The birth of any technology usually leads to enthusiastic overuse and then eventual moderation. Gartner’s Hype Cycle is a good visualization of the pattern. As the New Year approaches, many companies are climbing towards the Peak of Inflated Expectations by moving towards digital with abandon that just might be reckless.
Look at the recent headlines. In the US, Neiman Marcus is going digital-first. So are The Smithsonian and J.Crew. Coca-Cola is doing the same thing through AI and chatbots. In the UK, ITV News has launched three digital-only shows. Rolls-Royce is doing a digital transformation. In Europe, Lego Group has handed its global media agency brief to Initiative, which aims to be digital-first. In Australia, ABC is undergoing a digital-first restructuring.
For the first time, companies spent more on digital advertising than on television ads in 2017.
But for every company racing up digital’s Hype Cycle, there is another that has fallen into the Trough of Disillusionment. Procter & Gamble cut online advertising by $140m this year and saw a 2% increase in sales. Taco Bell moved ad spend away from digital and back towards TV. So did Turner. An August 2017 CivicScience survey found that 45% of Americans have never bought anything as a result of social media advertising.
So, the question remains: should companies go digital-first in 2018? Here is the only answer that is truly honest: ‘it depends’. The marketing world loves hypothetical ‘one-size-fits-all’ proclamations, but the real world is never that simple. The idea that all companies should be all digital all the time is the Vanilla Ice of marketing advice.
First, the reports of digital-first successes have been greatly exaggerated. The online results would never have been possible without the decades-long building of those brands over traditional media in the first place. It is easy to get 500,000 Facebook followers when you already have 10 million customers. It is a little more difficult for high-tech startups and newer brands.
I cannot think of one offline brand that has been built over the internet, except for Dollar Shave Club. But the exception proves the rule. And as the examples of digital failures above show, pivoting towards the web is no guarantee of success. For best results, marketers need to be channel-neutral.
Don’t think first about tactics and channels
When I was an SEO consultant, every marketing problem was an SEO one. When I worked for a PR agency, we thought media relations was always the best solution. When I was director of digital marketing for a company, I was supposed to focus only on internet-based tactics.
Consultants and agencies will always be biased towards the tactics that pay their salaries. But ‘social media’ or ‘mobile’ or ‘digital’ is not necessarily the solution to every marketing problem. Too many rush to name tactics and mediums as the answers without bothering to do the market-oriented research to identify the problems.
As I have written, the rush of digital marketers towards specific tactics and channels has led to confusion between the two. Despite all of the excitement around social media, for example, the fact remains that there is no such tactic as ‘social media marketing’. Social networks are merely new mediums and tools that we can use in the promotion mix’s tactics such as advertising, PR, and direct marketing.
The key has always been to create target customer segments, define the marketing problem for each one, and then identify the tactics to address those issues. Then, determine the best mediums for those tactics based on the segment’s media consumption. Then, at the end, create the copy and collateral.
A demonstration of a channel-neutral strategy
I will explain this point with a hypothetical example: Mike’s Place, a downtown Jerusalem pub owned by architect Reuben Beiser that was my local when I lived there. In a city that is literally divided down the middle almost like pre-1989 Berlin, the bar is a friendly gathering place for anyone and everyone and has one unwritten rule: no discussion of politics.
I assume that Mike’s Place, like any pub or restaurant, wants to get more people in the door. So, I will demonstrate the channel-neutral process using the establishment.
(Note: I have never discussed marketing in-depth with Reuben, and he does not know that I am mentioning his bar in this column. Consider it a Hanukah present for him. I do not know his business or marketing strategy, so the rest of this column is based on informed assumptions of mine.)
The brand of Mike’s Place
Mike’s Place has a brand that Israelis would call “Anglo-Saxon.” The food is American and Tex-Mex. The music is American, British, and Irish pop and classic rock with live bands at night. The customer service aims to be “American” and enthusiastically friendly (which, if you know Israeli customer service, is a big change).
Mike’s Place is one of the only venues in Israel that broadcasts British, Irish, and European football, American football, Australian rules football, baseball, basketball, rugby, and cricket matches. It is a place in the crazy Middle East where you can listen to The Corrs while drinking a Newcastle and celebrating Man City beating United. Americans come for the Super Bowl at 2 am, and Aussies and Kiwis watch live sport finals at 9 a.m.
In a country where the official languages are Hebrew and Arabic, the bar’s common tongue is English. (Most employees are native-born Anglos or bilingual Israelis.) The pub’s tagline is ‘Your home away from home’.
The strategy for Mike’s Place
Because of my lack of knowledge of the bar’s business and the obvious space restraints in a column, I will not go into more of the marketing in terms of pricing, product, and everything else. Here, I will focus on marketing communications and the promotion mix.
