The Five Challenges of Digital Marketing Transformation
"Digital transformation" has become a popular buzzword - senior executives and experts are all talking about it.
Some enterprises are already leveraging the benefits of digital transformation, while others struggle with incorporating the necessary changes into their business processes.
Digital marketing transformation is a very broad term: there's no single definition of it, and expert opinion on it is highly divergent.
Ivan Menezes, CEO at Diageo, says, "it's not about doing 'digital marketing', it's about marketing effectively in a digital world."
Brian Solis, a principal analyst at Altimeter Group, defines digital marketing transformation as "the realignment of, or new investment in, technology, business models, and processes, to drive new value for customers and employees, and more effectively compete in an ever-changing digital economy."
In today's world, it is essential for enterprises to stay current as their competitors carry out digital transformation and increase their revenue and market share.
Tim Howell, a digital marketing strategist, says, "the majority of marketers understand the need to evolve their businesses, they recognize the urgency in changing how they do business, and they know that their competitors are having the same conversation."
Digital marketing transformation is exactly what enables enterprises not to stay competitive. 27% of senior executives believe that digital transformation is a matter of survival.
At the same time, 33% of enterprises see digital transformation as a real challenge.
Why is digital marketing transformation considered so complex? When carrying out digital improvements, CMOs may encounter various challenges. In this article we will discuss them and ways to overcome them.
The Challenge of Big Data Management
The term "big data" refers to quantities of information so large that they are extremely difficult to process using traditional software and databases. Effective big data management is crucial for digital marketing transformation.
Large enterprises collect and work with vast amounts of data, which is a challenge to manage and process. In fact, many corporations manage various siloed systems that contain only scraps of information about customer operations, behavior and so forth.
Customer data is at the core of any top company. Leaders like Facebook, Airbnb, Uber, and Amazon achieved success because they leverage all of their customer data.
Facebook, for example, has a data science team that analyzes the habits and behavior of millions of people.
Efficient operation is impossible if data is not organized into a single system. This means that effective management of big data defines the company’s success.
In some cases, the best solution is to gather and centralize big data into one platform. If the data is stored in one place, all staff members can access it whenever they need it. This enables better management and processing of data.
There are various big data solutions that help organize vast amounts of information. Examples include Microsoft's big data solution, Google Cloud Platform, Oracle Big Data Solutions, and many others.
All of these have some common features:
- They enable organizing and managing big data in the cloud.
- They provide reliability, flexibility, and faster scalability across the entire environment.
The Challenge of Finding the Right Team
Digital marketing transformation requires people with specific expertise in the digital sphere to lead and manage organizational changes. These modifications may include, for example, the adoption of artificial intelligence, virtual and augmented realities, the Internet of Things, and many other technologies.
People with traditional marketing educations do not have the required knowledge to conduct digital transformation effectively.
Consider Adobe’s survey, “DIGITAL DISTRESS: What Keeps Marketers Up at Night?”. It indicates that senior executives don’t feel confident about their digital capabilities. Less than half of the questioned marketers claimed that they were proficient in digital marketing.
Around 52% of CMOs consider their major barrier to digital marketing transformation a lack of familiarity with technology.
In the realm of digital marketing transformation, more focused marketing roles with more specific responsibilities should be introduced to stay agile.
According to Gartner, 19% of companies are planning to appoint a chief digital officer. Some examples of other relevant roles could be: Head of Digital Marketing, Digital Optimizer, Chief Data/Information Officer, and so forth.
Staff expertise directly influences a company’s ability to incorporate new technologies, and consequently, adapt to constantly changing business demands. Hiring the right people with the correct knowledge is a critical factor in carrying out digital marketing transformation.
The Challenge of Understanding Digital Customer Behavior
Today’s digital customers expect superb experiences from companies.
These high expectations drive innovation and cause enterprises to go out of their way to meet customers’ needs.
