As today's empowered consumers take charge of the buying process, brand reputations and engagement at all levels, marketers and IT professionals are starting to recognize the need to better align their efforts to promote and protect their business. How are they doing this? By delivering relevant digital conversation and a high-quality online experience that cut through the digital noise and compel their customers to act. This white paper analyzes how empowered consumers came to be, discusses why it's essential for marketing and IT to collaborate to meet consumers' needs and offers best practices for how organizations can build an effective digital marketing and IT engine.
New Technology Trends Empower Consumers
There was a time when commerce was a mostly physical endeavor. People would hear about a new product on the radio or read an advertisement in the paper, prompting them to visit a store where they could inspect the product for themselves and have a conversation with a sales associate about its benefits. If they felt the product met their needs and was a good value, they would purchase it with cash pulled from their wallets or purses. Then, perhaps a few days after using the product, they might recommend it to a neighbor while chatting over the fence.
Today, technology has forever changed how consumers research, purchase and converse about products and services – and the numbers prove it:
- 77 percent of populations in developed countries are Internet users today, up from 51 percent in 2005.1
- Average smartphone usage grew 81 percent and global mobile data traffic grew 70 percent in 2012.2
- U.S. online retail sales will reach $370 billion by 2017 – a 10 percent compound annual growth rate.3
- Social networks account for 20 percent of time spent online.4
The rise of the Internet, smartphones, tablets and social media has empowered customers to be able to shop how, when and where they want. Today's customers are also more informed, and not by the traditional method of reading official company documentation or trusting a salesperson. They are sharing information with each other via reviews, social networks and mobile devices. In effect, they've moved a large portion of their previously physical shopping experience into the online realm.
Consumers Go Online
So consumers have moved online. How have their behaviors and activities changed since this transition occurred?
Taking the example from above, consumers are now alerted to new products or services through direct emails or Facebook posts, which they can click to immediately acquire more information. Once at the product's site, they can read user reviews, learn about similar items customers have viewed and even post to their social media venue of choice automatically after executing the purchase — and they can do all of this from a single device.
And when consumers make the decision to go to a brick-and-mortar store, they typically bring their smart devices along so they can "hybrid shop" by browsing in person, then checking reviews and competitive offerings online. In addition, consumers can take pictures of products and get immediate feedback from friends while shopping.
From a business perspective, this embrace of e-commerce by consumers means that they are educating themselves on products and services without the aid of a salesperson — effectively entering the sales cycle at a later stage than many organizations are used to.
What's more, the use of apps and social media to communicate about these products means that consumers have much more control over how a brand is perceived. In fact, because they have the ability to review products and post their experiences for the online world to see, they are driving discussions with which the brand in question may not even be involved. This means organizations must be better than ever at delivering on their brand's promise and meeting customers' expectations.
Marketing Investments Follow the Consumers Online
As consumers have moved much of their commercial activity online, marketing professionals have followed suit, investing in such technologies and tactics as dynamic web sites, search engine optimization (SEO), online ads and marketing-automation tools with the hopes of delivering personalized, relevant messages and experiences to their audience.
It's no secret that online marketing has been growing at an exponential rate. For example, one-third of respondents to a survey conducted by the Society of Digital Agencies (SoDA) projected digital channels to make up 60 percent or more of their marketing budgets, which was up from 31 percent in 2011.5 IDC also predicts that the marketing automation market will grow to $4.8 billion by 2015.6
In addition to investing in IT solutions that help them promote their businesses online, marketers are hiring analytics experts to intimately understand the digital footprint of their audiences and make recommendations for how they can optimize their programs to better engage with those audiences. Why is this important? Because as more and more sales and marketing activity moves online, it becomes harder and harder for organizations to target their customers in this "digital maze."
It's been established that people are spending more time online. Studies show that while daily time spent with such media as TV, radio, newspapers and magazines has trended downward, Internet usage continues to grow, with U.S. consumers spending a daily average of 3:07 online in 2012.7 It's also clear that larger portions of marketing budgets are moving online. According to the SoDA Digital Marketing Outlook Report 2013, 39 percent of organizations are increasing their digital marketing budgets without increasing overall marketing spend (i.e., reallocating existing budget into digital).8
So the people are online, the marketing is online, but it's easy for them to miss each other in the digital maze. In order to avoid this, today's marketers need to leverage tools and technologies that characterize audiences based on specific factors (e.g., market, IP address, device, etc.) and deliver content that is personalized for each specific customer. For example, a US clothing retailer would want online ads to display swimsuits for users in Florida and heavy jackets for users in Alaska. Coordination between IT and Marketing is a key component in supporting this level of personalization.
