Marketo’s 1,000th Blog Post: Our Modern Marketing Definition Revisited
This is the 1,000th post to Marketo’s blog. It seems fitting to commemorate the occasion by revisiting our very first post, “Modern B2B Marketing Defined”, and commenting on what’s changed – and what hasn’t – since August 8, 2006.
What Hasn’t Changed
The three core principles I outlined then are just as true today – in fact, even more so.
Customers don’t want to be interrupted (and they’re more empowered than ever)
We live in a word of information abundance and attention scarcity – and the pace of information creation is accelerating. According to IBM, we now create 2.5 quintillion bytes of data each day — so much that 90% of the data in the world today has been created in the last two years alone.
Because of this, traditional marketing tactics based on “renting” attention that others have built — and interrupting the buyer in the process — are becoming less and less effective.
Buyers today are more empowered. The Web provides them with instant information gratification. They can access detailed specs, pricing, and reviews about goods and services 24/7 with a few flicks of their thumbs. Meanwhile, social media encourages them to share and compare, while mobile devices add a wherever/whenever dimension to every aspect of the experience.
It’s our job as marketers to adapt. The only sure way to break through is to become more engaging. As McKinsey wrote in The Coming Era of On-Demand Marketing, “Building on the vast increase in consumer power brought on by the digital age, marketing is headed toward being on-demand —not just always ‘on,’ but also always relevant, responsive to the consumer’s desire for marketing that cuts through the noise with pinpoint delivery.”
There are no more mass channels (consumers expect personalized conversations)
Buyers are harder than ever to reach using traditional channels and media outlets. They will quickly tune out any mass message that’s not immediately relevant to them. They expect companies to keep seamless track of their purchasing history, communication preferences, and desires… and they demand that companies use that information to create individual, personalized conversations. Whether they’re in front of their computer at work or in line at the post office on their mobile device, they expect an experience that’s streamlined and consistent — and most importantly, relevant to them as individuals.
Marketing can’t get away with not being accountable (fortunately CMOs can prove impact)
The 2008 recession permanently altered how companies think about measurement. Budget cuts made it more important than ever to measure the effectiveness of marketing investments, even as highly-measurable digital channels raised the expectation for measurement across all channels. Fortunately, many marketers are rising to the challenge – and this new-found ability to measure and prove impact on revenue is dramatically elevating marketing’s strategic role in the organization. Many marketing departments (and CMOs) are now seen as a core part of the revenue team, not the “arts and crafts” center.
What Has Changed
While the core principles remain true, here are some of the most important factors that have redefined modern marketing over the last seven years.
The rise of content marketing
Content marketing is when brands create and distribute content designed to be relevant and valuable to their target audiences, with the objective of driving profitable customer action. Ideally, this content is not about the company or its products and services; it educates or entertains. For example, say you are a retailer of fashionable shoes. Instead of sending promotional offers to your customers (10% off! Free shipping! Buy now!) you become a trusted source of advice about fashion and trends. This makes content the perfect antidote to buyers who don’t want to be sold to and will screen out anything they don’t want. It’s also the perfect alternative to “rented attention” since brands build “owned attention” when they publish their own content. When your content is on target, you don’t need to find customers – they’ll find you.
This trend has implications throughout marketing. Company websites are increasingly looking like media publications. We are seeing new display advertising formats that offer links to relevant content pulled from the company’s website. Lead nurturing is based on the premise of sending relevant content instead of hard promotions. Buyers who attend events are not shy about expressing their displeasure over any presentations that appear even slightly promotional. And so on.
This results in a shift in how marketing budgets are allocated. In the “old marketing”, companies built brands with broad mass media. But these investments were hard to measure, so spending shifted to highly targetable and measurable channels; IDC research shows that digital’s share of the marketing budget has risen from about 13% to 33% over the last five years. In coming years, companies will find ways to invest more into their content strategies to build brand and awareness. This will take even more budget away from traditional spending (especially events and brand advertising). But because content often means investing in people instead of programs, we will see an overall shift towards more staff and less program budgets. At the same time, since investments in content are harder to measure than direct response programs, marketers will have to get good at showing the value and defending these budgets.
The social media revolution
People were talking about “social” when I wrote my introductory post in August 2006, but at the time the focus was on creating communities and new content formats like blogs, podcasts, and reviews. Twitter had only launched at Odeo a month prior and didn’t become its own company until April 2007. Facebook had not yet opened to the public (that happened on September, 11 2006). Pinterest launched in March 2010, and Instagram in October 2010. And today there is a steady supply of new places to share and connect: SnapChat, SoundCloud, WeChat…
Social has certainly accelerated the rate of information abundance (more content sources!), and further empowered buyers to control their brand experiences. At the same time, it gave companies new ways to connect with consumers; brands such as Disney, PlayStation, Smirnoff, Samsung, Intel, and Coca-Cola regularly engage with more than a million consumers a month on Facebook. (Arguably, each social channel becomes “less cool” once the marketers find it, so we will have to see how that evolves.)
The result has been an exciting time of experimentation about what works in social and how social is impacting marketing. We are collectively still learning, but a few lessons have become clear:
- Social can work for lead generation, but only by recognizing that each social network is different and requires unique messages and offers. Many of the networks (Facebook, Pinterest, Instagram, Tumblr) are highly visual, driving the need for more visual content.