Forrester Research defines an enterprise prioritizing customer experience as a company that “focuses its strategy, its energy, and its budget on processes that enhance the knowledge of and engagement with customers, and prioritizes these over maintaining traditional competitive barriers.”
For successful digital marketing transformation, the customer must be a central point for all changes. To enhance the customer experience, digital improvements must be personalized.
The challenge is to understand the specific needs of a digital customer as well as to outline the whole customer journey.
According to the "Digital Transformation Report" by Altimeter Group, technology is not the most important factor in digital marketing transformation. Digital customers’ expectations and experiences influence digital transformation to a greater extent.
When deciding to shift to digital, CMOs should analyze what their customers actually lack. They should then find out the actual indicators of how digital transformation will help meet these needs and improve customer experiences accordingly.
Additional research from Altimeter Group, "The 2016 State of Digital Transformation," shows that 55% of executives responsible for digital transformation think that “evolving customer behaviors and preferences” is a crucial factor for change.
Yet 71% of marketers state that the biggest challenge is understanding customers’ behavior and their impact.
The Challenge of Overcoming a Digital Marketing Paradox -
"Transformation is Important but Not Urgent"
Senior executives talk a lot about the importance of digital marketing transformation.
The paradox is that as long as the enterprise’s revenue is high enough, and senior management is satisfied, executives tend to think that there is no urgency to this process.
Meanwhile, other companies - likely including their competitors - are already introducing digital improvements, giving them a competitive advantage over those satisfied with the status quo.
To avoid losing market share to competitors, enterprises need to work out and communicate a clear vision for carrying out digital marketing transformation.
According to the results of Capgemini research, "The Digital Talent Gap: Developing Skills for Today's Digital Organizations," 87% of organizations think that digital marketing transformation provides a competitive advantage.
Moreover, Capgemini Consulting and MIT Sloan Management Review showed that 78% of senior executives consider digital marketing transformation an essential part of their company's growth. Furthermore, 51% of CMOs believe that it is critical to incorporate digital improvements into their business processes within next 12 months, and 63% of respondents state that the speed at which innovations are introduced in their companies is too slow.
Digital marketing transformation really is a matter of urgency. If adopted in a timely manner, it can help outpace competitors and gain market share.
The Challenge of Shifting to Mobile
The customer journey is influenced by mobile technologies, which are developing and spreading rapidly. This fast development contributes to the fact that digital customers’ needs are accelerating.
Software that not long ago was used only on PCs is now expected to be accessible on mobile devices. Meeting digital customers’ mobile needs is a real challenge for many companies.
Merkle | RKG analyzed Fortune 500 companies websites, and found that around half of them did not comply with Google’s mobile-friendly standards. As a result, these companies may lose their position in Fortune’s ranking.
Google has already announced that it will be shifting to mobile-first indexing, meaning that search engine result pages will be based on mobile content, and will give preference to mobile-friendly websites.
This will have a serious impact on how business is conducted.
According to eMarketer’s prediction, “by 2019, 65% of the US population will be mobile users.”
Wrapping it Up
In today's world, digital marketing transformation is a necessity for enterprises to remain competitive and win new markets.
However, the transformation process involves certain pitfalls.
Here is a summary of the challenges of digital transformation we discussed in this article:
- Management of enterprise big data, especially when organized in siloed systems, is a real challenge. This is made easier when all of the data is collected in a single platform. This should be combined with a big data solution to help better manage customer data.
- Without an experienced team, digital marketing transformation is impossible. Employees need more specific knowledge of technology and digital customer requirements.
- Many enterprises have problems with estimating and meeting digital customers’ needs. Improvements should be driven not by digital technologies, but by the customer experience, and what is needed to improve it.
- Many enterprises think that digital transformation is not urgent, but they are actually wasting precious time and losing ground to competitors.
- Digital transformation is influenced by mobile technologies, but many companies still underestimate their importance, and as a result, lose potential clients.