Digital Media – Are you winning the game?

The Six Characteristics of Companies That Are Winning the Digital Game

May 03, 2013
McKinsey partner leading Digital Mktng Strategy Practice

I recently spent several days with digital tool and digital media companies who aim to change the core operations of marketers through very cool new analytics and workflow capabilities. Adobe and Google, in particular, have ambitious strategies behind their offerings that, if marketers adopt them, will remake fundamental aspects of how organizations operate — their speed, their accountability, their adaptability, their ability to mobilize a broader ecosystem of digital media & service suppliers, and even their creativity.

All of these changes are meant to enable marketers to better exploit the capabilities of digital media /social/mobile channels. BUT, at the highest levels in many companies, the culture, focus of leadership, incentives, and management mechanisms are simply not set up to enable the transformations to happen. Across several dozen deep interviews we have done withChief Marketing Officers, digital leaders, agencies, and media providers, we see six characteristics in the companies whose leaders are able to make broad digital change happen:

Align at the top: Across the executive suite, there not only is a digital steering committee to evaluate investments, but there is also a common base of beliefs about the core changes that digital is forcing the company to make in its strategic direction and operations. Everyone knows the priorities, their economic implications, and the trade-offs the company will make as it drives forward

Commit to the Customer Decision Journey : In the strategic and marketing planning processes, business units must describe their perspective on the changing decision journey and how it is affecting their plans. They have rich depictions of different personas, understand the key “battlefield” touchpoints that matter, and aim not only to win those battlegrounds, but also to reshape the decision journey in their favor. They allocate spending from a balanced perspective across the whole journey, not just starting with brand consideration and customer acquisition, but giving a complete look at all of the stages in the journey and sorting out the right portfolio of investment. They are agnostic about whether they should spend on acquisition, retention, engagement, or service, and let each brand/geography sort out what the best growth route is for themselves.

Have fingers on the pulse: They continuously evaluate their in-flight marketing programs for improvement opportunities. They design what they do to have embedded tests that can flag new ideas to adopt and scale, and they look at leading indicators, such as social buzz, search volumes, or various engagement measures to get quick reads on whether an idea is getting traction. With tight links to their agencies, legal teams, and media partners, they get changes or new ideas out quickly, in response to feedback or what they see trending generally in the market. The whole attitude is much more that of a newsroom than a movie studio.

Stay flexible to re-allocate: When plans are done for many companies, they lock in spend with media partners up-front or to specific business initiatives. Digital change leaders give themselves much more slack. They hold back 30-40% of their budgets to allow opportunistic changes in spend. They work as a cross-functional team to decide whether to move money from one objective, such as price promotion, to others, such as post-purchase engagement. Teams have shared accountabilities for total brand performance, and they fight against the growth of narrow silos that often proliferate as managers get stuck focusing on just search, social, promotions, etc.,

Think like a designer not a campaigner: Recognizing that much of their digital/social/mobile spend is on experiences that customers must engage with to be valuable, they think about the design of these experiences like a software developer. They test usability, try small-scale pilots, track detailed data on how people interact, and constantly tweak. Better tagging systems on sites now go much deeper than the page to assess engagement with specific modules within a page. These marketers have a tight link between marketing and a dedicated group of IT programmers (sometimes outsourced to agencies).

Cultivate digital talent: Many companies are finding it hard to fill senior digital roles. They are also struggling to get sufficient talent with basic analytic skills embedded in all of their business units across brands and geographies. Therefore, leaders are explicitly focusing on nurturing digital talent. They are centralizing some teams in regions or at a category level to give them a sense of community and career tracking. They are delivering digital academies with creative, hands-on curricula.

We are asking our clients to assess themselves on these six criteria. When they do, it becomes clear that just adding new tools or changing one’s agency mix is not sufficient to drive the change. They need tough decisions on the culture, pace, and style their organizations should have. They need alignment on how they want to strategically compete. It often comes down to how an executive team manages itself.

Has your executive team had the honest discussions needed to foster sufficient digital change?

Written by

No Comments Yet.

Leave a Reply