Editor: To begin, what is “digital marketing”?
Dave Calibey: Through their marketing practices, companies understand, engage, motivate and ultimately satisfy their customers. Digital marketing simply utilizes Internet capabilities – email, websites, mobile apps, online usage statistics and so on – to help accomplish these same goals. Digital Marketing is the use of all that the web has to offer, now sometimes called the “digital ecosphere”, to accomplish marketing’s four Ps: Product, Price, Place, and Promotion.
Editor: What conditions have precipitated the emergence of digital marketing?
Calibey: The first and most paramount condition is the emergence of an online audience; the widespread and growing use of email, websites, search engines, social media networks, and smart phones.
Next is the creation of tools that enable understanding of that audience and effective engagement of target audience segments. I include here tools that accumulate information about the audience and its behavior.
Finally I’d throw in the belief by senior business leaders, buttressed by marketers growing ability to demonstrate ROI, that it’s worth shifting traditional marketing resources to engage customers and prospects online.
Editor: Why is it important to distinguish digital marketing from more traditional forms of marketing?
Calibey: I’m not sure that it is. It certainly shouldn’t be over time. It probably is today because digital marketing’s relative newness and continued rapid evolution has resulted in a scarcity of expertise. That it’s perceived as being different is somewhat ironic, however, because it employs the same concepts and principles as traditional marketing. In many ways it’s digital nature allows marketers to employ traditional marketing tactics with more information, precision and feedback. Eventually all marketers will be digital marketers.
Editor: Does digital marketing supplant or complement the more traditional forms of marketing?
Calibey: In some ways, both. In some ways, neither. Just as you might support one direct mail campaign aimed at a specific target market with TV ads but not another, you should think of digital marketing as another channel in your marketing mix. It may be appropriate for some campaigns to be completely online and others to have no online component while most are cross-channel. I think the notion that digital marketing is supplanting traditional marketing largely stems from seeing marketing dollars shift to accommodate it as a new channel.
Editor: What can one accomplish with digital marketing techniques that cannot be accomplished with more traditional forms of marketing?
Calibey: What excites marketers most about digital marketing is the ability to accurately track the effectiveness of their marketing efforts and pivot accordingly, often in real-time, and the ability to personalize the marketing experience based on knowledge of the target.
When I execute an email marketing campaign, I can quickly know how many and who opened the email and clicked on the call to action. I can track their progress through the website, if that’s where the CTA takes them, and even whether their engagement leads to an eventual conversion – order, download, sale, or such.
Before launching the entire campaign I can send a subset of the emails to test alternative designs, know which is more successful and send it to the remainder of the email list. On a website I can actually shift the design in real-time based on results, so that more visitors see the most successful design. By the way, I can do all this without significant investments in technology.
With the requisite knowledge store and personalization engine in place, however, I can take things a step further and vary the experience a visitor receives when they come to my site based on my knowledge of them – the “Amazon.com” model of one-to-one marketing.
Editor: Speaking of investments in technology, what are the critical technology components of a digital marketing program?
Calibey: Some components will vary based on the program and you’re best relying on vendors for others. You’d be generally well advised to have use of a:
- Web content management system
- Social management dashboard and listening platform
- A/B or multivariate testing tool
- Cross-channel analytics database and reporting tool
- Digital asset management system
More advanced components include a personalization and recommendation engine. Remember, however – its not about the tools. Its about the talent of the craftsmen using the tools.
Editor: What skill sets are required then for the modern day crafstmen using these tools?
Calibey: In addition to the skills sets required by traditional marketing programs, for effective digital marketing you need:
- Data analysts to help accumulate, organize and utilize your marketing data
- Customer experience specialists to help optimize the interactions your audience has with you online
- Writers and editors that specialize in online content creation – many old-school marketing organizations don’t recognize how their brochure content has to be rewritten for online use
- Web designers and front-end developers to create compelling user interfaces and online tools
- Digital marketing “scientists” who are dedicated to improving campaign results by testing and experimenting; who stay abreast of the latest theories, tools, and industry developments
You might also need an evangelist to continually advocate for and explain digital marketing to your business leaders.
Editor: What types of results should business leaders expect from digital marketing professionals?
Calibey: The expected results will vary by industry and business model. Those selling transactional products (like auto insurance) directly should have greater expectations than those selling relationship products (like annuities) through third parties. But all executives should expect their marketing professionals to develop realistic goals and pragmatic strategies based on experience and business knowledge (in other words, avoid hype) and to support those with metrics and analytics.
Editor: What type of support should digital marketing professionals expect from executives and subject matter experts within their organization?
If marketing professionals approach their challenges in the way described in the previous answer, they should expect advocacy from executives and collaboration from SMEs as they pursue test-and-learn marketing initiatives and eventually improve business results.
Editor: Do businesses typically hire dedicated staff for digital marketing initiatives or train existing staff?
Calibey: Some businesses try to utilize their existing staff with mixed results. It’s surprising that a lot of very competent traditional marketers have trouble making the transition. Other companies look to hire from the outside first which presents its own set of challenges. Too frequently new hires don’t know the business, undervalue the existing marketing staff, and have trouble adjusting to the pace, priorities and processes of the organization.
