4 ways to find out how much digital is enough

By Greg Paull, Co-founder and Principal, R3

In a recent R3 survey, 63% of senior marketers in Asia Pacific expect to move budgets from traditional to digital in the next 12 months. 46% are moving budgets from offline to e-commerce.

With digital the mainstay for not only leisure and entertainment, but retail, health, education, and now even work, the debate around how much marketers should shift their budgets online is alive and well.

Is “more” better?  And if the answer is “yes,” how much is enough?

The focus on driving business results as opposed to brand building is the argument for digital. Reduced revenue targets caused by falling levels of disposable income and consumer spend makes “nice to see” campaigns a luxury only the biggest budgets can afford. Digital is a medium where every click, impression and pathway leaves a trail. As such, the goal post has shifted away from intangible goals to checkout.

With this in mind, we believe there are some important steps marketers should go through to optimize their investment.

…. Studying the success of competitors and non-competing category leaders can provide informative and actionable insights which brands can use to transform their approach to digital channels and content. You don’t know what you don’t know…

1. Start with the consumer AND your competition

Good ideas can come from anywhere. Studying the success of competitors and non-competing category leaders can provide informative and actionable insights which brands can use to transform their approach to digital channels and content. You don’t know what you don’t know. Looking outside for better ways to leverage digital channels can help avoid costly mistakes or spot innovative approaches.

2. Find a partner, not a concubine

We’re helping several marketers right now identify more strategic digital agency partners. While it’s tempting to test out different agencies on projects, you will get a far better return by running a rigorous review to find a true partner, and then leveraging their strategic talent on a long-term basis – with the usual set of checks and balances in place for risk and reward. In this way, you’ll get better attention from agency senior management and better insights and long-term plans, not quick fixes. 

3. Digital is not just a percent of media spend

It seems everyone in the industry is obsessed with this line of debate. Where is the right balance?  For some of this, you can rely on your media agency and their analysis, but the truth is, you need a more over-arching digital strategy than just as a percent of media. Firstly, in terms of word of mouth, the medium is unmatched. In terms of corporate communications, there’s significant potential for reputation management. Most loyalty programs are now digitally led. The real question is not looking at your spend as a percent of media, but rather, is your business as a core philosophy truly aligned on digital principles? Digital is a way of life, not just a media plan.

4. Sales is no more the metric for digital than it is for TV

There’s still pushback in terms of ROI by marketers. It makes us wonder how much money would actually get spent on TV if the only core metric was sales. Again, the critical thing here is to establish the right metrics and build enhanced measurement tools over time. It’s easy, for example, to set up pre and post online research with exposed consumers and measure the impact as specific campaign has had on brand understanding and brand health. There are also plenty of general campaign metrics that can be benchmarked and analyzed over time.

One over-arching thing in all of this is training. 

Training within the digital agency to keep abreast of the technology.

Training with the marketers to get better insights and knowledge – and training by the digital agency with the other agency partners (creative, media and PR agencies) to lower the barrier and fear factor to their role.

The best marketers and their partners are doing this already. Are you?

Greg Paull is Principal and Co-founder of R3, a global independent consultancy focused on driving transformation for marketers and their agencies. www.rthree.com

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