The trick to justifying spend in a crowded market is revenue-driven outcomes
According to the Digital in 2017 Global Overview report by We Are Social and Hootsuite, internet users in Asia-Pacific are up 15% year-on-year, passing 1.9 billion. Meanwhile, social media users are up by 25% to surpass the 1.5 billion mark, with 95% of them using social media via mobile devices.
In a crowded market, justifying spend is even harder
Mobile devices and internet connectivity are staples for 66% of the world today. Today’s consumer is exposed to infinite touch points over multiple channels and media. This means that the consumer has unfettered and, more importantly, instant access to information. The economy possesses close to perfect information; they know what alternatives are available around them and at what prices.
Product utility is no longer a deal-breaker in determining the success of enterprises. In an economy that is virtually saturated, the differentiation lies less in the product than in the relationship with consumers. The need of the hour is to develop the capability to engage consumers, creating differentiation in customer experiences to win over spending dollars.
Reliance on adtech alone is outdated
It is in this light that we must examine what adtech provides to enterprises. Adtech is about reaching large groups of people to build awareness. Granted, many adtech service providers have incorporated data analysis in their strategies to provide a more targeted outreach. Metrics such as impressions and click-throughs, likes or shares are used to determine campaign success but it is yet unclear how these numbers tangibly contribute to enterprise bottom lines. Marketers focus on this flurry of numbers and fail to realise that they should really be driven by outcome, through individual market action (or inaction) to quantify the effectiveness of marketing spend.
Earlier this year, JPMorgan Chase (JPMorgan) had ads placed across 400,000 sites. For brand image reasons, JPMorgan reduced this number to 5,000. There was no significant “deterioration in [their] performance metrics” after this cut, indicative of many wasted marketing dollars placing ads on irrelevant sites.
According to a ShopBack study, there is a greater likelihood of being involved in a shark attack than receiving a purchase order via display ads.
These examples echo findings by Marketing Metrics, who found that the probability of converting an existing customer is 60% to 70% compared to 5% to 20% for new customers. Bain & Co. found that increasing rates of customer retention by 5% returned between 25 to 95% profit increases.
How can enterprises cut through the clutter and noise of all the competing information online and ensure strategic and intelligent marketing spend?
Data-driven strategy with revenue-focused outcomes
Applying the concept of almost perfect information in the marketplace, enterprises must adopt an approach that leverages the availability of customer information. This will aid an effective strategy for intelligent marketing spend. With a data-driven strategy, the tedious work of profiling is automated and the audience can become a more targeted group.
Actionable marketing insights centred around the marriage of transactional and non-transactional data help enterprises to stretch their marketing dollar. Through use of an automated marketing tool or system, these insights can be translated into both targeted and personalised ads that shape consumers’ perceptions on your terms, to drive revenue. As automation is iterative, the data-driven process is dynamic, adaptable and most important of all, predictive. This level of sophistication can only be achieved with technology.
The ‘now’ factor with measurable outcomes
Enterprises have neither the resources nor the horizon to wait for an arbitrary return on conventional adtech spend. An automated marketing system, utilising key and relevant metrics to continuously evaluate the performance of data-driven marketing in real-time, allows for real-time analysis, data collection and implementation. The mobile consumer means that any acquisition horizon longer than the instance of impulse purchases is already too slow.
In today's digital world, data and analytics are king of the ring. It makes everything measurable, helping enterprises determine what does or does not work. To maximise the revenue-generating outcome of marketing efforts, the A/B testing model of automation allows for the identification of the most effective channel, allowing enterprises to flood this channel with contextualised content.
The road ahead
As the new marketplace steers toward instant gratification – customer loyalty ceases to exist. There is a need to marry marketing spend and intelligent strategy to effectively drive revenue - immediately measurable for enterprises and relevant to the consumer. Engagement martech driven by data helps businesses achieve both outcomes, as an integrated customer relationship management (CRM) and enterprise resource planning (ERP) solution. Looking forward, the next challenge in marketing would be mapping consumer data from multiple sources to optimise the infinite touch points consumers are exposed to.
Anna Gong is CEO of Perx.