As digital marketing works best when coordinated in cross-channel campaigns with traditional marketing, your digital and traditional marketers need to work hand in hand and develop mutual respect. I believe a mix of hiring and training is most effective. Especially if you believe, as I do, that all marketers will need to understand digital marketing in the future.
Editor: Indeed, the future looks bright for digital marketing. For instance, a recent Gartner study predicts that by 2017, CMO’s will spend more on IT than CIO’s…how is the move towards digital marketing affecting the relationship between marketing and IT staff, given the focus on technology?
Calibey: Well first off its introducing them to each other; traditionally Marketing did not have a lot of need for IT. Unfortunately, I think the attitudes expressed in the Gartner article accurately reflect how Marketing tends to view IT once they start working together. It’s hard for Marketing to understand why it can design a brochure and have thousands printed and distributed with its own timeline and budget but has to wait in a queue, suffer IT budget constraints and governance, and endure a code-release cycle to put a PDF of that same brochure on its website.
In addition to budget and process, there’s the issue of talent and experience. Most IT shops have not trained or hired the talent necessary to create persuasive online experiences. I fear that most of Marketing’s IT dollars will be spent outside with interactive agencies, cloud analytics vendors, and the like.
Editor: What business processes likely need to be examined and possible realigned to support digital marketing?
Calibey: I think it’s helpful for those in financial services, where there is no physical product, to think of themselves as information companies. After all, its information that customers, distributors, analysts and everyone else regularly seeks from them. Many financial services firms are waking up to that. Others – not so much. It takes a real commitment to understand what information is sought, to develop or acquire it, and to routinely, responsively make it available in a way that it is easily found, easily consumed, and compelling. For those in regulated industries, their compliance processes will need adjusting at a minimum.
Beyond that, the processes that Marketing uses to develop campaigns and measure results will need adjusting. As will the processes by which online-generated leads are qualified and pursued.
Editor: Does the emergence of digital marketing affect the relationship, generally speaking, between marketing and sales units?
Calibey: It should, but in a positive way. Done correctly, digital marketing should extend the sales reps reach, presence and capacity. It should increase sales rep productivity by providing qualified leads, handling second and third-tier sales opportunities online, and helping to target activities.
Conversely, information about sales activities can make digital marketing efforts more effective helping to personalize online experiences and hone ROI measurements.
For all this to happen it’s important that Sales leadership buy into digital marketing goals and efforts. Otherwise, if seen as a distraction from proven sales methods, they will fall short.
Editor: What considerations must insurers make when developing a digital strategy?
Calibey: All businesses that form digital strategies should give utmost consideration to the desires and concerns as well as the online habits and behaviors of their target audiences. They also need to consider the brand impacts of their digital efforts, or lack thereof.
Beyond that, insurers that are manufacturers but sell through third parties need to consider their role in the sales and service process and aim their efforts appropriately. Insurers need to consider the need for content review by regulators and distributors and the requirement to accurately locate and present that content in context years later.
I think that insurers that are looking to develop a digital strategy online should look beyond their products and engage their online audience about the results of owning the products – confidence in the future, piece of mind about the economy and retirement, security for their family or employees. Many insurers are already there.
Editor: What are the primary challenges that insurers face when implementing a digital marketing program?
Calibey: Some insurers have a tough time thinking about their offerings and value proposition from the perspective of their customers and distributors. Many lack the data necessary to analyze their targets and measure their campaign effectiveness. Still others have difficulty recognizing that they are not just compared against other insurers with their online presence – they are competing for the attention, approval, and loyalty of their customers with the best sites and most creative digital marketing campaigns. Unmet, any of these challenges will undermine a digital marketing program.
Edtior: What steps should insurers take to ensure success in this realm?
Calibey: Like with all marketing endeavors it’s important to:
- Know what you’re trying to accomplish
- Make sure you have the appropriate resources (budget, talent, technology)
- Gather and use as much information about your target market as you can
- Test and learn, measure and revise
- Be creative
Editor: Can the insurance industry take any cues from successful digital strategies developed for other industries?
Calibey: Absolutely, and since it’s generally lagging online as an industry there are many examples from which to learn. Even those in the B2B marketing space, which tends to be more cautious, can benefit from studying successful B2C programs despite their hesitation to do so. After all, in both situations there’s a person on the other side of the glass experiencing your UI.
Editor: Where is the greatest potential for innovation with the move towards digital marketing?
Calibey: There’s currently a lot of talk about “gamification” of user experiences. I think there remains much to learn from kid’s “edutainment” software in this area, however. As a genre edutainment software engages its users, captivates them even, while they are solving problems and learning (in some cases unwittingly.) Companies that are looking to captivate, educate, and create loyalty with their digital marketing could turn there for inspiration.
After 30 years in financial services, the last 15 with a major insurer, Dave Calibey is now the principal of BigThunk, a digital marketing and eBusiness strategy company. Dave draws upon his 25 years as an IT leader and a decade of consuming IT services as an eBusiness marketing executive to offer some unique perspective and advice.