- Social makes the “individualization” problem harder and more important. If companies are going to build true cross-channel experiences, they need to be able to connect identities across channels – in other words tying jon[at]marketo.com to @jonmiller to +jonmiller2 and so on. Companies that can do this will be able to listen to behavior on one channel and respond with relevant offers on others. For example, a company can use Facebook Custom Audiences to put powerful brand messages in front of accounts they are trying to close, and thank you messages in front of new customers.
- Social is affecting search (and vice-versa). Information abundance means that search is one of the most powerful tools available to marketers. Consumers are explicitly opening their attention and seeking content. Social matters because content that gets shared ranks better. And we’re just beginning to work through the implications of search on the social networks themselves (e.g. Facebook Graph search).
- Social is best when it’s integrated into everything you do; don’t run social campaigns, make every campaign social. For example, if you are holding an event, ask your registrants to invite their networks to the event as well, and give prizes to those who drive the most attendance.
- Social has changed the role of influencer marketing. It’s no longer enough to focus on a key press and analyst contacts. Now, anyone and everyone can be an influencer; the marketer’s job is to identify who is influential in their space and find ways to connect with them individually. This is creating a new role in some organizations.
The explosion in mobile
Back in 2006, mobile marketing mostly meant SMS messaging. The iPhone was not released until June 29, 2007, and the iPad didn’t come out until April 3, 2010. But today the growth in mobile computing is unprecedented. NPD DisplaySearch says there will be more than 700 million smartphone shipments in 2013. StatCounter Global Stats predicts that mobile currently makes up 15% of all internet traffic. Litmus reports that as of Q2 2012, more emails are opened on mobile devices (42%) than desktop (34%) or web clients (24%).
Today, mobile content is designed to be “responsive”, with calls-to-action customized for the medium (e.g. content viewed on mobile can have a prominent “click to call” capability). Companies are creating new ways to engage consumers with unique experiences leveraging apps. Location-aware devices are driving innovation in local marketing with geo-fenced offers, check-in offers, and augmented reality. Companies are beginning how to take advantage of technologies such as near-field communication and mobile payments.
This innovation is happening as we speak and will continue in years to come. And all this is before wearable computing (always-on, always-connected, environmentally-ware) takes off!
Innovation in cloud-based marketing solutions
Unlike prior generations of marketing software, today’s leading marketing software companies provide their solutions using “software as a service” (SaaS) – meaning marketers use the tools in the cloud with little or no IT support. Also, these solutions are sold as a recurring subscription, so marketers can buy them using operating budgets instead of making capital investments.
These two factors are critical. Marketing is unfortunately seen as a cost center at most companies, so it can be a challenge for marketing to get the capital investment and IT support to implement traditional technology solutions. But at the same time, marketers have large discretionary operating budgets that they easily spend on marketing programs such advertising and agency services. By enabling companies to buy marketing software like any of these services, the cloud-based solutions removed the largest impediment to marketing technology adoption.
As a result, we’ve seen an explosion in innovation in marketing technology, with thousands of solutions in categories ranging from as social ad management and content curation to marketing analytics and predictive scoring to website optimization and more. While this is great for marketers since innovation and competition leads to better solutions, it can also be overwhelming and un-integrated.
As a result, in the coming years we will increasingly see fewer single channel solutions (e.g. email service provider) and more investment in integrated marketing platforms that tie the pieces together. A marketing platform for the modern marketer will have four main components:
- A marketing system of record. At the core is a marketing database that combines demographic and multi-channel behavioral data about prospects and customers. It serves as the marketing system of record for all prospect and customer interactions with the organization, enabling the marketers to “listen” and understand their customers to ensure maximize relevance.
- A cross-channel workflow and interaction engine. This orchestrates the creation and automation of complex marketing campaigns, customer lifecycle workflows, and consumer conversations across online and offline channels. It enables organizations to script and manage streams of customer interactions and engage in personalized, interactive dialogs that build relationships with prospects and customers.
- Marketing management capabilities. Sometimes called marketing resource management (MRM), this helps companies increase the overall efficiency of their operations with planning, project management, and collaboration tools. Specific capabilities include assigning top-down budgets to various groups and divisions; planning marketing spending across programs; tracking open-to-spend budget and ensuring budget compliance; coordinating workflows and permissions; and maintaining a marketing calendar across multiple groups.
- A powerful analytics engine. This combines very large volumes of data with advanced analytics to help marketers pose and answer sophisticated business questions. Examples include: how to choose the higher value marketing messages and offers for each prospect and customer; how to best allocate marketing resources among different channels, programs, and initiatives; and how to prove the effectiveness and revenue generation impact of their various marketing and sales activities. In coming years, new predictive analytics and “Big Data” techniques will enable even more dynamic personalization and real-time marketing.
One Final Change
Close readers of this blog will note that we’ve dropped “B2B” from the title. While we’ve seen tremendous growth in business-to-business marketing over the last seven years, the core principles of modern marketing – relevant and engaging messages, multi-channel conversations, and powerful analytics – apply just as well to business-to-consumer (B2C) companies.
I look forward to exploring these themes over the coming months and years, and as always, I appreciate your input. Please let me know what you think in the comments.