2016 Trends to Watch: Digital

Marketing Technologies
Digital marketing technologies blend into the
enterprise-wide digital agenda

Publication Date: 05 Nov 2015

Gerry Brown

Product code: IT0020-000160

2016 Trends to Watch: Digital Marketing Technologies

Summary
Catalyst
IT investments have traditionally been about the back office the underlying technology plumbing
that manages the core enterprise assets of procurement, stock management, supply chain, finances,
and HR. As products and services have commoditized the focus has switched to the front office how
well enterprises serve their customers. The latter is the domain of digital. This report details the key
issues, trends, and technologies that need to be considered when enterprises evaluate and define
their digital strategies.
Ovums Gerry Brown, Senior Analyst in Digital Technologies in Ovums Customer Engagement
research stream, outlines the key changes that are taking place and the actions management should
take to ride the digital wave rather than fear its force. This report is essential reading for senior
executives wishing to understand the challenges and opportunities for exploiting digital technologies
for strategic competitive advantage.

Ovum view
Digital is hugely important for modern enterprises. It dominates the discussion as large enterprises
debate how they should defend themselves against organizations such as Uber, Google, and Airbnb
that threaten to disrupt established business models with low-cost digital alternatives.
The availability of scalable big data systems at an affordable price is the key technology enabler that
allows digital start-ups to take on established giants that are encumbered by cumbersome legacy
systems. Big data, innovation, and ambition, which the digital start-ups have in abundance, are at the
heart of the digital revolution. Enterprises urgently need to create defensive strategies to counter this
threat.

Key messages

The digital trends Ovum identified in 2014 in customer data management, cross-channel
communications, customer journey management, customer experience, and digital
transformation continue to affect all enterprises in a major and fundamental way.

Digital marketing platforms have moved to the next stage of their evolution and performance
marketing, cross-channel communications, and analytics and personalization are now critical
capabilities for large enterprises.

Social and mobile are shaping the new digital operating environment and social marketing,
custom audiences, and social measures are the new digital imperatives.

Recommendations
Recommendations for enterprises
Enterprises need to embrace digital rather than fear it. However, time is of the essence. Those
enterprises that have already started the process are moving further ahead; digital learnings,

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2016 Trends to Watch: Digital Marketing Technologies

competencies, and capabilities tend to grow exponentially rather than in slow, linear fashion. It is
important that business strategy drives digital rather than the reverse, which too often leads to a false
start. Digital needs to be embedded into the roots and fabric of the business rather than limited to the
periphery. This report should act as an important starting point for enterprise activation of compelling
digital strategies that are aligned to the latest changes in the digital marketplace.

Recommendations for vendors

Vendors will serve their enterprise clients best by providing a wide range of digital products and, most
importantly, professional services. Advisory services are important because it is only through
education, learning, discussion, and negotiation that enterprises will be able to frame their
requirements in a clear combined business and technology context. Vendors need to be trusted digital
advisors.
Digital is a vast technology area and collaboration with other technology and service providers is vital.
Not even the largest vendors can cover all customer eventualities. Vendors must provide digital
products and services for all client customer touchpoints, especially the customer-facing activities of
the marketing, sales, and service departments, if they are to be perceived as credible strategic digital
providers.

Business trends and technology enablers

Digital marketing evolves into a broader set of enterprise-wide
technologies
Table 1: Customer engagement trends and marketing technology enablers
Monitor the business environment

Marketings primary role is changing. Whereas it has

traditionally focused on executing outbound marketing
communications campaigns, it is now spending more time
listening for market and customer signals and responding in
real time. Enlightened marketing organizations identify when
customers visit their website or research new products online
and seek to engage by responding appropriately, in a
contextually aware and personalized manner. Marketing
activity is thus triggered by inbound contact. The days of
batch and blast outbound email campaigns are largely over
response levels have fallen below 1%.

