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Sarah Willersdorf has been a partner and managing director and global head of luxury at Boston Consulting Group since 2015. The following quotes from her about marketing’s imperatives in the post-pandemic moment have been lightly edited for length and clarity.
How has Covid-19 disrupted marketing?
Covid-19 has compressed a decade of marketing evolution into just 18 months as consumers have raced online to do everything from purchase daily necessities to seek medical treatment. Today’s consumers are more digital, more focused on health and wellness and seeking brands that are sustainable and purpose-driven.
Consider these statistics: Adults aged 18 to 34 account for less than 10% of television watched, but they spend more than five hours per day on mobile devices; 40% of 18- to 24-year-olds put significant trust in influencer-promoted brands; and 78% of Millennials would boycott a brand for offending their beliefs.
More generally, 70% of consumers have higher expectations as concerns customized and personalized engagement (though they still want their privacy protected). At the same time, the data provided by third-party cookies—one of the critical supports of precision in digital marketing—has dwindled as the industry and regulators have reacted to growing concerns about privacy.
What’s the most effective way to respond to these disruptions?
It’s not easy managing brands across multiple markets and channels. Marketers have to keep track of numerous digital touchpoints as well as physical points of engagement, which are regaining importance. Each offers different opportunities and has different requirements and each generates enormous volumes of data that must be continually cleaned, matched and structured.
It’s even harder to determine which marketing initiatives are delivering the best returns and where to allocate marketing spending. Common data analytics approaches—econometric analysis, test and learn, consumer surveys—are all useful, but they all have limits. To overcome these hurdles, companies need data-driven marketing solutions. The best marketers use data for end-to-end measurement. They build an in-depth understanding of the entire customer journey and continuously optimize content. They make data-driven and digital ways of working the norm. With a data-driven approach, marketers can achieve a whole new level of growth, increasing revenue by 10% or more, while cutting marketing costs by as much as a third.
After 18 months of reacting and surviving, what can companies do to accelerate their digital maturity?
The first step is to augment and expand your digital capabilities. Our most recent research, which included 25 “belief audits” with experts, agencies and brands, as well as a quantitative analysis of input from senior marketing executives, identified two digital accelerators that today’s fast-maturing brands are using.
First, they’re building a virtuous cycle around first-party data to address privacy concerns and maintain customer value and trust. Our research has shown that companies that link all of their first-party data sources can generate 1.5 times the incremental revenue from a single ad placement, communication or outreach than can companies that have more limited data integration capabilities. They can also double the cost efficiency improvements of the latter companies. Of course, this needs to be done with consumer privacy and local regulation top of mind.
Second, they’re developing true end-to-end measurement capabilities that include predictive models to replace data from third-party cookies.
What kind of organizational change is needed to optimize digital maturity?
In addition to the technical accelerators, two organizational accelerators allow companies to reach higher stages of digital maturity quickly. First, companies should set up agile performance loops based on a test-and-learn approach. This will help them break down silos and make them better prepared to address future demand volatility. When big companies get agile right, productivity can improve by a factor of three and development costs can decline by 15% to 25%.
Second, marketers should secure new skills and resources to help ensure continuous improvement. Beyond the obvious need for more analytical and digital talent, B2C companies need to become content machines—and finding the right talent, structure and processes to do that takes time.
Although our analysis shows that the two technical accelerators have twice the impact of the two organizational accelerators, the four complement one another and speed overall maturity. For that reason, top digital marketers work on them together.
To learn more about data-driven marketing and how to enhance digital marketing capabilities, click here.