Effective Digital Marketing Requires a Partnership with Digital IT
Today's marketers have found that while reaching an audience online is important, it's really only half of the battle. The other half is being able to provide a compelling, high-performance online experience that keeps customers engaged after they've been found.
For example, today's consumers have been conditioned to expect an online experience that is responsive, easy to navigate, provides relevant and interesting content and is optimized for viewing on the device they're currently using. In order to provide this kind of experience, digital marketers have to rely on their IT teams' ability to create an infrastructure that can support it.
It stands to reason, then, that digital marketing and digital IT must enter into a symbiotic relationship where each party supports the work done by the other. After all, personalized content will not be able to reach an audience if it is hosted on an unresponsive portal — just as the most dynamic sites will ring hollow if the messages on them miss the mark.
How concerned are you over bad customer experience with your website or mobile app?
Both IT and Marketing have common concerns in recognizing the risks in bad website and application user experiences thus making the gulf between them all the more important to bridge.
That said, IT's role in supporting personalized online marketing cannot begin and end with the customer experience alone. As commerce has increasingly moved online, so too have threats from malicious hackers hoping to get a piece of the online pie. Therefore, it's just as important for IT to protect the business from the risks of today's advanced attacks.
The Performance and Security Challenges of Marketing Online
One of the downsides of consumers, marketers and IT professionals taking their business into the online realm is that hackers, "hacktivists" and other digital troublemakers have followed — and brought a wide variety of attacks and threats with them. As a result, it has become just as important for businesses to protect their online experience as it was to create an engaging, high-performance experience in the first place.
For example, distributed denial-of-service (DDoS) attacks — which attempt to render a web service unavailable by saturating it with fraudulent communication requests so it cannot respond to legitimate traffic — continue to grow in frequency and impact. According to Neustar research, 35 percent of surveyed companies experienced a DDoS attack in 2012.9
One of the scary realities behind this number is that many organizations do not have processes in place to enable quick reaction to a DDoS attack. In fact, a recent survey by IDG Research Services shows that it can take organizations up to 4.6 hours to become aware of a DDoS attack, and then an additional 4.9 hours to begin problem resolution. With an estimated $100,000 at stake for every hour of a website outage, these organizations could forfeit more than a million dollars in revenue if they experienced a DDoS attack.10
Beyond immediate loss of revenue, DDoS attacks impact businesses in ways that are difficult to measure — namely erosion of brand value, reputation and customer trust. For example, in a social-media landscape where consumers share their experiences with innumerable followers and forum members, a single purchase response error or security breach can create an unpredictable ripple effect that damages a brand across many channels for an extended period of time.
DDoS and other attacks aside, there is also the issue of online fraud, during which criminals might leverage phishing-related stolen credentials or click fraud to obtain illicit funds or goods. In order to counteract this, IT must have access to geo-location tools that monitor geographic data, analyze IP addresses, determine IP routing types and identify Internet connections to confirm or deny credentials in real time. This way, customers can feel more secure about shopping on an organization's site, while the business protects itself from the revenue loss, damaged reputation and other risks that go along with an attack.
Best Practices for Building an Effective Digital Marketing and IT Engine
In charting the evolution from a traditional buying, selling and marketing experience where prospects are guided from point to point in the sales cycle to the more dynamic, online-driven, hybrid shopping experience where customers are in the driver's seat, this white paper has argued that marketing and IT teams must enter into a symbiotic relationship where the actions of each party bolsters the capabilities of the other.
The question is, how does an organization go about effecting such a dramatic culture shift, when IT and Marketing have often seen themselves as adversaries? The answer lies in rethinking each group’s priorities across the "Delivery > Campaigns > Results" lifecycle that constitutes the heart of any digital marketing and IT engine.
How important is enabling greater customer interactions and engagement with your company via a mobile application?
Serious differences begin to show in the U.S. with Marketing showing a clear majority emphasis on the need for customer engagement via a mobile application.
Think of delivery as any and all infrastructure components that support business operations. In most organizations today, IT has a high level of interest in this area because it includes the hardware, software and services the group is responsible for managing on a day-to-day basis. Marketing, on the other hand, usually has little to no interest in how services are delivered — as long as they are delivered. Or, if the marketing group has interest in delivery, it might be insofar as it can go rogue behind IT's back and source a solution itself.
