Gartner for Marketing Leaders

Use Digital Marketing to Differentiate Yourself From Competitors

Bill Gassman
Director, Gartner Research Gartner for Marketing Leaders

Richard Fouts
Vice President, Gartner Research Gartner for Marketing Leaders

Laura McLellan
Vice President, Gartner Research Gartner for Marketing Leaders

Lead Authors
Bill Gassman Director Gartner Research Gartner for Marketing Leaders
G00238314

Richard Fouts Vice President Gartner Research Gartner for Marketing Leaders

Use Digital Marketing to Differentiate Yourself From Competitors

Published: 22 August 2012 Analyst(s): Richard Fouts, Laura McLellan

Laura McLellan Vice President Gartner Research Gartner for Marketing Leaders

Customers are less and less receptive to the one-way marketing messages that clog digital channels today. We'll show CMOs how to craft a vision and strategy for building more effective, two-way relationships with customers.

Analysis

Additional Analysts
Jennifer S. Beck Vice President, Distinguished Analyst and Gartner Fellow Gartner Research Gartner for Marketing Leaders Andrew Frank Vice President Gartner Research Gartner for Marketing Leaders Michael McGuire Vice President Gartner Research Gartner for Marketing Leaders

Most companies use old-fashioned "frequency and reach" marketing to cover people with as much messaging as possible. This approach is losing power. For example, people often open marketing emails less than 1% of the time. Social media enables you to create a more intimate, one-on-one relationship with customers. McKinsey & Company reports that 63% of the companies it surveyed find that social media has increased marketing effectiveness. To create a better buying relationship, treat social media as more than a new channel for one-way messages. Here, we'll tell a story to illustrate how you might formulate:

A vision for two-way marketing that will give you a competitive advantage A strategy to turn that vision into reality

Adam Sarner Director Gartner Research Gartner for Marketing Leaders

Vision
Karen Rothwell, the CMO of an IT consulting firm, Parkins Associates, realizes that her company doesn't really have a digital strategy. Certainly, it markets through digital channels, but no vision guides the use of digital marketing to gain a competitive advantage. Last month, Karen met with her senior marketing team for 45 minutes and brainstormed a number of vision statements (see Table 1). Their ground rule: Articulate what they want digital marketing to do to create a digital experience that will deliver value to customers.

Yvonne Genovese Managing Vice President Gartner Research Gartner for Marketing Leaders

Jake Sorofman Director Gartner Research Gartner for Marketing Leaders

Julie Hopkins Director Gartner Research Gartner for Marketing Leaders

Allen Weiner Vice President Gartner Research Gartner for Marketing Leaders

Table 1. Use a Brainstorm Technique to Generate a Vision Statement Attempt First attempts can be vague and not differentiating. Second attempts are often better. Vision Statement Become a world-class digital marketer.

planned vision with something you didn't intend." And Karen faces a high level of inertia in her organization because, until now, it has treated each digital channel separately targeted advertising, search marketing, email, the corporate website, and now social networks and mobile (see Figure 1). As a result, Karen inherited a siloed, sprawling, disjointed digital-marketing operation that lacks vision and useful measurement. She knows that a lot of CMOs are in the same situation.
Figure 1. Most Marketing Executives Adopt a Channel View of Digital Marketing
Personalized email marketing (including integrated video) Mobile phone marketing (including PDA applications) Interactive TV Proximity and contextaware marketing

Use digital channels to communicate our message to customers and prospects with content that is informative, useful and engaging. Engage our constituents in personalized, authentic digital interactions where they participate in their own buying journey. Use a paradigm that is more contextual and more natural where we "listen and respond" versus "interrupt, push and pull."

Often, it's the third attempt that represents an opportunity to lead rather than follow.
Source: Gartner (August 2012)

Direct Response TV Advertising

Personal Selling

Like most CMOs, Karen didn't craft a practical vision statement on her first attempt, but instead had a lofty statement that didn't add much value. Most vision statements are too:

Direct Mail

Aspirational Unrealistic Vague Internally focused Hard to understand

Catalog Marketing

Direct Marketing Channel

Digital Marketing Channel

Targeted and/or individualized digital ads Interactive games (where prospects and customers compete with each other) Mining social networks for personal information that can inform a personalized user experience Others as they emerge and mature

Telesales

Good vision statements create:

Something you can visualize real people doing A platform for assessing strategic options

Source: Gartner (August 2012)

The second attempt was more concrete, but it still emphasized one-way communications. Karen knew this wouldn't work. According to her demand generation manager, Parkins Associates' customers said they consult far more independent sources of information about the company, particularly blogs, product reviews and other online community sites, than the firm's own marketing collateral. The firm's webmaster added that click-throughs and open rates for email campaigns have fallen from 2.2% to less than 1.2%. Karen saw a market gap for the firm to exploit. The third attempt emphasized building two-way relationships with clients.

As a strategy, Karen wants to create a marketing organization that "listens and responds" to prospects and customers as they journey down their buying path, instead of in the words of one of her staffers "preplanning the entire process in advance, with a Visio chart."

The Vision for Paid, Owned, Earned Media

Karen explains that she is one of the growing number of CMOs who think about how they engage constituents in digital interactions with the paid, owned and earned media (POEM) framework (see Figure 2). This view also treats digital strategy not as a set of tactics or digital channels, but as a set of investment choices that can be optimized adjusted as effectiveness data is returned:

Strategy
Karen observes that a digital marketing strategy "is hugely important, because if you get strategy wrong, you either won't move toward your vision or worse, you'll inadvertently substitute your
Page 2 of 8
Gartner, Inc. | G00238314

Paid media is bought through media, such as display advertising, or by hiring a PR firm to do media placements. Paid search also falls into this category. In the digital world, paid media is

Gartner, Inc. | G00238314

Page 3 of 8

particularly useful in raising brand awareness more quickly than other channels due to its immediacy and scale.

Owned media represents channels the firm owns and controls itself. The most obvious is the corporate website. Owned media is particularly useful when conducting outbound campaigns that identify assets, such as the corporate website or one of its landing pages, as a call-toaction destination (measured by Web traffic, and a host of Web analytics, such as landing page hits, how long visitors remain on the site and how many return). Earned media represents positive sentiment from advocates who endorse the firm with usergenerated content, but are not compensated in any way (hence the term "earned"). Earned media comes from satisfied customers, as well as positive press from mainstream media, industry analysts or other types of experts. For example, independent bloggers, though not customers, comment favorably on Parkins Associates based on its success stories.

Goal No. 1: Let buyers guide their buying experience. Offer our customers and prospects more control of their buying process with campaigns that "listen and respond" rather than "push and pull." Deliver highly personalized, more-relevant context in our response to prospects, based on the buyer's previous interactions with us and with buyer sentiment we gather from social networks. Give prospects opportunities to be alerted to changes in our content and thought leadership through more opt-in programs. Goal No. 2: Become an outside-in organization. Inform the design of our solution portfolio with more direct customer input. Use the power, scale and knowledge that can be gleaned from tools, such as social networks and crowdsourcing techniques, to increase the frequency and quality of input and feedback we gather from the outside. (Karen had previously experimented with crowdsourcing engaging groups of people in problem-solving to help design a new service offering. A group of clients offered up a new name for the service, which the company adopted.) Goal No. 3: Add customer-orientation to our website. Improve the quality of the digital experience on our website by taking visitors to content that has context and relevance to their stated need. Give website visitors opportunities to express their opinions and share ideas with facilities that allow user-generated content. Don't just capture the pages a visitor goes to, but analyze where he or she spends time on the site to inform offers and other marketing. All of this new thinking inspired Karen to take the lead in assembling a strategy document, which shows how her digital marketing strategy supports the CEO's business plan. Table 2 represents that document's Table of Contents.

Figure 2. Viewing Digital Marketing in the POEM Framework

Digital Media Strategy

Paid
Search marketing Display ads Email vendors Video-roll (v-roll)

Owned
Websites Search engine optimization Blogs Fan pages Mobile

Earned
Usergenerated content Viral campaigns Reviews and ratings Allocation Mix Adjustments

Metrics

Effectiveness Decisions (Informed by Measurement Reporting)

Marketing Decisions (Informed by Marketing Dashboard and Business Strategy)

Source: Gartner (August 2012)

Three Goals to Achieve the Vision

Karen knows that the POEM framework is an ideal state, and it wont happen easily, so she and her team extend the vision into three goals that it wants to achieve this year:

Page 4 of 8

Gartner, Inc. | G00238314

Gartner, Inc. | G00238314

Page 5 of 8

Table 2. A Seven-Point Strategy Document Describes How We Execute Our Vision Section 1. Review of the Business Strategy Description The highlights of the CEO's business strategy and plan. Why? Positions our initiative as a strategic effort by connecting it to the heart of the business. Shows how marketing is an extension of the business.

Recommended Reading
Some documents may not be available as part of your current Gartner subscription. "What the Rise in Inbound Marketing's Performance Means for Today's CMO" "How to Earn Media by Listening" "Use This Framework for Multichannel Campaign Management" Evidence

2. Review of the Overall Marketing Mission 3. Digital Marketing Mission

The highlights of the CMO's existing marketing mission.

A brief, high-level view of what we want digital marketing to achieve for our organization. The main focus of the document. How we'll extend the mission into an approach that will fulfill the vision in the most effective way. An extension of the strategy into three to five tangible goals that can be achieved in the next 12 months. Attach estimated budgets and time frames for major projects that will be put in place to extend mission/strategy. High-level overview of the supporting projects that extend the strategy.

Positions digital marketing not as a set of tactics, but rather as a source of competitive advantage. Educates management that multiple options exist and why our strategy makes the most sense.

4. Digital Marketing Strategy

We produced this report using primary digital marketing research from Gartner's community of analysts, along with our many secondary research sources. This research is also supported using feedback from client inquiries. Last, we conducted formal interviews with several marketing executives who are facing this very problem moving from a channel-driven approach in which digital marketing is used to support frequency and reach in a transaction environment versus an environment that is more experiential and driven by customers. We also talked with marketing automation providers, search marketing providers and companies that are actively helping clients market to and through social networks.

5. Goals and Objectives

Helps us assign ownership. Best practice: Give each goal an owner.

6. Budget Estimates and Time Frames

Tells management what time and money we need to realize the vision.

7. Supporting Project Streams

Source: Gartner (August 2012)

Puts "teeth" into the strategy.

What to Do Next

Understand what's working in your digital marketing environment (and what's not) before embarking on change. Conduct an initial brainstorming session with people from multiple disciplines to craft a vision for digital marketing that will deliver more than just a customer communications framework. Offer something customers will want to use throughout their buying journey. Look for opportunities where you can exploit the weaknesses of your competitors. Assess strategies for fulfilling your vision. Focus on migrating digital marketing from a channeldriven approach to one that helps you create an engaging digital experience. Choose a strategy that has goals that are achievable within the next 12 months.

Page 6 of 8

Gartner, Inc. | G00238314

Gartner, Inc. | G00238314

Page 7 of 8

Regional Headquarters
Corporate Headquarters 56 Top Gallant Road Stamford, CT 06902-7700 USA +1 203 964 0096 Japan Headquarters Gartner Japan Ltd. Atago Green Hills MORI Tower 5F 2-5-1 Atago, Minato-ku Tokyo 105-6205 JAPAN + 81 3 6430 1800 Latin America Headquarters Gartner do Brazil Av. das Naes Unidas, 12551 9 andarWorld Trade Center 04578-903So Paulo SP BRAZIL +55 11 3443 1509

European Headquarters Tamesis The Glanty Egham Surrey, TW20 9AW UNITED KINGDOM +44 1784 431611 Asia/Pacific Headquarters Gartner Australasia Pty. Ltd. Level 9, 141 Walker Street North Sydney New South Wales 2060 AUSTRALIA +61 2 9459 4600

Why Gartner?
Gartner helps companies improve their business results through the use of technology. Our independent research and advice is trusted by business and technology leaders in 13,000 organizations around the world. Our experienced research analysts talk to marketers every day from those just entering the digital realm to the innovation trailblazers. These interactions capture real challenges, best practices and what is critical for success. Gartner provides marketers with the research, data, tools and expert advice to rapidly deploy, optimize and measure digital technologies and coordinate diverse marketing programs into a strategy that drives results.

GARTNER HEADQUARTERS Corporate Headquarters 56 Top Gallant Road Stamford, CT 06902-7700 USA +1 203 964 0096 Europe Headquarters Tamesis The Glanty Egham Surrey, TW20 9AW UNITED KINGDOM +44 1784 431611
2012 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. This publication may not be reproduced or distributed in any form without Gartners prior written permission. The information contained in this publication has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information and shall have no liability for errors, omissions or inadequacies in such information. This publication consists of the opinions of Gartners research organization and should not be construed as statements of fact. The opinions expressed herein are subject to change without notice. Although Gartner research may include a discussion of related legal issues, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner is a public company, and its shareholders may include firms and funds that have financial interests in entities covered in Gartner research. Gartners Board of Directors may include senior managers of these firms or funds. Gartner research is produced independently by its research organization without input or influence from these firms, funds or their managers. For further information on the independence and integrity of Gartner research, see Guiding Principles on Independence and Objectivity on its website, http://www.gartner.com/technology/about/ ombudsman/omb_guide2.jsp.

Japan Headquarters Gartner Japan, Ltd. Atago Green Hills MORI Tower, 5F 2-5-1 Atago, Minato-ku Tokyo 105-6205, JAPAN +81 3 6430 1800 Latin America Headquarters Gartner do Brasil Av. Das Naes Unidas 12.551, 25 andar World Trade Center, Brooklin Novo So Paulo 04573-903 BRAZIL + 55 11 3043 7544

Asia/Pacic Headquarters Gartner Australasia Pty. Ltd. Level 9, 141 Walker Street North Sydney New South Wales 2060 AUSTRALIA +61 2 9459 4600

Page 8 of 8

Gartner, Inc. | G00238314

 2013 Gartner, Inc. and/or its afliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its afliates. For more information, email info@gartner.com or visit gartner.com. Produced by Marketing Communications cogfmlgfdmprov042313