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Published: February 24, 2009

 
 

Digital Darwinism

It’s one thing to collect digital information; it’s quite another to draw intelligence from it. Leading marketers are building partnerships with digital agencies, traditional media agencies, and media companies to track ad placement, versioning, and effectiveness. And marketers, agencies, and media companies alike are hiring “quant jocks.” Nearly a quarter of marketers surveyed are adding positions in marketing and media analysis and fishing from a new talent pool of digitally savvy mathematicians, engineers, and computer scientists.

But they are unlikely to succeed unless they can learn to collaborate on a recognized set of metrics. Carolyn Everson, chief operating officer for ad sales at MTV Networks, notes, “New digital platforms generate a ton of data, but we haven’t yet cracked the code in developing universal measures of success across both traditional and new media. For marketers to plan, mea­sure, and optimize audiences, metrics require standardization. For example: How will we track audiences across multiple platforms? What is the value of cross-platform reach and engagement? We are constantly working with clients to address these questions.”

The principal hurdle in the development of a universal standard appears to be lack of cooperation. Six out of 10 agencies in our study reported that marketers’ unwillingness to share objectives or targets inhibits their ability to measure effectiveness, and nearly half indicated that marketers are using old methods of measuring success that do not include digital media. Three-quarters of media companies want to better understand what marketers want to measure; the relevance of metrics can vary by industry and sometimes even by brand.

Although greater standardization will come with time, marketing and media ecosystem players will retain much metric heterogeneity for the foreseeable future. If they want scorecards, they will have to create their own. MTV, for example, developed a proprietary planning tool called T-ROI, which helps marketers assess the total return on their investment in MTV’s media properties. Leading marketers are already looking beyond such popular allocation tools as historical spending adjustments and marketing mix modeling and are incorporating new tools, such as targeting based on consumer behavior, database marketing, Web analytics, and predictive modeling, in planning their media activities. These are the companies that stand the best chance of “torturing the data until it confesses,” as Paul Price, global president of ad agency Rapp Collins, puts it.

Collaboration is king. The marketer–agency–media chain used to be simple and straightforward. Now, that linear model has morphed into a spiderweb of overlapping connections and interdependencies. In a more complex marketing ecosystem, where marketers want best-of-breed ideas and execution, everyone needs to develop partnering skills to get things done and access new sources of data.

Marketers are partnering directly with media companies, specialty agencies are multiplying, large agencies are diversifying their portfolios, and media companies are expanding the depth and breadth of their services. This erosion of boundaries has hardly been free from tension, but it has compelled companies to move in important new directions. As an example, WPP Group PLC, parent company of numerous marketing and advertising agencies, is jointly funding research on the efficacy of online marketing with Google — a company that WPP CEO Martin Sorrell famously characterized as a “frenemy.” WPP rival Publicis Groupe SA has also entered into partnerships with Google as well as Microsoft, Yahoo, and AOL to support its open source ad network, dubbed VivaKi. Publicis and Google are also working together on various mobile advertising initiatives.

Marketers, ad agencies, and media companies need to partner in conceiving, executing, and monitoring winning marketing strategies. Various models will emerge that are tailored to the unique dynamics of the company–consumer relationship, but the dominant model is likely to be led by marketers.

 
 
 
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Resources

  1. Booz & Company, “Marketing & Media Ecosystem 2010: ANA Annual Meeting CMO Roundtable (PDF),” October 2008: Presentation detailing the survey data.
  2. Matthew Egol and Christopher Vollmer, “Major Media in the Shopping Aisle,” s+b, Winter 2008: Overview of new marketing initiatives in retail locations showing how one corner of the ecosystem is being transformed.
  3. Leslie H. Moeller and Edward C. Landry, with Theodore Kinni, The Four Pillars of Profit-Driven Marketing: How to Maximize Creativity, Accountability, and ROI (McGraw-Hill, 2009): Detailed guide to practices and organizational processes needed to implement marketing metrics and increase accountability for marketing spend.
  4. Christopher Vollmer, with Geoffrey Precourt, Always On: Advertising, Marketing, and Media in an Era of Consumer Control (McGraw-Hill, 2008): How the digital age has reshaped all marketing imperatives and the industry as well.
  5. HP advertising campaign (video)
  6. Nike Web site: Online community for runners that gives Nike key insights into that target market.
  7. For more articles on marketing and sales, sign up for s+b’s RSS feed.
 
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