In an effective digital marketing and IT engine, Marketing must have an increased interest and investment in delivery activities and the infrastructure needed to support them. Think of recent success stories, such as Best Buy and Lowes, who have seen sales grow as they've incorporated mobility integration and loyalty programs to blend the in-store and online shopping experience. In both cases, innovative marketing ideas are supported by new infrastructure delivered by IT.
Obviously, campaigns exist right in the center of Marketing's wheelhouse, so the group has a high level of investment in this step of the lifecycle. IT, on the other hand, is often so busy with "keeping the lights on," that it easily loses sight of whether existing infrastructure and services are adequately supporting campaigns.
As the online fight for customers gets more challenging and consumer expectations continue to grow, IT must be more involved to ensure it is providing the necessary infrastructure and services — especially as they become more sophisticated and integrate popular technologies, such as cloud, mobility, big data and more. For example, IT should be able to load test and make sure sites can handle anticipated traffic, as well as better understand demographics and traffic patterns, so it can adjust for them prior to initiating campaigns.
In many organizations today, IT's level of interest in campaign results mirrors that of their interest in the campaigns themselves. While the group may care about purely operational metrics, such as uptime, availability and help-desk calls, other numbers, such as click-throughs, downloads, budgets and ROI, are often not seen as important. On the other hand, Marketing cares deeply about the latter numbers because that is how the group's success is measured by the business.
In the future, IT and Marketing need to be equally invested in campaign results, because the information they glean from them can be fed back into the lifecycle to create an improvement loop that increases the success of the digital marketing and IT engine. For example, if a new cloud service not only increased customer engagement with a campaign, but also reduced costs and increased ROI, IT should recommend that it be used to support other campaigns — and be ready to test and augment the service based on the resultant infrastructure demands.
Driving Innovation With The Improvement Loop
When Marketing and IT review results together, they can learn from them, incorporate their successes back into the campaign lifecycle and continually refine and evolve approaches based on what resonates the best with customers. In addition to enhanced business results, the output of such an improvement loop is often the creation of innovative, new products and services.
Why is innovation so important? Because according to the latest industry trends, many corporate profits are running flat.11 Companies have done most of the cost cutting they can, and the "do more with less" card is getting played out. What they really need to ensure competitive advantage is new sources of growth, and innovation, combined with better marketing and delivery of IT services, is where this growth will come from.
On average, 32 percent of annual revenue for modern businesses comes from website transactions.12 This means online sales have transitioned from being modest revenue contributions to a dependency for business success going forward. Since that shift occurred, it has become even more imperative to have IT and Marketing working together and invested heavily in the online area of the business.
Measuring Success with Key Business Metrics
In today's fast-moving, ultra-competitive online business landscape, it's possible that there is no such thing as an existing customer. Businesses are only as good as the last positive experience a customer had with them — which means the slightest shopping-cart delay or page-load failure has the potential to drive customers to look for products and services elsewhere.
One way to ensure the digital marketing and IT engine is meeting customers' requirements is to track and report on measurable business metrics — and use that information to implement changes as appropriate. Below is a list of key metrics to monitor, organized by the relevant stage in the campaign lifecycle.
|Measurable Business Metrics|
A Digital Marketing and IT Maturity Curve
As businesses consider how the best-practice recommendations and business metrics discussed above can be applied within their own marketing and IT organizations, it’s important that they begin with a self assessment that not only gauges the current level of integration between Marketing and IT, but also provides an idea of how far they need to go. In order to help them expedite this process, Neustar has defined a three-stage maturity curve organizations can use to see where they are in their journey to building an effective digital marketing and IT engine.
Stage 1: Siloed Operations
As the name implies, stage 1 is characterized by Marketing and IT operating in silos. Each department has its own budget and goals, acquires and leverages its own tools and monitors only the KPIs that it believes are important to its own operations. With little synergy and alignment between the two groups, the business suffers from inefficient and unproductive delivery of the new messages, services and security capabilities required to ensure a positive online experience for the customer.
To illustrate, consider how a stage-1 organization might react to a DDoS attack or some other event that severely impacts the customer experience. As IT works in a vacuum to find and remediate the issue, Marketing scrambles to pull together a statement it can provide to customers, the press and other interested parties about what happened and how it will be fixed. The lack of alignment between departments creates a chaotic environment that can lead to extended downtime and loss of customer confidence.
