The New Marketing Reality

Consumers are in the driver’s seat.  The Web has put them there.

Today’s savvy consumers engage with brands on their terms – when they want and how they want.  They connect with brands through multiple channels – researching, comparing, and buying as they choose – on the Web, through the mail, over the phone, and in brick and mortar stores.

The most successful marketers are the ones who recognize and adapt to this new reality… relationships with today’s consumers occur at the consumer’s discretion.  The brand no longer calls the shots.

As marketers, we must be relevant, credible and accessible in all channels – wherever the consumer wants to engage.  As more and more consumers are engaging with brands across channels, our marketing efforts must be integrated.

A New Kind of Agency

The new realities of marketing require a new kind of agency.  Not a traditional media agency, not a direct marketing agency, and not an interactive agency, but an agency that can seamlessly link marketing in the offline world to marketing in the online world.  And it can deliver consistent, branded experiences and messages across all channels.

Catalyst is that new kind of agency.  We’ve been preparing for the new realities in marketing for more than a decade, combining the scientific targeting of traditional direct marketing with the engagement and interactivity of the Web.  A robust database environment supports a portfolio of Web, email, search, mobile and display capabilities.

And because analytics is part of our traditional direct marketing DNA, we’re leveraging intelligence derived from data to drive our online marketing work.  We’ve developed a powerful Web analytics capability that allows us to optimize our online marketing efforts in real time.  We understand when media and channels complement each other and when they compete.

Today, our work is truly integrated across channels.  And therein lays the challenge.  Not only must the customer experience at all levels be consistent, but marketers need a 360° degree view of consumers and their behavior across all channels.

Meeting the Challenge

Catalyst is positioned to meet this challenge better than any other agency.  Originally founded as a data-driven direct marketing agency, analytics is in our DNA.  We’ve been securing and analyzing customer information and segmenting and profiling customers for twenty years in order to deliver marketing messages that are relevant at the segment level.

In the coming years, as more consumers engage with brands online, the number of customer data points that can be tracked and measured will increase dramatically.  Each search, each visit, each click, and each registration will provide us with even more marketing-actionable customer information.  And as we link customer data in the offline world to marketing in the online world, such data will need to be gathered, analyzed, and leveraged across channels.

The marketing and analytics teams at Catalyst have already begun working with clients to develop databases, systems and tools that can provide a holistic view of customer behavior and relationships across all media and in all channels.  The days of delivering segmented messages in a single channel are fading as the Catalyst team develops capabilities that can predict behavior and deliver thousands of customized marketing messages to individual consumers consistently across multiple channels.

One of the real benefits of working in an agency environment is the constant exposure to new and different marketing challenges across a range of industries.  And while each industry is fundamentally different, the commonalities are what I am most drawn to.

Recently, I have spent time actively seeking those parallels…and given more thought to how I might use these insights to benefit our clients.

So think about this.  What do pet owners have in common with those who opt to have their oil changed on a regular basis?  How has the economy influenced these two apparently distinct consumer groups in common ways?  Sure enough, we see that spending during these tough times…on vehicle maintenance and on pet care…has been under pressure, though consumers are spending relatively less in so many other areas.

But the pressure is still there…and marketers have to drive repeat purchase activity and aggressively reinforce benefits, especially when it comes to premium products.  Based on our proprietary research in the pet arena, that means tapping into consumers’ emotions about giving pets the very best, given all of the emotional support that pets provide during these tough economic times.  In the oil change arena, the message is about the increased importance of maintaining your vehicle when cash flow is low…in an effort to avoid more costly repairs.

And I continue to believe that, when the economy tanks, the need to maintain relationships with customers is more critical than ever.  Rather than slowing down on messaging, marketers must acknowledge the situations that their customers face and showcase how continued engagement with their brand will help them weather the storm.

So once again, while the industries seem to be completely different, those who market to pet owners and oil change customers have more in common than at first blush.

Why is it that within most companies “Marketing” and “Sales” are competing disciplines that seldom (if ever) work together? We don’t believe in it. We believe, and have proven, that when Marketing and Sales join forces they can move prospects through awareness to consideration and, ultimately to the purchase decision.

The first step is to recognize that the process is a continuum and not linear because prospects are constantly defining and redefining their own needs. They choose to embrace or discard the marketing or sales message on their own terms.  Consequently, Marketing must be increasingly relevant, preference-driven and channel-neutral and Sales must be adaptive to changing conditions.

