem of channels.
This change shouldn’t simply apply to SEO and content channels, but also paid platforms including Google, YouTube and Facebook (which have been traditionally looked upon as performance marketing). Organisations are encouraged to shift attention toward long term nurturing activity, which isn’t immediately measurable, and aims at continually introducing (and re-introducing) audiences to brand value propositions- thus supporting the early and middle stages of a customer’s real-life purchase journey. The latter requires reconsidering the single minded focus upon performance marketing metrics.
Note: The research of Les Binet and Peter Field, as well as the principles of the Ehrenberg-Bass Institute have long substantiated these marketing philosophies.
Cookies (simply defined, the technology which tracks the sites browsers have visited) have been around for a quarter of a century. They help sites recognise a returning visitor and change its configuration to that visitors preferred settings (or stop a user from seeing a particular advertisement more than a certain number of times). However, as people spend more time away from their desktop and on mobile apps, many devices are blocking cookies due to privacy stipulations.
The increased adoption of wearable technology and connected devices such as watches, smart speakers, TV’s and digital assistants (like Amazon Alexa) presents an inherent challenge, as none of these support cookies. However, all of them present a new way of interacting based on non-cookie, signed-in first party data. Brands must find creative solutions to measure and identify users, in addition to navigating, targeting and deriving insights across channels which do not rely on cookies.
Effectively, this means the need for a brand to comply with legislative requirements around tracking and attribution,whilst identifying and communicating to its customers that it understands their position across the purchase journey. As an example, this could mean using emerging 1st party technology and CRM solutions to avoid advertising to customers who have recently purchased, but rather supporting post-conversion engagement with valuable and meaningful life cycle communications. What is certain is that campaign measurement will become ever more complex. Marketers will need to future-proof their measurement frameworks and reduce their reliance on cookies for tracking. And many brands will turn to measurement providers through their agency to help navigate the evolving media landscape.
From URL to IRL (i.e. Uniform Resource Locator to In Real Life)
As digital channels consolidate their dominance in 2020, 84% of marketers plan to refocus on brand building supported by an increase spend across online video and 70% of marketers plan an increase across social media (including LinkedIn, Instagram and WeChat). This supports a continuing shift by brands seeking to redress the balance between short-term performance marketing and long-term brand building.
The research of Les Binet and Peter Field suggests the optimal split between brand building/performance marketing is 60/40. These percentages vary marginally by sector, however this split remains the standard rule of thumb. The Field Binet research covered 996 advertising effectiveness case studies, from 700 global brands, across 83 sectors, spanning over 30 years of IPA Effectiveness data. This shift isn’t isolated to traditional bricks and mortar brands either.
For example: pure play digital brands will activate experiential marketing activities in order to build closer connections with their consumers. This is substantiated by research which shows that digital media spend is far less likely to be cost-effective for brands where their digital exceeds 50% of total budget. For Direct to Consumer (DTC) brands, a refocus on IRL, means more real-world experiences. Many DTC brands have been built exclusively online, however the journey from a web based, fast growth start-up to a retail phenomenon is increasingly commonplace.
An example includes Warby Parker, the US eye wear retailer that now has over 100 stores. As Warby Parker’s revenue started to grow, the company began opening brick-and-mortar showrooms across the US to build its brand. It expanded with the brand’s first national retail partnership with Nordstrom, which allowed them to establish curate “pop-up” shops nationwide.Though not all DTC brands will be able to achieve that scale, many should seek to understand their customer needs and where relevant, experiment with pop-ups and activations.
A further benchmark is Caspar (a US e-commerce company which sells sleep products online) which has opened its first ‘nap showroom’ in New York City, called The Dreamery. These sensorial experiences (which may support new product launches), are especially designed to be shared on social – across owned and earned media channels. With studies indicating 1 in every 3 brands struggle to integrate their media and non-media touch points, strategic focus must shift to breaking down silos to build ecosystems which connect immediate and long-term customer engagement objectives.
Privacy, Platforms and Parliament
The recent ACCC Digital Platforms inquiry impacts not only large digital publishers, but also brands collecting or using personal information in any way. In particular, recommendation 16 of the ACCC Digital Platform enquiry recommends to ‘update the definition of ‘personal information’ in the Privacy Act to clarify that it captures technical data such as IP addresses, device identifiers, location data, and any other online identifiers that may be used identify an individual.’ Consent and approval to use customer data will become more policed and regulated. This means that any settings for data practices relying on consent must be pre-selected to ‘off’ and that different purposes of data collection, use or disclosure must not be bundled.
