SoDA speaks with Forrester about digital channel myopia, the rise of client in-sourcing and the need for CMOs to build customer-obsessed marketing organizations
The construct of channel-marketing for “digital” has been around for over a decade but our 2017/18 Global Digital Outlook Study suggests that we’re nearing the end of an era. Both client-side marketers and agency leaders agree the label “digital” will disappear as a meaningful differentiator within 5 years. That said, in the near-term, marketers still seem wedded to its relevance as a means of differentiating marketing activities related to technology. How are CMOs and business leaders wrestling with the idea that digital is (and should be) disappearing as a distinctive, disconnected marketing channel? If “digital” is dying as a label, is it becoming an assumed capability for marketers and agencies alike?
“Digital” the term had its day as a marketing argot necessary to define where consumers increasingly are – and marketers want to be. Its very meaning implies a distinction from the offline, and there’s the rub. Marketers not only talk about digital separately; they plan, buy, and measure it separately. A good chunk of my own career was spent working for digital agencies crafting digital strategies. But this siloed practice does not match consumers’ new behaviors. Between 2013 and 2015, the average time US smartphone users spent on their phones jumped from 58 minutes to 126 minutes per day. This increase did not come at the expense of offline behaviors; consumers are on their phones while shopping, watching TV, driving, even in the bathroom! Marketing practices haven't kept up with these concurrent behaviors. Using the separate term “digital” is emblematic of this issue. Marketers keep digital disconnected from the rest of their plan, so that the consumer ends up with an inconsistent experience across channels. We counsel brands to craft customer strategies that blend digital and offline to deliver personalized, contextual brand experiences across the whole customer journey. To serve this vision, marketers and agencies must dissolve the “digital” distinction when it comes to strategy, creative, planning, and measurement. Marketers need to stop asking for separate digital strategies, and agencies need to make total customer understanding – of which digital is one part - central to everything they deliver.
Client in-sourcing of digital work is a trend we’ve been tracking for several years now and it continues to gain steam. What’s driving this shift for client-side marketers? Which capability areas tend to get the most traction in-house? What are some of the pitfalls and challenges marketers face when building these internal teams
Marketers bring digital work in-house because doing so presents potential benefits of speed, cost efficiencies, control, and internal knowledge. As technology automates more advertising and marketing tasks (eg., programmatic, social listening, etc.), marketers will pursue more in-house pilots, especially as trust in agencies erodes (see ad fraud, fake news, and click bait).
But in-housing is not for everyone. Even if a brand is a candidate because of its scale or industry, it needs to be prepared for internal incredulity, ‘group-think’, and costs like extreme talent premiums, training, and technology investment. Clients often underestimate the time, cost, and effort it takes to move any type of agency work in house.
Areas most likely to move in house are those becoming core and repeatable for brands. As brands fully embrace social marketing beyond just pushing ads out into Facebook, it makes sense to own some portion of social marketing execution, especially with the host of helpful social marketing technology solutions in market. Data and metrics are another area. Having each agency on the roster doing its own measurement and reporting creates data siloes so the marketer never gets a full picture of the end consumer and their experiences with the brand. Another trend to consider is the adoption of new models such as Tongal which gives brands the benefit of crowdsourced ideation without the heavy AOR fee or in-house fixed cost.
Marketers in this year’s study seemed to be experiencing more intense talent shortages than in previous years. Client-side marketers cited major talent gaps for internal digital capabilities related to Executive Management, Social Marketing and Measurement/Analytics. In fact, outside of these roles, marketers cited major talent gaps at a greater degree almost across the board. When you look at the strategy of in-sourcing more capabilities and the importance of evolving internal org structures to fuel these capabilities, do think these talent gaps present a significant challenge for marketers? What are you hearing from your CMO clients on what it takes to build a great internal team?
The most frequent challenges we hear from CMOs are around organization and leadership; the talent gap is a subset of that angst. That talent gap starts with the CMO herself. Last year, Forrester predicted that mounting customer pressure will force CMOs to spend more money and time in 2017 re-educating themselves and their staff. The curriculum? Developing those “unicorn skills” that balance both data acuity and creative brand arts because both are critical to success in the post-digital world. Recruiting talent isn’t much easier. Our data shows that almost two-thirds of all marketers are prioritizing recruiting, creating fierce competition for already scarce resources. Many current brands also haven’t updated their recruiting or retention policies to adapt to the future work force which prioritizes flexibility and meaningful societal contributions. Whether CMOs buy or build such skills will be moot if they don’t fashion a customer-obsessed organization in the first place, where creative resources solve customer problems across their journey rather than focus on Cannes awards, and where data is merged and mined to offer new insights, not fragmented across business unit siloes. In 2017, we expect that at least one-third of CMOs will restructure marketing's role to align to customer segments or journeys. Laggard CMOs will find themselves on the other end of the recruiting conversation, as we expect at least 30% of CEOs will oust their CMOs for failing to properly lead their brand’s digital transformation.
While more than 75% of respondents agree that the term "digital" will disappear as a relevant differentiator over the next five years, 54% of client-side marketers still find it to be a valuable distinction today.
64% of agency leaders agree that marketers are becoming more adept at delivering digital initiatives with in-house teams. Furthermore, 75% of client-side marketers plan to decrease or hold flat their spending with external agency partners over the next 12-18 months.
Client-side marketers are experiencing acute talent shortages for internal digital capabilities in 2017. More than a third of marketers cited "major gaps" in the following areas: Executive Management (44%), Social Marketing (33%) and Measurement/Analytics (32%).