This is accomplished through a complete understanding of the prospect’s purchase process, as well as the marketers’ own sales process. The target audience defines the purchase process, and the sales process is defined internally. Marketing must develop communication strategies that serve each master based on how people buy and how their own Sales team sells.

If, after an initial contact, it’s determined that the target is a prospect, but not yet ready to buy, then it’s important for Marketing to continue the nurturing process and allow Sales to focus on the next best opportunity.

This means that Marketing must appreciate the time and process involved by people and companies who make purchase decisions.  And Sales must appreciate that contacting the prospect once is not the end of the consideration cycle.

To learn more, contact me and I’ll be happy to show how this will work within your company.

Consumers crave intelligent marketing, and they love it when we get it right.  That coupon arriving just when I was considering my purchase options?  Brilliant!   Your letter to me about how your particular product suits my needs?  Right on target.  But where were you when I was at the mall last week?  And why didn’t you stop me from buying that other product that isn’t as good as yours?

Indeed, consumers don’t simply want to be understood; they want marketers to be at their beck and call: I’m ready to entertain offers—right now.

As marketers, we lament the opportunities lost when we don’t understand consumers’ particular needs or their particular position within the purchase cycle.  If only we could gain direct access to “consumer context”—the when, where, and what of consideration—we could perfectly position our offers, perfectly time our campaigns, and provide the response mechanism most preferred by each consumer.  The result would be higher ROI for brands and more intelligent marketing for consumers—lower costs and greater surpluses for all.

Sounds like a dream, yes?  Well, it’s one that might be right around the corner.  In the digital environment, information about consumer context is increasingly available.  Many consumers are already quite willing to tell us about themselves:  They tag their information on Flickr and Technorati, post personal details to Blogger and Twitter, allow TripAdvisor and Yelp to track their preferences, and let Loopt and Whrrl stalk their physical movements the globe.  Even in the offline world, consumers answer the question “May I help you?” both politely and honestly.

For some brands, gathering consumer context is already easy: American Express, Amazon, Apple, and Wegmans Foods Markets, all have trusted access to my own consumer context nearly every day. These firms benefit from my greater attention and consideration of their offers, and I benefit from their greater relevance to me.  Keeping these brands in the know is easy: they all track my purchases and interactions across all channels.

For most consumers, and most brands, updating consumer context is too hard.   While the social media revolution was sparked by online junkies (like me) who tweet, tag, scrobble, and upload the details of their personal lives online, it’s still simply too difficult or time-consuming for the average consumer to make this type of “about me” information available on a daily basis.  And that may be a good thing—for now—because while consumers experiment with how to efficiently provide details of their context, most marketers still have a long way to go when it comes to grokking this information.

Brands need to be available when a consumer’s context puts them in a position to buy, regardless of the time, place, or channel—traveling in a cab, standing in a store, or up late surfing on the couch.  Right now.

Without information about consumer context, ubiquity then quickly becomes the most important attribute for brands: the ability to be everywhere a customer might want them, at the moment they want, with the offer they desire.  Ubiquity used to be easy: ABC, NBC, CBS.  Nowadays, however, it means establishing a presence in thousands of locales throughout the digital landscape.

Marketers need to manage more channels, understand how brands function in each, and manage the whole environment in real time.  Start now, because it’s only getting worse: channels are proliferating fast, and the sooner that marketers understand them, the easier it will be to digest what’s coming next.  Companies and marketers not engaging in the digital marketing landscape—lacking ubiquity to the consumer—do so at their own peril.  And participation in these channels is also the key to understanding how your brand can capture and capitalize consumer context. The race is on.

With ubiquity comes one more marketing imperative: ambiance.  Since brand participation in these new marketing channels is spotty and inconsistent, it’s critical that brands remind their customers of their presence.  Use each channel to inform consumers that your available everywhere: confirm to the customer that you have a mobile website; invite them to participate online; educate them that your call center is still open 24/7.  Consumers do what’s easy and present within their context, so make sure your brand is available in all the new marketing channels (ubiquity)—and that the customer knows it (ambiance).

Search is a strange new animal in marketing landscape. Why? Because it represents the closest alignment ever achieved between the goals of consumers and the goals of marketers.  In no other medium do consumers broadcast their intentions so clearly than in search – intentions to window shop, to buy, to refer, to rate.

And in no other medium are marketers’ intentions so clearly discerned — even from the advertisements themselves.

