Back in March, I wrote a column called “Digital Is a Philosophy” to introduce the concept. Over the subsequent months, clients and students have asked me about how to make that philosophy real and actually implement it. So I have paraphrased a few questions and collected some of my responses together below.
1. What does “Digital Is a Philosophy” mean? Historically, we defined “digital” as the online channel or online marketing tactics. This was fine. But because of it, marketers have distinguished between it and the offline channel and between digital tactics and traditional advertising tactics. “Digital” has always been the “poor stepchild” to traditional brand advertising in terms of the large disparity in the funds allocated; most large advertisers still spend the vast majority of their marketing dollars in “traditional” ways (see “The Grand Digital Canyon“).
“Digital Is a Philosophy” means that instead of thinking of digital as the channel, we think of it as a set of guiding principles that can help make all advertising and marketing better, no matter if they are offline or online. These insights are derived from modern users’ needs, habits, and expectations, as evidenced by their actions in digital channels. Users are empowered with information; they have access to information at all times; and they can consult peers and independent experts to inform their own purchase decisions. In this way, the balance of power has drastically shifted away from the advertiser to the would-be customer. These changes necessitate changes to the way advertising is done – “push” ads no longer work and are no longer tolerated by users. They “pull” for the information when they want it. So by defining “digital” differently – not as the online channel but as a “philosophy” – we can use the insights and guiding principles to make all advertising better.
2. A top digital challenge is measurement and ROI. How does this philosophy help? Digital is inherently and beautifully measurable. Compared to the one-way forms of media such as TV, print, and radio, digital provides instant feedback loops – like when people click on a banner ad, type in a search, or share something on social networks. There are lots more things to measure and these metrics are based on what users actually do. This contrasts with the metrics of traditional advertising, which have to do with how far and wide the ad was supposedly broadcast – i.e., “reach and frequency.” “Digital Is a Philosophy” implies a focus on the user and the actions they take, especially in relation to advertisers’ ads or marketing activities. For example, do users actually go online to search for more information after they get inspired by a TV ad? Do they actually buy something? Do they tell their friends about a product they love? These are all detectable in digital channels.
These metrics also correlate to return on investment (ROI). They may not necessarily be able to specify exact, absolute ROI, but they can provide relative ROI. Did one marketing activity drive more of the desired consumer actions than another? If so, it delivered better relative ROI. These metrics are also what I would call “hard” metrics – e.g., clicks, click-through rates, number of visits to the website, etc. – versus “soft” metrics – e.g., brand favorability or perception. These metrics can be the unifying way to gauge the effectiveness of marketing tactics no matter online or offline because modern users will go online to do additional research no matter what ad or channel inspired them to do so. Digital is a philosophy means a focus on user actions and these actions are the metrics that can be used to gauge the relative ROI of marketing activities across all channels.
3. How do we convince “finance” to shift more dollars to “digital”? Finance will obviously be focused on ROI and metrics. The key is to introduce a new set of metrics, like we said above, and show how they correlate to business impact and ROI. In the past, it was sufficient to cite just reach and frequency because if the ad got shown to more people more often, there usually was a lift in sales. However, today, due to oversaturation of ads and modern users ignoring all “interruption media,” just showing the ads more frequently does not necessarily translate into any business impact (see “Facebook Ad Metrics and Benchmarks“). However, if we focus on the actions of the users – e.g., did they go search for more information about your product after seeing an ad – then we can draw a much more direct correlation between the marketing activity and the potential business impact – users going to make the purchase. And we can compare the relative impact of various marketing tactics, no matter what channel. Once we can compare the impact of various marketing tactics in an apples-to-apple way, finance will easily be able to shift spend among the tactics to the ones that are driving the greatest ROI.
4. We’ve got a lot of “digital” activities already going on. But they don’t seem to work together and we’re not really seeing noticeable results yet. What do we do? The other benefit of “Digital Is a Philosophy” is that you can now look across all tactics and all channels and compare their relative business impact and ROI based on the common metric of user actions. It also implies a focus on the needs of the customer – what information do they need, what are they searching for, where are they getting the information they need, etc. These needs (see “Missing Link Marketing“) are also readily revealed through their actions in digital channels. For example, are the customers not aware of the product or service? In most cases, they are aware. There is something else further down the purchase funnel that is keeping them from moving all the way down to the purchase. Once these “missing links” have been determined, the advertiser can plot these needs on the Unified Marketing framework and also plot their marketing activities. This will reveal whether there are redundant marketing activities or whether there are gaps and opportunities. In this way, when you look across all marketing tactics and channels and have a way to not only determine what activities are needed, what are redundant, and also which are most impactful, you will have a way to synergize your marketing activities and optimize until you see noticeable impact.