Create the technology portfolio

Digital marketing platforms are fast replacing the many point

solutions that have been acquired often in haste by
marketing departments using their operational budgets. It is
now possible to choose a single-source digital marketing
platform product supplier that does everything a marketer
might need. This is a strategic bet from an enterprise customer
point of view. The offerings of the seven top digital marketing
platform suppliers are detailed in the report Ovum Decision
Matrix: Selecting a Digital Marketing Platform, 201516.

Select solutions and services

When selecting a digital marketing platform it is important to

choose a supplier that has a big vision for the future of digital
marketing, one that includes sales (CRM) and service (call
center) technologies. Digital should not be confined to the
marketing department and all customer touchpoints should be
equipped with a single version of the customer truth so that
enterprises can pursue an informed, holistic approach to
meeting customer requirements. By its very nature, digital
needs to be easy for both enterprises and their customers to
use, so both the internal and external user experiences must

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2016 Trends to Watch: Digital Marketing Technologies

be attractive and intuitive. For this reason many enterprises

prefer to select a service provider that can embed an
innovative design experience for the benefit of the end user.
Manage deployment outcomes

Marketing and IT departments need to collaborate closely to

ensure that business needs and technical architectures are in
harmony. SaaS-based marketing cloud platforms are now
commonplace and are easier and quicker to deploy than
traditional on-premise solutions. Custom applications
development and systems integration are today usually
managed in an agile, scrum style that enables marketers to
experiment with innovative marketing ideas that can be
allowed to fail fast if they do not achieve market traction.

Source: Ovum

The digital marketing adoption trends identified in

2014 continue to grow in importance
The customer data hub emerges
Ovums 2015 Trends to Watch: Digital Marketing Technologies report identified five key digital
marketing adoption trends:

customer data management

cross-channel communications

customer journeys

customer experience

digital transformation.

These five areas are still of high and growing importance to enterprise customers.
In that 2015 Trends to Watch report we stated that customer data management is becoming a
high-priority business imperative. Today we would rephrase this to customer data management has
become the most high-priority business imperative. Enterprises are recognizing that the data
gathered in one area is useful to other customer touchpoints. For example, enlightened enterprises
turn off marketing promotions to specific customers when they are involved in a product defect or
repair situation. The availability of a single customer view and the unification of departmental
databases, especially across marketing, sales, and service departments, are critical business
requirements for large enterprises today. It is important to ensure that cross-department, joined up
operational processes in place.
The goal of enterprise vendors such as SAP, Salesforce, and SAS is to become the customer data
hub for the enterprise. SAP is seeking to leverage its position as the preeminent finance and
e-commerce data provider to the enterprise; Salesforce is seeking to leverage its preeminent position
as a sales customer data provider. Trust in the vendors ability to continuously provision high-quality
data for customers is a key issue and both vendors are seeking to leverage their credentials here.
Investments in building a customer data hub should be supplemented by investments in analytics
capabilities hence SASs interest, it being the largest independent analytics vendor. Enterprises
need to adopt an intelligent, data-driven, and analytical approach to marketing activities using digital
technologies. The days should be gone when marketing invests in knee-jerk campaigns and activities

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2016 Trends to Watch: Digital Marketing Technologies

because it worked last year or because we always do this or because competitors will scorn us if
we dont go. Marketing departments should now seek first to understand the customer and then to
engage them in a relevant and contextual fashion.
Investments in analytics should not only enable insights into market opportunities, but also suggest
the best next actions and method (i.e., the choice of channel) for customer engagement. Analytics
should also reveal the next best content to deliver to the customer to drive the customer journey to
its next stage post. For example, eBay has created a data discovery group that organizationally sits
between marketing and IT infrastructure. The companys data scientists have developed more than
120 models of customer behavior that include customer lifecycle, category lifecycle, and purchase
journey models that guide marketing activities.

Data-as-a-service augments customer data hubs with real-time

data
In Ovums 2015 Trends to Watch report we discussed a new, innovative approach to data
management and data marketing pioneered by Oracle (through its acquisition of BlueKai) and start-up
vendors such as Provenir and Innometrics. This approach is known as data-as-a-service (DaaS). SAP
has also launched a similar initiative, hybris-as-a-Service.
DaaS enables the integration of in-house CRM data and marketing database information with
real-time external online behavioral (cookie) data. This provides a real-time view of customer
behaviors and potential needs, accessible in-enterprise by marketers using self-service tools.

