The Covid-19 pandemic changed the lives of us all. And the consequences of the Russian invasion of Ukraine, and the Hamas attack on Israel also continue to rumble around the world. Many individuals and businesses are adversely affected through no fault of their own. But there is always more going on than first meets the eye. There are always a myriad of macro and micro forces that change customer behaviour, markets, and point to new opportunities as well as threats.
Sales of high heeled shoes fell dramatically during the pandemic (1) notwithstanding the staying at home, health and fashion memes that took hold. Car usage also declined without a need or opportunity to travel. And today, the sales mix of cars continues to change due to concerns about climate change, pollution and healthy living. In the UK, most notably, also due to legislation, extension of low emission areas and the associated cost drivers and barriers.
Some shifts were magnified by the C-19 pandemic. And the biggest shift of all … to a digitally dominated world …. was also facilitated by smarter phones with increasing and lower access cost.
The shift is most obvious in retail (2). Whilst many retailers bemoaned the health crisis and gobbled up the Government grants, this merely diverted attention from their inability to anticipate and position themselves to compete in a digital world.
Consequences flow from the inflexibility of Marks and Spencer, to the ubiquity of Tesco, to the profit squeezing of fund-owned brands such as Boots and Debenhams. Also the fall from grace of wheeler dealers who grew fat on the glories of pre-existing brands. All were further compromised by greedy local government making it more difficult and costly to visit any high street.
To survive and thrive at all times, there is a need to remain vigilant to both macro and micro forces affecting your business. Then, and only when, you understand the forces, can you figure what these mean for your future. This is key to devising effective business and marketing strategies.
Every force has an opposite though not always equal reaction. For example, for many the balance of office and home working changed. This continues today suggesting it is a long-term behavioural shift. Underpinned by an individual’s ability to save travel costs. And also to boost business productivity. There is evidence of increased staff productivity, as well as well-being and health. Businesses participating in 4-day working week trials consur! (4) So on one hand, expect a further shift to 4-day from 5-day working weeks and all that that brings. And on the other, expect more incentives to entice staff into offices.
While 77% of UK CEOS have increased their investment in digital transformation (3), we suggest you work out the best balance and inter-relationship between on-line and offline. Certainly there are pitfalls in managing marketing in a digital world as we’ve warned for years. However, they are only coming to the fore as evidenced by recently announced layoffs by the likes of Meta. Though those of you with longer memories will remember the Internet boom and then bust of nineties. So tread carefully and measure and manage promotional effectiveness across all media.
A counter force, as confirmed by our recent Buckinghamshire High Street survey, is that High Street businesses must pay more attention to the customer experience to win custom back from online. Some places, of course, already do this, and the likes of John Lewis, and many garden centres, for example, have long realised the value of combined shopping and eating/ drinking experiences.
Governments and councils speed or impede change too. By enabling a fairer or laissez-faire playing field between the High Street and online pure plays. For example, by easing High Street access, parking, reforming property charges, and taxes, shifts demand and supply-side economics. All is fair-game for the lobbyist.
(1) Glossy.co (2020)
(2) A record 35% of sales were online (January 2021 – ONS)
(3) CEO survey (PricewaterhouseCoopers March 2021)
(4) 4-day working week trials (Feb 2023)
(5) Seven perks to entice staff into offices, BBC (March 2023)
The digital age is now over 30 years old, though its consequences have become more prevalent due to the emergence of a (non-computer) bug that rampaged the globe.
The number of digital platforms, their actual usage and time spent online has simply sky-rocketed. At the height of the April 2020 Coronavirus lock-down to 4 hours and 2 minutes a day compared with the mean time spent online in 2019 of just 3 hours and 19 minutes (1). And linked to this the online proportion of total retail sales also sky-rocketed to nearly 33% compared with less than 20% through the whole of 2019 (May 2020)(3).
It is fair to say that this massive growth caught everyone by surprise except the early digital adopters. They are easily underestimated as nerds, the youth of today or both!
However, the world will never be the same again. Digital now permeates every aspect of life for every generation of whatever creed or country. Generation Y (so-called Millennials) watched as the digital world erupted around them, and Generation Z were the first generation to live digital lives from birth. The 2020 lock-down embedded the shift to digital. And the children of Millennials (Generation Alpha) are now set to be the most digitally savvy ever (Figure 1).
But did you know the extent to which Google and Facebook dominate online reach and time spent online? (Figure 2). In the UK, they reached over 95% adults and commanded over 45 minutes and 30 minutes a day respectively. Their dominance is such that a massive 39% of total time is spent on Google-owned media (including YouTube) and Facebook-owned media (including Instagram and Whats App) (4).
And as the public turned online, so has Marketing. As a result, some 57% of total UK advertising expenditure now goes online. Initially and still mostly to Google, who offer certainty of audience reach at a competitive cost and also expertise on the vagaries of search and algorithms. All without the need for a long term commitment to planning or creativity.
Yet their costs have grown and thus the balance of spend has tilted their way at the expense of TV and press, outdoor and public relations, and even other online media. Such that some 78% of online advertising spend, now goes to Google and Facebook (5). However, advertising was not their original nor primary intent, and their advertising and analysis offers are only based on a superficial understanding of marketing. Not for these digital experts the troublesome need to build brands or customer loyalty, but merely to attract clicks.
However, there are now signs that the emperors’ clothes are wearing thin. Google’s annual minutage fell in 2019 (6), and search advertising revenue appears to be flat-lining. Though Facebook advertising shows continued growth (Figure 3).
So how to manage marketing in the new normal?
While the digital world perpetuated keeping in touch and entertainment in many forms, customer usage also expanded through predictive text and emoji. Because people do what they always do … congregate and gossip, and be amused and saddened. For human nature is what it is.
