"Data-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Tom Manvydas, vice president of advertising strategy and solutions at Experian Marketing Services.
Marketers that successfully innovate in digital possess, without exception, established core competencies that deliver consistent results. These marketers can experiment with confidence and design effective digital programs because they have something to stand on.
With a seemingly endless supply of venture capital funding and Internet technology startups, however, Silicon Valley has become an expensive distraction for many marketing organizations still missing their foundational competency in digital.
Many Silicon Valley startups operate in a different economic world compared to companies outside of their industry. Unlike established agencies and marketing services, some Silicon Valley companies have a set goal of being acquired vs. establishing an ongoing, profitable business.
Some companies specialize in technologies with little chance of becoming a viable business on their own. The chance of getting acquired is low yet many venture capitalists still hope to hit the jackpot. I like to call this the Silicon Valley Twilight Zone: It’s where many Internet tech companies start but very few escape.
This Twilight Zone ecosystem of innovation at the speed of light presents a challenge for marketers trying to realize the data-driven promise of digital. Even though these Twilight Zone technologies are not ready to drive profits, the more established players are under extreme pressure to keep up with what they are producing, evolve their own strategies and have an immediate return on that investment. For brands, CMOs must now explain their Twitter advertising strategy when search and email programs aren’t consistently delivering results.
With so many technology providers and an endless pipeline of new startups, it is easy for marketers to feel overwhelmed and out of the digital loop on new marketing technologies. Marketers have little control over this. So what can they do?
Establish And Build Core Competencies
You’d be surprised how many marketers play Whac-A-Mole in digital without a competent search or email marketing program. A solid competence in data of one digital format will help immensely in understanding other digital formats. For example, you can better understand and optimize results from mobile interstitials or content marketing on Twitter if you already know how your search and email campaigns work.
Yet many marketers can’t explain the effectiveness of their digital campaigns because they don’t understand various metrics for their search and email campaigns, such as revenue per thousand impressions and cost per action.
Get Retargeting Right
Optimize retargeting once you have the basics of search and email covered. Since retargeting often provides positive ROI immediately, most marketers never bother with optimization. But integrating retargeting with your search and email programs can dramatically improve results.
And don’t forget to integrate retargeting with your prospecting campaigns when those are established. There is a surprising amount of waste in retargeting, in the range of 30- 50% of impressions. You can eliminate much of it by integrating retargeting with your other established online marketing programs. Retargeting is a data-driven marketing tactic, so manage it like one.
Reset Expectations: Digital Is More Tortoise And Less Hare
In a sea of never-ending choices, digital’s instant feedback can lead to knee-jerk decisions about what does and does not work. Marketing organizations need to reset expectations and recognize that the most effective data-driven tactics are ones that are developed and refined over time.
For example, customer purchase cycles and lifetime value are proven by decades of marketing research but they are often ignored in the hyperspastic digital world. Another example is frequency optimization, where up to 85% of display impressions can be wasteful. Frequency optimization is not about blindly applying caps but about observing measureable marketing results over time, relative to frequency.
If you analyze frequency over time, you will see that lack of optimal frequency, or underfrequency, is a much bigger problem than the overfrequency everyone focuses on. Understand and optimize your frequency across established programs before trying to figure out how to engage a few dozen prospects from mobile check-ins.
Don’t Chase Marketing Technology
With so many marketing tech companies offering services, it is hard to determine what is real and what is not. If the technology is great, you will find out about it and it won’t be too late. There is nothing wrong with having someone else establish a good practice then building an even better one on top of it. Later versions of these great innovations are often set up to generate profit. Don’t get distracted by all the noise from the latest technologies and more importantly, focus your time and resources on proven capabilities.
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