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2016 Trends to Watch: Digital Marketing Technologies

Figure 1: DaaS enables real-time data-driven marketing campaigns

Source: Ovum

Figure 1 shows how DaaS can complement traditional top-down corporate marketing planning
processes to provide an agile, bottom-up marketing capability. Using DaaS tools audiences
(segments of online viewers) can be created in the moment to reflect the stages of online
decision-making processes and online customer behaviors at that point in time. For example, online
viewers whose search behaviors reveal an interest in purchasing a mid-range saloon car can be
(anonymously) identified. Potential online buyers of goods and services can be intercepted with
marketing communications to induce alternate brand consideration.
In addition, using DaaS marketers can identify the customers who at a given moment are most likely
to be interested in specific brand or promotional propositions and who have the highest potential to
convert to sale. Marketers use these customer attribute clusters to narrow searches for online
behaviors of potential audiences with specific characteristics, targeting suitable customers to extend
the reach of the promotion. The conversion to sale of such audiences is appreciably higher than the
more random targeting traditionally used by marketers. Hence DaaS provides the short-term means to
increase sales by targeting potential online customers with marketing communications when they are
engaged in research and making purchasing decisions.

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2016 Trends to Watch: Digital Marketing Technologies

Cross-channel communications are increasingly important, but

represent many challenges
In Ovums 2015 Trends to Watch report on digital marketing technologies we stated that
cross-channel communications are increasingly important as a means to reach potential customers.
Ovum defines cross-channel marketing execution as the ability to:

deliver relevant digital messages and context-sensitive content across a wide range of
channels (e.g., display advertising, email, social media) and devices (e.g., smartphones,
tablets, laptops and desktops)

match messages and content to customer opt-in/opt-out preferences that reflect their recent
online behaviors (e.g., abandoned cart) and their demographic and other profile and usage
characteristics

synchronize messages and content to deliver a consistent brand message and brand imagery
only to the channels of relevance to the customer.

A customer-facing omnichannel capability requires that the back-office and supply chain systems are
in sync with the front office to ensure seamless customer experiences and transactional effectiveness.
The more channels that are offered, the more back-office complexity; this can lead to a spaghetti-like
IT channel architecture that is prone to defects and substandard delivery. As the retailer John Lewis
observes, the digital front end is only as good as the back-office facility that serves it; e-commerce
and other transactional systems must function across all channels.
Due to its complexity, few enterprises have ever fully mastered integrated marketing communications
(i.e., coordinating channels around campaigns and other push events). Very few activate more than
two or three channels in support of a specific communications campaign. Digital offers a potential
solution to managing this complexity, yet it provides only half of the online/offline blend of
communications that are the norm. For example, retail discount voucher redemption is typically in
offline (paper) form. One solution is to gradually digitize traditionally offline events. One option would
be for a retailer to use a loyalty card or mobile phone tracker to individualize customer experiences,
guiding retail store shopping behavior via a digital trail of relevant product discounts. The retailer
would reveal shopper identity at check-out to personalize the transaction process.
Cross-channel communications need to be supplemented with compelling content to excite and/or
inform the customer and drive customer journeys. Aligning content with cross-channel
communications remains a difficult logistical and creative challenge for marketers.
Cross-channel communications should be real-time and relevant and encourage click-throughs and
other customer engagement actions that ultimately lead to e-commerce fulfilment. Real-time
cross-channel marketing communications can be triggered by many different customer events,
including attendance at a venue, location, inbound communications, outbound communications, new
content availability and requirements, and predictive analytics prompts.
Mobile marketing communications capabilities are essential in this real-time communications
paradigm. Customer events and sentiment need to drive message content and also the tone of
message apologies and rebates should be more humble in tone than promotional offers. These are
all clearly areas of high management complexity.
In reality few enterprises are at the level of sophistication required to deliver effective cross-channel
communications. One leading proponent is the Royal Bank of Canada (RBC). RBC runs a client