A summary of my thoughts:
In terms of customer segmentation, there are two general groups of people who go to Mike’s Place:
- Jewish people originally from the US, UK, Canada, Australia, New Zealand, and South Africa who are in Israel permanently or for a holiday
- Business people (of any religion or ethnicity) from those countries who are temporarily in Israel for work
For reasons that I will explain below, I will add a third segment that I will argue will lead to maximum growth:
- Native-born Israelis
The plan for each customer segment
Expatriate Anglos. Most of these people find their way to Mike’s Place at least once through word of mouth because the local brand among Anglos is strong. The problem is not getting them to the pub but getting them to come back.
So, for this customer segment, the pub needs to focus on community relations. Obviously, every bar wants to be like Cheers, where 'everybody knows your name'. But it goes beyond friendly bartenders and chatty waitresses.
Unlike the random people who go to a random pub in a random city, the immigrant Anglo community in Jerusalem are a close group and deal with a lot. Living life in a second language. Dealing with terrorist attacks. Being under a political and military microscope because events in your neighborhood affect the entire world. Getting by in a country where the economic inequality is second only to that of the US.
This creates the need for community. Mike’s Place can be the focal point and forum for everyone. The pub could host English-language events such as political discussions, job advice, Hebrew lessons, and religious talks. The attendees could join an English-language email list and Facebook page to remain updated on everything.
Anglo tourists and business people in Israel. Most of these people will not be longtime customers but will instead visit for a short while. So, the problem is maximizing the number who will come once.
The best tactics would involve:
- Optimizing the bar’s website for SEO (getting the website found in searches such as “sports bar Jerusalem” and “American bar Jerusalem”) as well as Google Maps
- Doing direct-response marketing and sales promotions in Google AdWords and Facebook ads for similar terms
- Getting mentioned in online and offline publications that target relevant tourists and business people through media relations campaigns
- Placing coupons in online and offline tourist guides
- Forging corporate partnerships with groups such as Taglit / Birthright Israel, hotels, and travel companies that bring visitors to the country
This plan would increase the number of foreign one-off customers.
Native-born Israelis. Expatriates, tourists, and business people come and go. The real potential for growth for Mike’s Place is the 8.6 million people who live in Israel.
After 20 years of watching TV shows such as Friends, many Israelis view Anglo countries as the real lands of milk and honey that are free from conflict and where a waitress, masseuse, and cook can afford a luxurious Manhattan flat. (Whether that is actually true is not the point.)
Of course, many Israeli families cannot afford the plane tickets and hotels. The solution is to give them a slice of Americana in the desert just as the Studio City hotel in Macau, where I spoke last month at CASBAA’s 2017 television convention, provides a Hollywood experience for people in Asia.
Under the tagline of ‘Visit America Without Leaving the Country’, Mike’s Place could become a destination ‘holiday’ for families during the day. Israeli guys and American girls tend to like each other, so the pub could also feature Israelis cavorting with Americans during the night.
The best way to build a long-term brand would be prime-time TV advertising towards a mass, general audience. Then, when people come, the place could encourage them so sign-up to a Hebrew-language e-mail list or Facebook page.
The importance of strategy
Strategy first – tactics and mediums second. Too many people think first about what mediums to use without ever thinking about the strategy and what tactics to use in the first place. It is as senseless as Nickelback’s popularity in the 2000s.
The best marketing strategies select what to do and what not to do. Mike’s Place should do advertising to target native Israelis but not anyone else. The pub should do direct marketing for visiting tourists and business people but not anyone else. The establishment should community relations for expatriate Anglos and native Israelis and not anyone else.
In the same way, marketers will need to determine whether they should move to digital – and, if so, how. Online mediums, for example, can be good for certain tactics (such as direct marketing, SEO, and PR) but bad for others (such as advertising). But any decision on becoming digital-first should come after the market-oriented research, the identification of the problems and solutions, and the resulting strategy.
We should not be 'digital-first' or 'offline-first'. We should ignore the hype, be channel-neutral, and use the best media mixes for the sets of tactics within our strategies. Only then will we reach Gartner’s Plateau of Productivity. After all, the only reason for a lot of digital marketing is that it is cheaper – but not necessarily better.
In an April 2016 column in The Drum, Telegraph Hill managing director and co-founder Garret Keogh argued that future of youth television in the UK should be strategized as ‘audience-first’ rather than digital-first or TV-first. He is correct, but ‘audience-first’ is just another phrase for market orientation – which has always been a core marketing principle.
Next year, I hope we will remember that fact. Happy holidays, everyone! Reuben, just throw me a latke or sufganiyah for Hanukah whenever I’m in town.
The Promotion Fix will return in January 2018.
The Promotion Fix is an exclusive biweekly column for The Drum contributed by global marketing keynote speaker Samuel Scott, a former journalist, newspaper editor, and director of marketing and communications in the high-tech industry. Follow him on Twitter and Facebook. Scott is based out of Tel Aviv, Israel.