Plainly speaking, an outcome (if the recommendations are passed into law) would be the ease for the regulator to investigate smaller brands and their use of data – rather than global publishing platforms (i.e. Google, Facebook etc). Accordingly, brands (and their partner agencies) must be diligent as well as transparent in their compliance around data collection, use and sharing.
An important value at Foresight Digital is that of integrity. Behaving with integrity influences how we engage with our clients and how we encourage our clients to engage with their own customers. A new decade, more than ever, presents an opportunity for brands to create real change and impact improvements within society.
As societies continue to question their governance (think of the recent political movements across Hong Kong, The United States, the influence of activists such as Greta Thunberg (and closer to home, the political hot-potato Australia’s bushfire season has become, with thousands of students protesting Government reaction across the country), an emerging trend for individuals is to lead the way in advocacy- meaning that brands are also expected to articulate and communicate their principles or guiding values to their customers.
Research indicates that 90% of consumers believe brands should be immersed in topical, social issues. When taking a stand and seeking the attention of its customers, brands must not only be transparent in why they are doing so- but also place due consideration on where this occurs. Given 60% of consumers still consider communications about an organisation’s activism as ‘inauthentic brand advertising’, brands should be mindful of content and context, particularly across social media platforms where any engagement is immediately shareable (with the potential for viral backlash).
There exists an opportunity for agencies to work more closely with brands to ensure greater consistency between what a brand stands for, and how they are communicating and staging that stance. Important questions will need to be addressed, including how brands demonstrate putting their own values into practice, and what the media context they advertise in, communicates about these values.
To be seen as authentic (thus meeting the expectations of, and continuing to engage its socially aware customers), a brand must ensure it is living and breathing its purpose throughout the value chain whilst being transparent about its true north.
Our philosophy on value through strategy
We understand that your time and attention is limited, especially given you’re often operating within fast paced, growth focussed and highly competitive industries. As a result our philosophy toward the value of strategy, synthesises to over arching principles across key areas.
Solutions: You come to us to solve business problems through marketing and communications solutions.
The solution is irrelevant if we can’t define (and agree with our clients upon) the problem we’re trying to solve.
Marketing: When it comes to measuring our success at creating value to your organisation, proving our effectiveness is paramount to your engagement, happiness and a lasting relationship.
We focus on qualifying and quantifying the value of our marketing outcomes toward your organisational outcomes.
Customers: The key to success is a deep and meaningful understanding of human behaviour and decision-making.
Only by helping the brands we partner with, to understand their customers, can we deploy marketing activity to influence the decision-making journey and turn solutions into business value.
Brands: We understand that most people don’t care about most brands. We understand that the value we provide you is in making people take notice of your brand – by doing all we can to make our marketing solutions awesome.
Our commit to you is that we shall be bold, creative and original in our solutions to make heads turn, notice their brand and create meaningful connections.
Data: In this advanced age of digital marketing, data is available at almost every touch point.
Despite the abundance of available data, the only measure for the value of data are the insights they provide in unlocking business value.
Strategy: Strategy is about focussing on a few key objectives amongst the clutter of intentions, therefore synthesising the complex into the simple. There’s nothing clever about an overtly complicated or long-winded strategy. If it’s confusing, we understand that it won’t gain traction with you or your stakeholders.
If we can’t explain a strategy and its objective to our grandmothers, then we’ll continue to reframe it, until we can.
Failure: Failure is how we all learn and evolve. Without failure there would be no innovation. So, we believe in being brave and taking calculated, data informed risks to make informed decisions. We believe in the motto “fail fast, fail often and fail forward in the interests of our clients… because one of our failures will yield tomorrow’s unicorn.”
Failure is a friend, not foe.
We hope that you’ve found value in the above observations, as well as our approach to strategy. The team at Foresight Digital is incredibly energised and looking forward to continuing our partnership into 2020.
6. Take a multi-dimensional view of marketing analytics
Please don’t hesitate to get in touch if you’d like to be taken through the above in detail, unpack any supporting research or to catch up. We look forward to speaking with you and your team in the coming weeks.
Check out more articles about: