You’ve Shifted Your Marketing Budget to Digital. Now What?

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For each of the last four years, brands have increased their spending in digital by double-digit percentages, while their overall marketing budgets have stayed roughly the same. As a result, you might think we’re seeing a gradual, happy transition from old-school advertising to the new kid on the block.

Or not so much. Unfortunately, CMOs are also reporting much dissatisfaction with their digital spending. Some are not happy with their contentNearly half aren’t satisfied with the investments they’ve made in automation. Even The Wall Street Journal quoted an industry exec, saying that the marketing tech stack is a “hot mess.”

Part of the problem is maturity. The technology is new and disjointed, the talent is rare and raw, and we just haven’t figured out how to put the pieces together. But the biggest reason may have less to do with digital itself, and more to do with something else—mindset.

As companies grow and mature, they take on processes and value that enable them to succeed. We often lump this under the banner of “culture,” but it’s really more like DNA. It’s not what you’re like, but how you do things, how you create efficiencies, and most importantly, how you avoid and respond to stress.

Stress response and avoidance have been a big part of why some brands transitioned well to digital and others not well at all. When some discount store brands were confronted by digital rivals, they did what they knew best: discounted more. That often led to oblivion. When taxis were confronted with ride services, the heavily regulated industry tried to fight back, ironically, with lawsuits and regulations.

A big reason for these kinds of responses is that much of the senior leadership in business grew up pre-digital. As marketers, they are smart, talented people, but their DNA is reaching emotions, not dealing with the complex world of data. When threatened, they retreat to what they know. This isn’t necessarily a bad thing, because what they know is critical to success. (Digital natives, in fact, sometimes go too far the other way.)

Data doesn’t replace emotions, but emotions alone cannot build true differentiation anymore. Success, instead, comes from a varied approach that sees everything in the context of an unfolding journey, where media, creative, social, and more all take part in driving relationships.

True marketing transformation is not just a matter of shifting budget, it’s shifting an organization from a single approach to a new, plural mindset. It’s about changing process and culture to something more aligned with the full scope of opportunities. This takes a few steps.

Recognize your core. Organizations should identify their comfort zones and to some degree celebrate them. But they should not live in them exclusively. If you’re rolling out digital campaigns in same way you do TV, you’re not addressing the full scope of the opportunity. Traditional advertising can work in digital contexts, but only if digital is an equal partner.

Connect the dots. For years, at most brands, digital was a silo off to one side. Brands need to integrate digital-native processes with traditional ones. This means looking at things like commerce, deep content, and customer experience as big possibilities for action. Many a successful digital brand, such as Warby Parker or Amazon, is actually a service first, and a product or store second.

Hire digital natives and give them a seat at the table. Brands and agencies should be hiring more people familiar digital processes and giving them real authority. Again, don’t throw the baby out with the bathwater, but make sure all sides are represented. Nordstrom has done a great job in balancing its efforts by extending its terrific customer service into apps that make it easier to shop. That only happens if digital people have a real say in strategic priorities.

Update processes along with technology. Real digital marketing is iterative, not campaign-based. Done right, it often resembles a product development process, with constant improvement and intervention in unlikely places. Domino’s, for example, has a great app that provides transparency into delivery times, but it requires constant attention and updates to stay relevant.

The part that bears repeating, however, is that traditional and digital are not either/or propositions. Digital offers new opportunities, but it doesn’t supplant the old ones. While digital changes the playing field, it doesn’t alter human nature—and digital natives have just as much to learn as we have to teach.

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