Marketing in the Digital Age: How to Close the Leadership Gap

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Marketing has always been both a left-brain and right-brain discipline.

From a left-brain perspective, marketing is all about the data and quantification of results and measurement of ROI.

At the same time, marketing is a creative, right-brain pursuit. It’s about storytelling, emotion, connection, and a beautifully crafted message.

But now that we’ve entered the digital age, left-brain marketing activities have become super complex. We’re creating massive volumes of data. The data sources are fragmented. And the technology required to bring it all together involves complicated algorithms and analytics.

It can feel completely overwhelming and out of reach for many marketers. But there is a contingent of marketers who are thriving in the digital age and racing ahead of their competitors.

And they’re coming from companies of all sizes and across all industries.

Introducing the Customer Experience Quotient

Microsoft Advertising, in partnership with Advertising Perceptions, recently studied more than 200 marketers from companies of all sizes and industries.[i] We found that the marketers in this study fell into two camps: those obsessed with understanding the customer decision journey and those focused on driving performance and ROI.

We also found a third camp comprising approximately 20% of the marketers in our study who are outperforming everyone else. These marketers are experts in both understanding the customer journey and using that knowledge to market to the customer journey. This expertise is what my Microsoft Advertising colleagues and I call Customer Experience Quotient (CXQ) maturity.

I recently got the chance to talk through this study and the insights we garnered from it at Advertising Week APAC. Here is how I unpacked some of this data and showed how you can improve your CXQ maturity to become a high performer.

Here’s what the high-performing marketers have in common

We discovered that high-performing leaders share three key commonalities that are helping them excel at CXQ marketing: the right talent, the right resources, and the right data and technologies.

  1. High performers use agencies

The first commonality is that they are not doing it alone. They’re engaging outside experts for their data strategy and technology. They’re giving agencies access to first-party data and asking agencies to get third-party data and deliver one view of the customer. Among the agencies we spoke to, 72% are getting access to all their clients’ first-party data.

  1. High performers have a designated CDJ lead

The second thing we found is that 91% of high performers have someone designated to lead the customer journey effort–and the rest plan to have one in the next year. This role has complete visibility across all customer touchpoints. This person also has the authority to drive decisions and improvements across the customer lifecycle to influence and optimize the customer journey.

  1. High performers prioritize data & technology

Finally, high performers prioritize data and the application of technology. Seventy-eight percent say that combining first- and third-party data is essential. They’re also much more likely to be experimenting with emerging media and are investing heavily in digital media.

Below, I’ll break down what these marketers are doing in terms of data strategy, marketing performance, technology, and privacy and personalization.

High performers inform customer-centric marketing with data

The go-to sources for first-party data for high performers include organic search data, site analytics and site visitor data, CRM data, and call center and ad-serving data. However, high performers realize that only 54% of the full customer picture is included in their first-party data and that they need third-party data to see what customers are doing and buying outside their channels. To fill in the gaps, they are looking to third-party data providers, market researchers, location data companies, and data management platforms.

Virgin Australia is a great example of this. They worked with Adobe and Microsoft to bring their first-party data together with third-party data on the Microsoft Advertising Network. As a result, they discovered that the Microsoft audience was willing to spend about 5% more, yielding an 18% YOY increase in revenue.[ii]

High performers are optimizing marketing performance

Seventy-three percent of high performers believe they have an excellent understanding of when their customers are mostly likely to purchase, as compared to just 23% of lower performers. High performers are applying data to map the customer journey and using that knowledge to create and personalize customer touchpoints along the journey.

On average, these marketers are enjoying 45% greater ROI on ad spend than their counterparts. They are driving sales, aligning purchasing processes to customer preferences, improving shopping experiences, and creating new touchpoints (which generate more insights).

They’re also using this data for dynamic and personalized ad creative and custom recommendations and cross-selling opportunities. Meanwhile, lower performing marketers are still focused on customer/segment targeting, media planning and behavioral insights.

High performers are mastering the right technology

You cannot have effective marketing these days without strong technology enablement. There’s simply too much data. Both high-performing marketers and agencies in our study are using cutting-edge technologies, including artificial intelligence, machine learning, and cloud solutions, to help them map and market to the customer journey.

Cloud solutions

Marketers must be able to combine data sources in the cloud, to action on the data. The top performers in our study are nearly twice as likely to use cloud data solutions. In addition, 73% of high-performing marketers are using martech partners, and 68% are using data management platforms (DMPs) to implement more sophisticated customer journeys.

One important thing to note is that we found that while agencies are being entrusted with client data, when we compared agencies with marketers in their adoption of cloud technology, we found that agencies have room to improve. While agencies are using DMPs and martech partners more than marketers, just 50% of agencies are using cloud data solutions, as compared to 55% of all marketers.

Artificial Intelligence (AI)

As a former philosophy teacher, I find AI fascinating. As a marketer, I find it essential. High performers are twice as likely to use AI technologies as low performers. High performers are using AI to help them engage with customers in a more human-like way through chatbots, digital assistants, and cognitive services such as natural language processing and visual recognition.

When we look at the high performers in our study, cognitive services are giving them the biggest bang for the buck, with 88% listing cognitive services as delivering an improvement to customer engagement (as compared to just 29% of low performers).

Machine Learning

Machine learning, a subset of AI, is an essential marketing tool. High performers are using machine learning to achieve two times greater sales and revenue lift. Machine learning is helping high performers be more efficient by going through data, detecting patterns, and enabling predictive models. Machine learning also helps to reduce marketing grunt work such as lead scoring and A/B testing.

As we look to the future, 45% of high performers intend to increase their use of AI vs. just 10% of low performers—a worrisome trend that will widen the competitive gulf.

High performers are protecting privacy and data

Finally, high performers are very concerned about customer privacy and data protection. In fact, high performers are 4.5 times more worried about consumer backlash when it comes to privacy and data protection than their counterparts.

To deal with privacy, 50% of high performers have abandoned cookie strategies to rely on first-party data. They are reducing the data that they collect. Also, they’re not afraid to have frank conversations with customers and are up front with what they’re doing with data, why they’re doing it, and how it benefits customers.

So, how are you going to close leadership gap?

If you boil it down, to be a high performer you’ve got to have a data strategy, you’ve got to have the right technology, and you’ve got to find a partner to help you.

For starters, I recommend that you figure out where you are on the CXQ maturity model. Prioritize the collection and unification of high quality, first- and third-party data. Use smart technologies like the cloud, AI, and machine learning to help you make the most of your data and to create more engaging customer experiences. Look for solutions that have AI and machine learning capabilities built in. Foster trust and protect your brand by doing everything you can to safeguard data and privacy. And remember that you don’t have to do it alone. Rely on partners like Microsoft Advertising to help you.

[i] Microsoft and Advertiser Perceptions study of 213 marketers and agencies in the US & UK, December 2018–January 2019

[ii] Virgin Australia internal data, 2018, including Virgin Australia operated, codeshare and interline services.

Lynne Kjolso

Vice President of Global Corporate Sales at Microsoft
Lynne Kjolso is Vice President of Global Corporate Sales. A career search leader, Lynne has led sales, account management and operations teams for Microsoft Advertising, with a particular focus on small and mid-market businesses and partner channels. Lynne has led search sales teams in North America, EMEA, and Asia Pacific, and has played an instrumental role in the launch of the Yahoo! Bing Network in the US, EMEA, Latin America, and Asia.
Lynne Kjolso

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