• Ad placement indicates the relative investment a marketer is willing to make to acquire a customer – which is, in itself, an indication of the advertisement’s relevance to the consumers search request.
• The text of the advertisement makes clear – in 35 words or less — the marketer’s value proposition.
• Landing pages are constructed to provide immediate verification of whether marketers and customers are aligned around the same objectives, and to provide the shortest purchase path for a qualified prospect.
• Even the presence of competition, and the strategies that competition is using to differentiate itself, are more apparent in search than in any other marketing method.

Marketers and consumers have the same goals: they wish to invest as little as possible in search, privacy, and acquisition costs. Because of that, search marketing becomes a virtual utopia within the marketing landscape.  It’s quite possible that search-based marketing costs approach the theoretical minimum cost required to acquire the target audience.  Even the consumer’s investment (e.g. search and privacy costs) is as small as it might ever be.

When user and marketer goals are so closely aligned, an interesting side effect results: honesty.  No longer are marketers required to interrupt and deceive their customers into considering their products. No longer are customers forced to hide their desires – which creates added cost for both consumer and marketer.

But this honesty builds efficiencies far beyond the marketing landscape as well. When consumers are honest about their intentions, and when marketers are able to believe what consumers tell them, there’s an opportunity to truly optimize the supply chain as well as the marketing channel. And where does an optimized supply chain lead to? Lower costs.

To the extent that direct marketers – indeed all marketers – embrace this concept and focus on the efficiency within their campaigns, customers will be increasingly motivated to share accurate information across the entirety of their consumption profile. That will lead to lower costs for marketing campaigns, lower costs for manufacturing, and lower costs for service delivery. Everybody wins: consumer surplus rises in the cost of doing business goes down.

Search still represents a tiny portion of the overall marketing spend, but it has a great deal to teach us with regard to user intentions and marketer goals.  If we could develop that sort of honest conversations that characterize search marketing within other marketing channels,marketers and customers would benefit, and operations managers and CFOs would see results as well.

This sort of “aligned intention marketing” (AIM)–where customer and marketer goals are in synchronicity — is the most important lens through which new marketing channels should be viewed.   Search marketing is merely the tip of the spear; it’s the best current example of how these new marketing tools might be used.

Donna DeClemente has a nice summary of a recent webinar: Forrester’s Five Year Interactive Marketing Forecast.

A taste:

• Search Marketing is expected to triple in 5 years to over $25 billion.
• Online Display ads will reach almost $14 billion. The ability to create rich media ads will help this growth.
• Email marketing spend will shift to integration which means that email will start to be more integrated with other mediums.
• Online video has the steepest growth curve of any of these channels because it has a very low adaption of around $450 million today. It’s an easy medium for marketers to understand and something that they’re familiar with. Interactive videos will also help see this medium grow.
• Emerging Media which Forrester defined as social media, mobile marketing and in-game advertising and states that social media is poised to have the most significant growth of these three elements. Social media is providing many marketers with a way to help get them interactive.

Dell may have lost its top spot in PC sales, but Sunday it took a $4.5 billion step to lead its industry into integrated marketing. The Texas-based computer company announced a partnership with WPP “to create a new global integrated marketing and communications agency” with both “the creative horsepower and ability to measure the business impact” of its work. Vice President of Global Marketing, Casey Jones, said the new venture, dubbed “Project Da Vinci,” will allow the agency to “spend 100% of their time thinking about our customers.”

The press release on the Dell Web site outlines many “key observations” that motivated the move. Here are a few from their release that Catalyst Direct has also been evangelizing as part of DM 2.0:

• The rationale for one partner – a “partner” is someone who works with you, not for you.
• The Internet revolution – when you have one billion people online and another one billion joining them over the next four years, it becomes very important to have the right analytics, the right team and the ability to build campaigns in days, rather than months.
• The importance of analytics – improving shareholder value is the ultimate award for all of us to win. …We don’t mind winning industry awards, but our customers and our shareholders are our focus, not what we can win in Cannes. A combination of great analytics and creative is key.
• The investment in our future – the agency will invest in our relationship as much as we do in them. It’s mutual from day one.

Commenting on Dell’s decision to create an agency, Sam Hart at Charles Stanley told Forbes.com he isn’t sure this unusual move makes sense for all companies. Clearly not everyone has $4.5 billion to spend. But this is just more proof that DM 2.0 is here to stay.