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2016 Trends to Watch: Digital Marketing Technologies

interaction optimization strategy that includes a multi-step event management process. It sees
marketing as the orchestrator and catalyst for customer engagement, with a fast hand-off to sales and
service as the operational touchpoints for the customer. The bank has abandoned outbound push
marketing communications in favor of fast and relevant responses to inbound communications. RBC
provides universally personalized communications. For example, the loan interest rates they offer are
dependent entirely upon the risk profile of the customer there is no generic rate card.
In summary, enterprises have many different digital and marketing professionals managing individual
communication channels to the customer, but they usually work in a siloed manner. This is a big
danger. Customers do not think in terms of channels but in terms of networks, journeys, and
experiences. Enterprises need to think in the customers terms (e.g., customer delight/satisfaction)
rather than their own (channel delivery/profit) if they are going to offer truly customer-centric
experiences using cross-channel communications technologies. The latter requires genuinely
joined-up operations.

Customer journey management tools emerge

In Ovums 2015 Trends to Watch report on digital marketing technologies we stated that customer
journey management is a relatively new but fast-growing practice. In reality the customer journey
management market has not grown as quickly as forecast and most customer journeys are still
custom-build applications. Packaged products are yet to reflect the complex nuances associated with
journey management. Pioneers in the journey management market include Thunderhead, Salesforce,
and IBM.
Thunderhead was one of the earliest entrants to the customer journey management market with its
One Engagement Hub. More recently it introduced a new product, Smart Communications, for
multichannel marketing management. Salesforce has been strongly promoting its Journey Builder
product, which it gained through its acquisition of ExactTarget. IBM has announced its Journey
Analytics product, shown in Figure 2, which enables clients to automatically visualize and quantify the
paths that customers take.

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2016 Trends to Watch: Digital Marketing Technologies

Figure 2: IBMs Journey Analytics

Source: IBM

Customer journeys should replace the traditional sales funnel concept. Sales funnels are blunt,
prescriptive instruments that do not accurately reflect the vagaries of human behavior; they often
result in negative sentiment for brands as salespeople seek to circumvent or artificially speed up
decision-making processes. Although most attention has been directed at the customer journey to
sales conversion, it is also important to analyze the path to churn in order to intercept potential
defectors with appropriate corrective actions to increase customer retention rates.
A key element of customer journey management is the provision of appropriate content and
messages at different stages in the customer journey to e-commerce conversion. Rich content such
as video is now increasingly being used to initiate and drive different stages in customer journeys. A
deep understanding of the particular customers profile and behaviors is necessary to accurately
predict the next best content. Customer analytics is important here for monitoring and measuring of
customer journeys and for guiding experimentation.
The most successful enterprises are those that see customer journeys as pivotal for success. For
example, Philips organizes its internal structures around customer journeys, with more than 5,000
sales and marketing staff aligned to customer journey management. The company is developing
common dashboard and data sets across all its business groups. Its chief digital officer aims to have
no job in three years by setting in place the right framework for optimized marketing.

Customer experience emerges as an innovation issue

As we suggested the 2015 Trends to Watch report on digital marketing technologies, the neglect of
customer experience will increasingly expose enterprises to reputational risk. However, for many
enterprises the delivery of customer experience remains problematic. Some studies suggest that
customer experience is in decline relative to consumer expectations, especially in the software and
telecoms industries. In other sectors, such as fast food and retailing, customer experience is
improving as enterprises improve digital engagement by optimizing the mix and balance of online and
in-store experiences.

