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Friday 2 December 2016

Is your marketing failing? Why conversations make more sense than ads

Your marketing is failing, and you don’t know why. Your brand values are declining, despite enormous ad spend. The TV ads are great—one got an award at Cannes!—but the product is still not flying off the shelves.
What do you do? The usual answer is “spend even more money.” But throwing more dollars at a tired old strategy is not going to get you the results you need.
The truth is, traditional advertising just doesn’t work as well anymore. It’s always played a role in bringing awareness of a product, but modern marketing needs so much more than that. And many consumers today no longer trust advertising, turning instead to social media and user reviews. According to Nielsen, 83 percent of consumers trust user reviews, the highest percentage of any content category; branded websites come in second at 70 percent. To be successful in this environment, a brand needs advocates who will talk up their products on Twitter, Instagram, and Facebook. They need an ace content marketing team to fill their website with informative content that’s not obviously sales-y. What they don’t need is more “creative” TV and print ads that actually do very little to sell the product.
In short: they need to own conversations, not buy ads. But to do that requires organization-wide change that many traditional marketers aren’t ready for.
When ads fail, conversations work
The idea of marketing-as-conversation isn’t new. Even in the golden age of TV advertising, the point of any ad was to generate word of mouth—and back in the day, a lot of them did. Super Bowl ads in the USA sparked conversations at work. Great breakthrough creative still does, but it moves less product than it once used to.
In an era of fragmented audiences and distracted, multi-screen viewing habits, TV ads simply don’t have the reach and effectiveness of the past. But that doesn’t mean that there aren’t still ways for marketers to make a splash. After all, they’re the ones on the front lines of digital transformation, observing firsthand the deep changes in how their customers use technology. Audiences today crave authenticity and relevant information. They want to converse, not to be talked at. Ads as entertainment can be fun, but are less important than relevance and usefulness.
That’s why marketers on the cutting edge are taking that old-school idea of capturing attention and enhancing it with modern tools of customer relationship management (CRM). This approach mines user data for insights on how consumers would like marketers to engage with them. Done well, this approach yields an interaction that is seamless and organic.
Creepiness: the conversation-killer
Of course, there are a lot of wrong ways to incorporate user data as well. Often they can be traced back to the same source: a CMO who loves to throw around the word “digital,” but doesn’t understand the full scope of the change that true digital transformation entails.
Many companies track user data, but very few of them are able to turn it into actual insights about the customer—or into advertising that’s creative or cool. Instead, they make lazy retargeted ads that follow the customer around until they almost regret visiting the company’s site to begin with. In a survey of 1,000 US internet users by Leadpages, more than 41 percent said they would never click on an ad that seemed based on their personal data or search history, no matter how good a deal was advertised. This lack of trust is what happens when marketers unthinkingly apply 21st-century technology to a 20th-century concept of what advertising is.
To be fair, it’s not hard to understand why people mess this up. Facebook lets marketers target ads based on from 98 different data points, which range from the prosaic (gender, age, education level) to the invasive (“users in long-distance relationships” is one of the most creepy—how does Facebook know that?). If a firm lacks a coherent digital strategy, it’s tempting to just click a bunch of these checkboxes and claim that that makes your marketing “data-driven.”
True data-driven marketing improves the customer experience instead of making it creepy. However, it takes a little more work than simply checking boxes. It also requires data-sharing between marketers, advertisers, and others on a level that many organizations simply aren’t set up to do.
Listen to the data—really
One great example of an industry embracing this is infant nutrition and baby care. One category insight (supported by data) shows that in the first 2-3 months of pregnancy, women are reluctant to talk with friends or family, but are hungry for information about pregnancy. They would post on anonymous online forums, visit parenting websites, and so on. That was the data, and here’s what it meant: early on in the pregnancy, women were much more comfortable engaging with strangers than with their loved ones. For cautious and respectful brands, this is a huge opportunity.
So rather than pouring money into a “creepy” retargeted ad campaign, or a series of expensive TV commercials, smart brands have focused on creating and engaging in relevant conversations: What should you expect when you get pregnant? What really happens to your body? What does this mean for your life, career, finances, etc.? One innovative way a company used this data was by creating a call center staffed by mothers who could answer questions for expectant mothers. This is the entry point into a robust CRM program and a long-term relationship with the customer.
This kind of effective, non-invasive, customer-friendly program is really the future of data-driven marketing. That future won’t be possible at any organization, however, without support from the top for a wholesale change in how marketers do business. For this kind of initiative to work, marketers need to educate executives about digital transformation. They need to be clear what the role of advertising is (awareness building) and how marketing is much broader and more complex than just being promotional.
This should be the easiest part of the change, but for many marketers, it is actually the most difficult.
Talking ‘bout my transformation
To make the significant change from advertising to data-driven conversation marketing isn’t easy. It is often wrapped up in a broader digital transformation theme within a company. Most marketers understand that digital transformation is going on, but they’re terrible at bringing it up in board-level discussions. Many senior marketers are comfortable updating their senior executives on a campaign or going to market with a particular product. But as soon as the topic turns to the recent massive changes in consumers’ relationship with technology, they lapse into opaque marketing jargon. Why bother getting into all this stuff anyway? It’s just easier to try to impress the boss with cool ads.
But we’ve reached a point where it’s no longer reasonable for marketers to stick their heads in the sand. According to one McKinsey study, companies who use analytics to improve their customer experience increase their revenue by 5 to 10 percent and decrease their costs by 15 to 25 percent in only two to three years. It would be insane to leave those sorts of gains on the table just because you don’t know how to ask your boss for them.
The thing holding marketing back isn’t a lack of budget or of tech tools or of knowledge about what needs to be done—it’s a lack of experience with change management. CMOs should be leading the sort of organization-wide change that’s needed to reap the benefits of modern, conversation-centric marketing. But too often, the traditional marketers in these roles are too hidebound by convention to imagine the changes that must take place, or else they’re simply too inexperienced with large transformations to understand how to implement them. This has to change. In 2016 and 2017, companies need CMOs with the vision and organizational know-how to truly manage change. The futures of their organizations depend on it.
With contribution from the Hippo Thinks research network.


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