Note: This article was originally published by Booz & Company.
Look at virtually any consumer industry and you’ll see how changes in digital technology are fundamentally altering the way that consumers engage with brands before, during, and after a purchase. Consumers today expect to browse, research, solicit feedback, evaluate, and push the “buy” button at their own pace, and at the time and place—and via the platform—of their choosing. Consumers also continue to engage with brands online after a purchase and to share experiences with one another. Much of this consumer journey is beyond the direct control of companies, and marketing organizations are sprinting merely to keep pace.
The good news for chief marketing officers (CMOs) is that digital marketing can offer detailed data on and analysis of consumer behavior, as well as precise results about a marketing program’s effectiveness, with a degree of detail and precision that previous generations of CMOs could hardly fathom. The challenge is that these new technologies and consumer behaviors are raising the requirements for what will succeed in the market. Building powerful consumer experiences requires brands to operate outside their comfort zone; for example, they must work with much shorter cycle times, with more rapid and frequent iterations, and through a broader vendor ecosystem than the traditional advertising agency process.
In addition, consumers increasingly demand marketing messages and offers that are highly personalized, relevant, and targeted. Miss the mark, and you risk losing them forever. In that regard, digital marketing offers both greater rewards (in terms of higher engagement and ROI) and greater risk (due to the execution complexity and the need for behavioral changes across the organization).
In this environment, CMOs know they need new capabilities to succeed. In a recent survey of more than 300 CMOs in the U.S. that Booz & Company conducted with the Association of National Advertisers and Korn/Ferry, 72 percent said that building capabilities in the area of digital marketing is vital. The difficulty is that there’s no one set of capabilities that applies universally. Companies must identify what kind of marketing organization they need to make their strategy a success, choose a digital marketing model based on their strategic objectives, and then focus on developing a handful of marketing capabilities that will allow them to bring that model to life and consistently excel.
Four New Digital Marketing Models
Booz & Company has identified four equally successful digital marketing models: Digital Branders, Customer Experience Designers, Demand Generators, and Product Innovators. A company’s focus for marketing investment might have elements of each, but odds are that one of these models represents the right marketing organization for your company.
Digital Branders are most often consumer products companies or other marketers that focus on building and renewing brand equity and deeper consumer engagement. These companies are shifting their investment from traditional linear advertising toward more immersive digital multimedia experiences that can connect consumers to the brand in new ways. They are reimagining how they engage consumers with the primary goal of recruiting new consumers to the brand and driving loyalty through multiple experiences with the brand.
Customer Experience Designers use customer data and insights to create a superior end-to-end brand experience for their customers. Typically, these companies (such as financial-services companies, airlines, hotels, and retailers) build their business models around customer service. By reinventing how they interact with customers, and wowing them at multiple touch points, these companies hope to create an ongoing dialogue and build a loyal customer base.
Demand Generators (typically retailers) focus on driving online traffic and converting as many sales as possible across channels to maximize marketing efficiency and grow their share of wallet. All elements of the digital marketing strategy—website design, search engine optimization, mobile connected apps, and engagement in social communities—are tailored to boost sales and increase loyalty. Although Demand Generators also need to leverage content to drive engagement, they are more focused on driving volume and efficiency than on curating the deep, emotional branded experiences that Digital Branders pursue.
- Product Innovators use digital marketing to help the organization identify, develop, and roll out new digital products and services. These companies employ digital interactions with consumers primarily to rapidly gather insights that can help shape the innovation pipeline. By helping nurture new sources of revenue, the marketing group directly increases the value of the company.