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2016 Trends to Watch: Digital Marketing Technologies

Enterprises are seeking to shape customer experiences through process innovation, but speed of
execution has been lacking in many instances. One key reason for this is that organization structures
are not being transformed to support agile innovation strategies. Many organizations are seeking to
optimize their structures rather than truly transform them to reflect customer experience. Some, such
as Walmart, have established dedicated innovation centers to facilitate innovation, but overall
enterprise performance in customer experience innovation is patchy.
Management consultants have sought to fill this gap: EY, IBM, Cognizant, HCL, and Accenture all
offer labs or innovation center facilities to help their clients visualize the possibilities and practicalities
of customer experience management. All of these companies are taking equity stakes in or acquiring
small software companies with innovative solutions that can address their enterprise clients customer
experience challenges.

Digital business transformation becomes a change

management issue
In Ovums 2015 Trends to Watch report on digital marketing technologies we pointed to digital
transformation (DT) as being an emerging enterprise-wide initiative. Indeed DT has escalated in
importance during 2015. One large systems integrator recently suggested that more than 60% of its
multi-billion dollar annual sales pipeline was in DT. Reportedly more than 2,500 chief digital officers
have been appointed globally and many large enterprises are getting to grips with the need for
change using digital technologies as a facilitator.
The primary goal of a DT initiative is the establishment of a digital nervous system that signals and
alerts management to market opportunities and operational issues in real time. Digital has its roots in
enabling responsive, adaptive, and quick-learning organizations that are obsessed with serving and
delivering value to the customer, over and above the value available from competitive alternatives.
In some industries, such as consumer packaged goods and retail, DT is essential for business
survival. In other industries, such as mining and engineering, the need for DT is less evident. There is
a strong vertical market focus associated with DT solutions. The greatest risk to enterprises cash
flows is from digital start-ups rather than their traditional direct competitors. Uber, Airbnb, and Amazon
Web Services are good examples of companies that have disrupted specific industry sectors.
In most industries there is an uneven distribution between organizations that have adopted DT and
those that have not. A leap of faith is required and returns are uncertain. Hermann Wimmer, president
of Teradata, argues that enterprises that resist DT risk being boiled like a frog. The analogy refers to
the premise that if one puts a frog in warm water and then slowly turns up the cooker heat the frog will
die without being aware of the danger it is in.
In most enterprises intra-company collaboration and employee engagement are still at low levels.
Creating and aligning a customer-centric company culture with the use of customer engagement tools
is a long road. Because change management is at the core of DT, the big four management
consultancies (Deloitte, EY, KPMG, and PWC) and large systems integrators such as Accenture, Cap
Gemini, and Wipro are heavily targeting the DT market. Other hybrid digital strategy and
implementation consultancies such as Bluewolf are also emerging.

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2016 Trends to Watch: Digital Marketing Technologies

Definitional and organizational challenges remain

Cultural, organizational, and leadership challenges will continue to slow the adoption of DT. Digital is
poorly defined and can mean anything and everything, although there is little dispute that in the
context of marketing the term refers to customer-facing technologies. For example, Cognizant defines
digital as technology plus strategy plus business process. Although this is plausible, it does little to
ring fence boundaries around definitions. In essence, IT manages internal business processes and
digital manages external customer-facing processes, but this is far from clear cut.
Transformation is itself a misleading term most enterprises use it to mean evolution rather than
anything more revolutionary. Certainly the focus should be on longer-term platform solutions rather
than short-term technology fixes and investment needs to be of a continuous nature rather than a
one-off. The key issue for many enterprises is where to start and a road map to guide progress is
essential. Business strategy should lead digital engagement and internal digital ideas (of which there
may be many) need to be tempered and prioritized against the requirement to deliver quick wins.
What is clear is that IT and digital have completely different modes of operation. ITs remit is
fundamentally risk averse and largely involves internal architectures, business continuity, data
security, and compliance. Digitals remit is the opposite: experimental, iterative, creative, agile, and
customer driven with a need to think outside the box. This means that two-speed technology
adoption is at the heart of most enterprises. A certain conflict of cultures is therefore likely, if not
inevitable. For example, digitals external focus means it exposes enterprises to significant cyber
security risks, the response to which falls under the jurisdiction of the IT department.
A key challenge for enterprises is the development of an organizational structure that facilitates digital.
Typically this involves a move from a hierarchical structure to a networked or honeycomb
organizational structure. Some equate success in digital to a beehive or an ant colony where the
central leadership is clearly defined and all the members have primary roles but work in collaboration
for the good of the whole.

