It’s time – marketers should start focusing on owning the conversation

More and more brands are moving their marketing expenditures to digital. Last November Campbell’s Soup increased its digital marketing budget from 22% to  40%, while PepsiCo reportedly put 40% of its Super Bowl budget to digital. Digital, social, and mobile marketers are swirling around these terms but many struggles to find scale.

Gartner estimates that firms are spending 11% of revenues on marketing overall. On the paid media front, McKinsey & Company estimates that marketers globally spent $1.6 Trillion in 2015 and that this spending on media will grow at a compounded annual rate of 5.1% to $2.1 trillion by 2019.  In the United States, eMarketer estimates the U.S. Marketers spent $189 billion on advertising in 2015 and they’ll spend nearly $195 billion in 2016.  All three of these analysts agree that the general trend of this spending is flowing into digital media, especially paid media in mobile web and apps.

Most marketers are still focussed on reach and audience

PepsiCo’s chief financial officer, Hugh Johnston, on the company’s quarterly earnings call last week commented that a significant constraint to putting more dollars in to digital revolves around “identifying high-quality properties to advertise on.”

There is little doubt that paid media is and will continue to be a critical element of the marketing mix for the forecastable future.  However, most marketers are leaving money on the table.  

Most marketers are tenant farmers, they pay money to the land owner to use the land, to reach an audience, and like a tenant farmer, as soon as the marketer stops paying for media, they’re kicked off the land.  This means they’re no longer able to engage their audience and they’re left with little or no lasting return. They neglect to use their paid media dollars to create the most important asset for themselves, a database, a direct line of communication with the market. 

When we talk to marketers about this and we often hear,

• There is no scale in direct communication
• Personalization is hard
• We don’t have enough data
• We have no content to share
• We have little or nothing to say to an individual 
• I’m not rewarded for building lasting assets, I’ll be out of this job in 18 to 36 months, I need to focus on today’s objectives (even though I know they’re inefficient) and not building a lasting asset

So, what do marketers do?  They continue to do what is comfortable. They buy media, focus on SEO and SEM.  But this won’t last for long. The majority do not trust media, according to Edelman, 60% of countries distrust media.  Advertising in this media is inefficient, we applaud engagement rates of less than 1% to 3%.  One out of every three dollars is going to ad fraud.  And, if that is not enough, ad blocking is becoming a real issue. By some estimates, 26% of American Internet users have used ad blocker software and as many as 41% between the ages of 18~29 are doing so. 

It is time to start owning the conversation 

It is time. Marketers need to get the most out of their media spending while weening themselves off it.  They need to start owning the conversation with the people they serve.

This will take time. This is possible. Your brand is a collection of all the experiences, every micro-moment, an individual has in it, and with its competitors. Mobile is unique. Mobile is addressable. It turns any medium, digital or physical, into a real-time integrative experience.  Marketers can and must learn how to manage these experiences.  

Establish an Owned Media Causeway

To accomplish this, marketers should establish what we refer to as an Owned Media Causeway.  Marketers should strive to include call-to-actions and invitations in their paid and non-communication based owned media to drive people back to their owned communications based media channels and encourage people to opt-in to the marketer’s direct communication media programs, like the SMS or email loyalty program, or browser and in-app messaging and notifications.  This is the only path forward for self-sustainability.

Start Learning

It is hard. It will take patience and effort.  It will require that we all learn new skills, but we must. As noted by Randall Stephenson, CEO, AT&T, “People who don’t spend 5 hours a week online learning will make themselves obsolete.”  This is not a message for just people, it is a message for companies, marketers and their teams.