So building strong brand relationships and customer loyalty remain the bedrock of marketing.
And understanding human nature and their concomitant behaviour is also at the heart of Marketing.
The fundamentals to manage marketing in new normal remain constant as much as change is a constant. It is in embracing change and remaining customer-centric that Marketing is most successful.
The Marketing Director’s role is to understand and exploit the change to benefit their organisation by always staying one step ahead. That’s what successful marketing has always done and must continue to do.
To help you stay a step ahead, we’ve launched Volume 2 of The Marketing Director’s Handbook – Managing Digital Marketing. This spotlights, and puts marketing in the new normal in context. It helps you understand the changing digital world and also to manage key digital marketing activities. Specifically, to optimise your website for search, and better use advertising, and social media to attract and engage more customers. But most fundamentally to help you better lead your organisation, and manage marketing as a whole.
The Marketing Directors Handbook is available as a one or two volume work from all good bookshops, including Foyles, Waterstones, WH Smith, Blackwells, Amazon, many university bookshops, as well as our own bookshop (with free P&P).
1, 2, 5 and 6. OFCOM Online Nation 2020. Base: All adults 18+. This is updated every year.
4. OFCOM Communications Market Report September 2020. This is also updated every year.
‘Stay with me baby’ – from the Walker Brothers to Leanne Jarvis (1966+)
Staying contemporary and relevant is essential for successful marketing. Especially in the ever-changing digital world. However the basics of marketing, consumer and brand remain constant. So does the marketing director’s main function – to stimulate demand through great products and communication.
However, by examining these factors individually, a pattern emerges which helps improve marketing effectiveness.
Firstly, the almost obvious point is that ‘digital marketing’ is no longer separate from ‘marketing’. The popularity of the smart phone (now in 78% penetration in the UK) (1) and the ongoing march of the tablets (now with 58% UK penetration) combined with the ubiquitous Internet and ever faster access speeds mean that ‘mobile marketing’ is all around us. Appreciating that mobile is digital, then the term ‘digital’ is no longer as isolationist as the term implies. Everything we do is created, managed, recorded and also reported digitally. So now the starting point is to think digitally, from the outset. Particularly in planning and selecting media, and using the right platforms.
The demand to monetise, for Google, Facebook, Twitter et al, means growing advertising revenue. Further, this means making themselves more relevant to brands – to deliver relevant communication to consumers that brands wish to target. Google’s algorithmic heart beats faster as the metaphoric Hummingbird’s wings beat faster and faster to seek out the nectar in search behaviour. And thus sell it to us. That ‘nectar’ is message relevance to the search. As a result, this means that the irrelevant, from a search marketing perspective, activity of link building, creating pages of lists i.e. keywords, for the sake of a high Google search ranking is now redundant. In turn this also means that ‘content for contents sake’ is dead too. Distinctive, credible and relevant messages are taking its place. So the growing range of social media from Facebook, Twitter, LinkedIn, Pinterest, Instagram, require understanding. So understand customers, and their behaviour, before mining.
Recognising that these new offers are simply new media channels means that marketing thinking is more important than ever. To rise above the operational hum-drum and relegation of content to a handful of keywords. Content has to become creative. In that simple sentence is a dilemma for the marketing director as the agencies providing ‘search’ marketing be it ‘pay-per-click ‘, ‘search engine optimisation’ and now ‘social media’ are all ill-equipped to be ‘creative’. The challenge for the marketing director is to embrace all these media and thus design and ‘brand’ platforms and pages to cut-through and appeal.
Specialist digital marketing agencies offer technical platform expertise but not necessarily strategic and message proficiency. However, they are in danger of being left behind, limited in their appreciation of how what they do fits in and inter-relates to marketing world. In particular, this is compounded by zero appreciation of the brand and the differentiation required. Consequently, the marketing director must recognise the shifts in media platforms and where agency technical limitations lie. Marketing directors must therefore fill the gap, champion creativity and lead the brand in all that they do.
It is not only in the message and media platform that the digital world has changed. Let us think about media planning. At the Marketing Society conference 2013, Chairman of WPP Group, Martin Sorrell gave the best rational for his giant agency group yet… ‘We remain committed to being ‘media neutral’ (2). The aim of media neutrality is to select the most cost-effective media to deliver the relevant message to the specific audience at the right time. While this is a vital function of marketing, it is also more relevant than ever.
In selling their media platforms to advertisers, agencies and media alike are not unnaturally using data, big data. However, big data only make it doable as long as it is the right data. So now with a customer relationship management platform like Marketo (3), the right data can be captured and marketing communications integrated.
The customer continues to drives all we do in marketing. The fact that media is in customers’ hands, not the hands of media owners, also means more complex cause and effect relationships. So marketers must understand these morays and react accordingly. From apps for specific brand and product messages: activities to interact and engage social communities: the blending of blog, forum, network, web site. All amplified by text and tweet. All thus puts renewed emphasis on planning. As a result, media planning should take place in the context of all marketing, not in isolation. In order to build a media matrix that meets the needs of your brands, and only your brands, disavowing the numbers of each individual medium.
The challenge for the marketing director is therefore to understand all customer groups. Also the customer’s journey to discover and build strong brand relationships. This means being aware of how they discover, and use brands, and in particular, their thoughts and feelings at each stage. This is not a phrase we in marketing should ever forget! Through ALL channels. Phones, iPads and screens. From adaptive responsive web sites, viral this or that, to commercials that recognise fast forwarding, to multi-tasking using a phone or tablet whilst watching TV, to …. you name it. As a result you can choose the most cost-effective combination of messages and media. And thus better persuade and boost sales and profitability.
Managing Digital Marketing is now available in paperback form.
(1). A decade of digital dependency, OFCOM August 2018
(2). Martin Sorrell, Speech to the Marketing Society 2013