Digital marketing platforms move to their next

stage of evolution
Performance marketing replaces marketing automation
In Ovums 2015 Trends to Watch report on digital marketing technologies we stated that digital
marketing technologies are reaching the mainstream. This has proved to be the case and the remit of
digital marketing has broadened and widened to include other technology components. During 2015
Adobe, IBM, Marketo, Salesforce, and SAS have all made moves to integrate advertising technology
into their core digital marketing platforms.
The digital marketing landscape now includes not only marketing automation, social, and mobile
communications platforms, but also ad tech, video, apps development, and e-commerce. The latter
four areas were considered separate specialist point solutions as recently as 12 months ago. Digital
marketing is now viewed not just as marketing communication, but also monetization as the market
begins to reach maturity. The primary product innovations have been done; a complete integrated
digital marketing platform is now the goal for enterprise vendors.

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2016 Trends to Watch: Digital Marketing Technologies

Figure 3: Digital marketing schema 2.0

Source: Ovum

Figure 3 reflects the change of emphasis that has occurred during 2015. Performance marketing has
replaced marketing automation, cross-channel communications has replaced omnichannel
communications, and analytics and personalization has replaced website optimization. The focus (the
connected customer) and the underlying IT architecture (enterprise data and content) fundamentally
remain the same, although of course there has been a move toward SaaS rather than on-premise
implementations.
Marketing automation is purely about automating marketing campaigns and associated promotional
and process activities. Performance marketing is very different: it involves extracting an extra fraction
of a percentage point when it comes to conversions, revenues, or click-throughs by finely calibrating
the online machinery at the operators disposal. Performance marketing is a term used by marketing
agencies in online marketing activities such as search engine marketing (SEM) and online advertising.
Pricing optimization is an emerging area in performance marketing, especially in the travel, retail,
consumer goods, and chemicals industries.
Performance marketing is about operational optimization maximizing return on investment on a
continuous basis. This is where many of the use cases for marketing technology are headed,
exploiting digital technologies using data scientists, economists, mathematicians, and statisticians to
interpret the data and identify outliers and data trends to adjust the marketing mix in real time. Key
performance marketing technologies include website testing, chat, lookalike modelling, MRM, and
SEM, which are used by digital marketers to optimize marketing operations.

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2016 Trends to Watch: Digital Marketing Technologies

Cross-channel communications replace omnichannel

communications
Cross-channel communications have escalated in importance since last years report but are still a
work in progress for most enterprises. Many organizations now have an omnichannel presence the
means to communicate with customers across many channels (display advertising, email, social
media) and devices (smartphones, tablets, laptops and desktops). However, the practice of using
cross-channel communications to select just the right channels to communicate with individual
customers based on customer behavior and preferences and context continues to elude most
enterprises.
Omnichannel is a general-purpose facility and is not targeted at the end customer. It therefore tends
to engender an unsatisfactory view of a brand as a spammer rather than a trusted supplier that
takes care to communicate with sensitivity through the channels preferred and used by the individual
customer. Omnichannel communications is an essential prerequisite for cross-channel
communications, but the latter offers a higher degree of sophistication and provides improved
personalization and targeting than the former.
Cross-channel communications includes cross-channel attribution, email, mobile, social campaign
execution, and next best action technologies. These are used by digital marketers to execute
marketing campaigns and manage inbound and outbound marketing communications activities.

