Jul 12, 2016
Digital marketing is a trillion-dollar world, so huge that traditional marketing can easily be forgotten. Within the next two years, we're likely to see booms in marketing-as-a-service, cognitive marketing, digital post-purchase marketing, and many other cutting-edge developments in digital marketing. When was the last time you heard a new buzzword about traditional marketing?
Well, you might have heard one. Convergence. More specifically the convergence between digital marketing and traditional marketing. Gartner, the market research firm, predicted back in 2012 that by 2017, a CMO would spend more on technology than the CIO. That seems to be on track according to this infographic on technology spending.
As marketing analytics continues to bring forth new conclusions, companies are scrambling to keep up with the pace of new innovations. We are going to witness a flowering of strange and new business models with these changes. But what is driving all the innovation in the first place?
The short answer is data. With the help of digital data gathering techniques and analytics, marketers can track many different consumer behavior variables at many different stages of the sales funnel. There's so much customer data coming in that we even coined a whole industry, Big Data, to talk about it! Compared to the torrent of consumer data coming in, traditional customer service calls and surveys seem paltry in comparison.
Data allows us to make better predictions and creates new models of customer behavior for different niches. Even something as simple as changing colors on a web page can lead to an uptick in conversions. That sort of testing would have been very expensive if done with printed collateral. Marketers can constantly tweak their messages and get data on how well they worked to make bold experiments without risking too much of the budget.
Data also allows marketers to prove to upper-level management and the c-suite that a particular strategy is getting good ROI. Before the advent of data (sometimes in real time), there was a lot of guesswork when trying out new strategies. Information had to be re-evaluated every time a generational shift occurred. Now we have data to back up our gut feelings.
Good marketing data backed by solid sales figures is hard to argue against, and it is shaking up entire business models as a result. And for smaller companies that do not have the budget for traditional marketing campaigns, digital marketing is a cheap way to allow them to gain mind share, along with a host of other benefits.
Does this mean traditional marketing is dead! Not by a long shot. The old techniques of print, television, and radio haven't stopped working entirely just because we're buried in our smartphones all day. Completely dumping traditional marketing collateral would be a radical change. It just has to be reinterpreted for a Big Data world.
Big Data is where the convergence happens between traditional and online marketing happens. The medium doesn't matter so much so long as marketers can gather the necessary data to measure the effectiveness of the message. In short, convergence turns traditional marketing into another set of data points to be collected.
One example of a convergence between online and offline marketing is American discount retailer Target. Target, like many companies, builds customer profiles over time based on Big Data. These profiles start when they get an email address or a credit card number. By comparing profiles among the thousands of Target customers, predictions can be made about what will be purchased next.
One of the big demographics big box stores like Target want to grab are soon-to-be parents. New parents spend a fortune on new baby products, and Target noticed a trend in specific purchases as a due date got closer. Their statisticians got so good at predicting pregnancies that Target was able to send specific coupons right when those critical stages came.
However, there was some backlash after a story was printed. Turns out people don't like it when they're tracked that closely. But after further experimentation, they found that if you sprinkle in the coupons with valuable, education content rather than simply blasting people with printed fliers, pregnant women still used them. Striking this right balance between traditional and digital marketing is one of the challenges that businesses are facing.
But the balance is shifting toward the marketer's favor due to some interesting changes in how consumers are changing their buying patterns thanks to new shopping technologies.
If leveraging big data is what draws marketers to convergence, consumers see its attractiveness in improving information quality about brands and products, as well as speed of transactions. Put another way, customers are losing their patience.
A statistic that is often quoted is that the human attention span has decreased to around 8 seconds. It appears to be based on faulty data, but there is definitely a decrease in how much we're willing to pay attention. But it's not due to a decrease in attention span. What's really happening is that we're becoming more impatient!
Nearly 50% of people abandon webpages that load slower than 3 seconds. We're not willing to wait, and it has become so prevalent that Google penalizes websites that don’t load fast enough. This growing impatience is a side-effect of the instant gratification that high-speed internet provides us. We want our experiences and information and we want them very quickly.
Paradoxically, traditional marketing can teach digital marketing about how to convey a lot of information economically. It's expensive to buy air time or to print collateral, so traditional marketers have gotten very good at delivering messages fast. TV ads are rarely longer than 30 seconds. The layout on supermarket circulars has a particular pattern so people can quickly find deals. Even a long-form direct marketing letter doesn't take longer than 10 minutes to read, which is closer to our actual attention span.
When a consumer looks at an item in a brick-and-mortar store then goes online to purchase that item at a better price, that’s known as showrooming. Some people have used showrooming as an example that the brick-and-mortar store is doomed. Showrooming actually works in both directions. People may learn about a product online and do all their research there, then go to a brick-and-mortar store to make a final purchase decision.
And this makes sense. Some products are purchased based on physical characteristics that can't be communicated through pictures, video, or words. Other products are the same no matter where you buy them, like computer parts or books.
For the consumer, it doesn't matter whether they are buying online or offline, but they want to be able to interact with brands in both spaces with as little friction as possible. This is convergence in a nutshell. This ability to cross the streams is something that companies will need to learn. According to a report done by First Data, a third of the customers they researched desired a seamless shopping experience on any device at any time and 83% of them said they wanted companies to do a better job of converging online and offline experiences. A seamless shopping experience is code for “we want it now with as little friction as possible.
The impatience we have for slow page load times is boiling over into the physical world. If we put in data on a website we expect that data to follow us to offline transactions with the same brand, and vice versa. Thanks to the big data revolution, companies and marketers have a lot of tools available to help them do this. Even SMBs can get in on the action. Companies that learn to master the new tools will have a huge advantage as our world becomes more and more digitally oriented.
Some may decry the lack of patience and culture of instant gratification that digital is creating. As companies learn more about predicting our needs and wants and adopt compelling, persuasive marketing tactics to drive us toward satisfying them, it's like that our “patience span” may continue to decrease and our desire for "better", "more", "now" is exponential. We could end up reaching a limit, but only time will tell!
In the meantime, convergence is happening and businesses that want to succeed must ahead of the pack. The entire digital revolution has upended the traditional roles between companies and consumers. Convergence is just another sign of that renegotiation; it took time for customers to get comfortable with the idea of putting their credit card information into an online form! The companies that can converge their traditional and digital marketing and turn the data gathered into compelling customer experiences will come out on top.