Stage 2: Project-Oriented Collaboration
Organizations in stage 2 do see some collaboration between Marketing and IT, but only on a project-by-project basis. For example, the marketing group may realize that it needs a more fully featured shopping cart on the website, so it works with IT to define the project scope, agree to the funding and potentially pick a vendor if third- party tools are required. Once the shopping cart has been implemented, each team goes back to its individual projects and monitors the relevant KPIs (e.g., online revenue growth for Marketing; script errors and error rates for IT).
In the case of a DDoS or other attack, stage-2 organizations are better positioned to react, but Marketing and IT still operate independently. A lack of structure and true alignment slows them down as questions bounce back and forth (e.g., “When is the site coming back up,” “Who is letting customers know about the situation,”etc.). While the two groups are working together to solve the problem, there is still a significant amount of scrambling that occurs, which reduces the efficiency of communication and remediation activities.
Stage 3: Total Business Alignment
In stage 3, Marketing and IT work together toward a shared business goal, and they measure their success against the same KPIs, including those focused on new customer acquisition, the customer experience, performance and availability, user behavior, abandonment rates and more. The groups then use this to feed the improvement loop discussed above — and create innovative new services and functionality that help establish an online shopping experience that grows the business.
If and when crises occur, organizations in stage 3 are able to react to them in real time because they are already operating in a joint alignment manner. This means they waste little time mobilizing resources; customers, investors, press and other interested parties are quickly made aware of the situation and given a timeline for remediation, and swift action is taken to identify, isolate and mitigate the problem so its impact is minimized. Stage-3 organizations also learn from these crises, taking action to ensure they will not occur again in the future.
Neustar Helps Organizations Promote and Protect Their Business
As a trusted, neutral provider of real-time information and analysis to leading businesses throughout the world, Neustar applies advanced, secure technologies in location, identification and evaluation to our customers' data to help them promote their businesses and protect them from fraud and cyber-security threats.
Promote The Business
As today's organizations focus more on web and mobile advertising, they need to do three things faster and better than ever: identify, locate and evaluate customers. With real-time data and analysis, Neustar helps them:
- Identify customers most likely to convert
- Score leads in real time
- Help buyers find locations faster
- Reach niche audiences with personalized display ads
- Personalize web content to increase buyer engagement
- Identify inbound customers and offer the best up-sells
- Reach online audiences with precision
Protect The Business
Every second counts when customers reach out to an online business. In fact, a delay of just 0.25 seconds can make the difference between a click- through and a bounce. Neustar helps businesses protect both the customer experience and their network with services that:
- Defend against DDoS attacks
- Eliminate slow performance
- Prepare websites for heavy traffic
- Protect margins by optimizing the communications network
- Control the use of digital media
- Reduce online fraud
With industry-leading services that help organizations promote and protect their online business, Neustar is the fuel that powers today's digital marketing and IT engines. For more information about Neustar, please visit neustar.com.
1. International Telecommunications Union. "Key ICT indicators for developed and developing countries and the world (totals and penetration rates)." 2013.
2. Cisco. "Cisco Visual Networking Index: Global Mobile Data Traffic Forecast Update, 2012–2017." 2013.
3. Forrester. "US Online Retail Forecast, 2012 To 2017." 2013.
4. ComScore. "It’s a Social World: Top 10 NeedVtoVKnows About Social Networking and Where It’s Headed." 2011.
5. Society of Digital Agencies. "The SoDA Report: Q1 2012 Digital Marketing Outlook." 2012.
6. IDC. 2012.
7. eMarketer. "Social, Digital Video Drive Further Growth in Time Spent Online." 2013.
8. Society of Digital Agencies. "SoDA Digital Marketing Outlook Report." 2013.
9. Neustar. "Hope Is Not a Strategy: 2012 Annual DDoS Attack and Impact Survey: A YearVtoVYear Analysis." 2013.
10. IDG Research Services. “Market Pulse: Protecting Your Online/eCommerce Presence.” Research conducted on behalf of Neustar. 2013.
11. Hall, David. “The Morning Ledger: Cost Cuts May Be Losing Their Punch.” The Wall Street Journal. 2013.
12. InfoWorld and Neustar. “Market Pulse Research Study: Website Performance Monitoring and the User Experience.” 2013.