Analytics and personalization replaces website optimization

Website optimization is now a relatively mature technology and a website is by definition single
channel. The website is still the most important digital asset for most enterprises, but it is now starting
to decline in importance as customers choose to review and evaluate their suppliers using other
channels, such as social media. This gives consumers a more rounded and authentic perspective of a
suppliers strengths and weaknesses, including content from (hopefully) unbiased customers.
Websites are essentially pure selling documents on behalf of the vendor and are therefore less
trusted as a reputable source of content.
Analytics and personalization are closely linked. Analytics in this context means the ability to conduct
market-level deep data mining, sifting through customer data to identify latent and adjacent market
segments, product positioning opportunities, and competitive threats and predict future trends.
Traditional products in data mining include IBMs SPSS Modeler and SASs Enterprise Miner.
Increasingly, though, these powerful analytics technologies are baked into digital marketing platforms
such as SASs Customer Intelligence suite and the Adobe Marketing Cloud.
Personalization is the ability to drill down into individual customer data to identify, for example, online
behavior, buying patterns, preferences, choices, and affiliated stakeholders and predict which
customers are prone to churn. It applies analytics technology at the individual level at scale.
Personalization is increasingly being used to predict what customers will do and buy next and to
intercept customer intentions with pertinent communications. Amazon and Google are adept in this
area; the latter is said to ship products to a distribution store located near the customer in anticipation
of a future purchase so as to provide super-fast delivery.
Key analytics and personalization technologies include customer journey mapping, Net Promoter
Score, propensity modelling, behavioral scoring, and sentiment analysis. These technologies are used

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predominantly for measurement and targeting within customer insights and customer development
teams.

Social and mobile shape the new digital operating

environment
Social marketing is yet to be adopted in a wholesale manner
Many enterprises have been slow to organize their customer touchpoints around social; return on
investment has been unclear and there has been general skepticism about the relevance and
business importance of social. In most enterprises small specialist teams of between three and 10
members of staff have been employed to provide a fast response to problem social mentions, to
amplify positive comments, and to use social as an alternate channel for company news. PR and
corporate communications have been the primary use cases in marketing.
More enlightened enterprises, especially those dependent on the younger generation for growth, have
been quick to put social at the center of their customer engagement strategies. Nestle and Danone
are examples. Nestle is feted for its centralized Social Command Centre, a futuristic social media
center in Vevey, Switzerland that is staffed by more than 30 people. GE, Wells Fargo, and Ford have
similar facilities. Danones Evian gained global attention for its Roller Babies viral video campaign; it
has the tagline Live Young and a long-term commitment to put real-time social media engagement
at the heart of our activation."
Retailers and consumer brands such as Coca-Cola, Unilever, and P&G have also been the early
movers. Marketers at these companies are:

leveraging customer ratings and reviews on their websites

hosting branded communities or forums

running word-of-mouth marketing programs

using branded blogs

curating social content to attract followers and advocacy.

Leading brands have been rewarded for their engagement in social with a global scale of advocacy
and influence. For example, in August 2015 Coca-Cola had 92 million likes on Facebook and more
than 3 million Twitter followers. However, such figures should be treated with caution the illicit trade
in buying likes affects all brands. Click farms of likers often like established brands as well as their
clients to mask their financially driven motivations. For authentic brands, social success does not
happen overnight by buying likes or Twitter followers. For example, UK retailer Asdas social journey
had five main steps:

monitor social traffic

trial social initiatives

engage directly with social contacts

grow a social presence

influence decision-making.

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Asdas journey took five years (2009 to 2013) to complete. It now has 335,000 Twitter followers (more
than rival Tesco, which is three times its size) and 1.5 million Facebook likes.

Facebooks Custom Audiences is altering adoption patterns

Most enterprises had invested little in social marketing campaigns until Facebooks micro-targeting
Custom Audiences capabilities caught their imagination.Twitter now offers a similar facility, Tailored
Audiences, and LinkedIn has added custom targeting capabilities. Salesforce has launched Active
Audiences, which leverages Salesforce CRM data for targeting. Facebooks Custom Audiences
enables marketers to advertise on Facebook to known customers or sales prospects. Contacts can be
targeted based on their email addresses, phone numbers, website visitors, or mobile app users.
For example, Facebooks Custom Audiences was used to promote the movie Interstellar starring
Matthew McConaughey. The movie was promoted to four different mobile phone segments using
different messaging, content, and tone for men (adventure focus) and women (relationship focus) and
for those under and over the age of 25. Mobile marketing and social is now perceived as the key
combination from a marketing perspective; this combination is driving Facebooks extraordinary
revenue growth.

Social measures are still relatively undeveloped

Social is predominantly a top and middle of the funnel activity that includes the consideration and
validation of brands marketing claims rather than a direct marketing lead-generation tool. Brand
awareness and preference rather than sales conversion are the key motivations for social
investments. Return on influencers is the new corporate metric of choice for marketers: its
counterpart for individuals is a Klout score, a measurement of engagement and overall influence.
It has difficult to attribute revenue uplifts to social than to other marketing methods such as email
marketing, especially using the traditional financial metrics such as return on investment and return on
capital employed that are most likely to influence enterprise investment decisions. This lack of direct
measurability has subdued enterprise investments in social to date.
However, there is a change in emphasis toward owned and earned media, which offer higher
customer credibility than traditional paid media and cost a fraction of the amount. Social is
essentially free (unlike advertising and other paid media) and it is now recognized that, in the right
circumstances, it can drive positive brand recognition and consumer purchases. For example, some
fashion retailers have placed social connections in their store changing rooms; young shoppers
receive positive product feedback from their friends, leading to much higher conversion levels.
Well-conceived social strategies, combined with skilled, motivated, and astute social marketers, can
deliver returns that are unsurpassed by other modern marketing methods. The key challenge for
marketers is to communicate these benefits to mostly skeptical enterprise decision-makers; the
emergence of new industry-standard social metrics will help here.

Enterprises need to be social rather than do social

Enterprises need to adopt social internally for external social communications to be effective. Internal
subject matter experts (rather than marketing communications executives) need to be involved in
internal and external communications to provide depth, context, and authenticity to social comments.

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Typically this would mean investing in an internal enterprise social media platform such as Yammer or
Chatter to facilitate internal discussion and content provision.
To be effective, enterprise social platforms need to be directed at specific use cases. For example,
Verizon successfully uses Chatter in conjunction with Salesforce CRM to drive internal commercial
discussions around customer sales proposals. The risk is that enterprise social media platforms can
become the general-purpose forum for vocal members of staff, who all too often are not the authentic
subject-matter experts valued by internal staff or external customers.
Social contributions need to be baked into the remuneration plans and performance appraisals of all
customer-facing staff members. Individuals need to be encouraged to proactively and carefully
manage their personal online brands, because these will reflect on the enterprise corporate brand
image. Community managers need to be respectful of all social contributions, no matter from what
source within the enterprise. Social content performance feedback should be internally publicized to
encourage personal recognition.
A light touch is required with regard to guidelines around tone and content authenticity is key to
customer approval. For example, Tesco is known for using humor and a certain irreverence in its
social responses. Speed is of the essence, because consumers have little patience. In summary, for
social to work, internal and external activities need to marry up, harmonize, complement, and
reinforce one another so that authenticity is clearly communicated to all stakeholders.

Appendix
Methodology
This report was developed using input from senior executives within leading and innovative start-up
vendors, enterprise technology decision-makers, and Ovum analyst colleagues. It draws heavily on
the results of Ovum research programs and reports produced during 2015. Future trends have been
constructed and synthesized using these multiple inputs.

Further reading
Ovum Decision Matrix: Selecting a Digital Marketing Platform, 201516, IT0020-000135 (July 2015)
Planning and Activating Digital Business Transformation, IT0020-000084 (June 2015)
2015 Trends to Watch: Digital Marketing Technologies, IT0020-000054 (October 2014)

Author
Gerry Brown, Senior Analyst, Customer Engagement
gerry.brown@ovum.com

Ovum Consulting
We hope that this analysis will help you make informed and imaginative business decisions. If you
have further requirements, Ovums consulting team may be able to help you. For more information
about Ovums consulting capabilities, please contact us directly at consulting@ovum.com.

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