In a digital marketing context, ‘capability’ refers to the processes, structures and skills

that are adopted for planning and implementing digital marketing. A capability maturity model

shows the series of common stages that organizations pass through during their adoption and

increasing refinement of digital marketing. This was inspired by the capability maturity models

devised by the Carnegie Mellon Software Engineering Institute to help organizations improve

their software development practices. Capability maturity models are useful for showing the

position of a company on its journey to e-business or social business. Through reviewing and

benchmarking, a roadmap for future implementation can be developed. Capability maturity

model can be useful for following purpose:

Review current approaches to digital marketing to identify areas for improvement;

Benchmark with competitors who are in the same market sector or industry and in different

sectors;

Identify best practice from more advanced adopters;

Set targets and develop strategies for improving capabilities. (Chaffey, 2011)

A detailed stage model which businesses can use to benchmark their e-commerce

capabilities was developed by Dave Chaffey for E-consultancy based on research with marketing

directors and e-commerce managers in a range of companies. The capabilities evaluated were

based on research designed to identify the challenges faced in managing e-commerce and the

approaches used. Since the model was created, social media and social business have increased

as concerns, so these should also be included at higher levels of capability. Such is their

importance that it could be worth- while reviewing social media marketing capability using a
framework. The capabilities for digital marketing for any company can be reviewed in the

following manner:

Capability level: Unplanned

Strategy process and performance improvement

Limited

Online channels not part of business planning process

Web analytics data collected, but unlikely to be reviewed or actioned

Structure: organizational location of e-commerce

Experimentation

No clear centralized e-commerce resources in business

Main responsibility typically within IT

Senior management buy-in

Limited

No direct involvement in planning and little necessity seen for involvement

Marketing integration

Poor integration

Some interested marketers may experiment with e-communications tools

Online marketing focus

Content focus

Creation of online brochures and catalogues

Adoption of first style guidelines

Capability level: Diffuse management

Strategy process and performance improvement

Low-level

Online referenced in planning, but with limited channel-specific objectives

Some campaign analysis by interested staff

Structure: organizational location of e-commerce

Diffuse

Small central e-commerce group or single manager, possibly with steering group controlled by

marketing

Many separate web sites, separate online initiatives, e.g. tools adopted and agencies for search

marketing, e-mail marketing

E-communications funding from brands/businesses may be limited

Senior management buy-in

Aware

Management becomes aware of expenditure and potential of online channels

Marketing integration

Separate

Increased adoption of e-communications tools and growth of separate sites and microsite

continues

Media spend still dominantly offline

Online marketing focus

Traffic focus

Increased emphasis on driving visitors to site through pay-per-click search marketing and

affiliate marketing

Capability level: Centralized management

Strategy process and performance improvement

Specific

Specific channel objectives set

Web analytics capability not integrated to give unified reporting of campaign effectiveness

Structure: organizational location of e-commerce

Centralized

Common platform for content management, web analytics

Preferred-supplier list of digital agencies

Centralized, independent e-commerce function, but with some digital-specific responsibilities by

country/product/brand

Senior management buy-in

Involved

Directly involved in annual review and ensures review structure involving senior managers from

Marketing, IT, operations and finance

Marketing integration

Arm's-length

Marketing and e-commerce mainly work together during planning process

Limited review within campaigns

Senior e-commerce team-members responsible for encouraging adoption of digital marketing

throughout organization

Online marketing focus

Conversion and customer experience focus. Initiatives for usability, accessibility and revision of

content management system (including search engine optimization) are common at this stage

Capability level: Decentralized operations

Strategy process and performance improvement

Refined
Close cooperation between e-commerce and marketing

Targets and performance reviewed monthly.

Towards unified reporting

Project debriefs

Structure: organizational location of e-commerce

Decentralized

Digital marketing skills more developed in business with integration of e-commerce into

planning and execution at business or country level, e-retailers commonly adopt direct-channel

organization of which e-commerce is one channel.

Online channel profit and loss accountability sometimes controlled by businesses/brands, but

with central budget for continuous e-communications spends (search, affiliates, e-

communications)

Senior management buy-in

Driving performance

Involved in review at least monthly

Marketing integration

Partnership

Marketing and e-commerce work closely together through year

Digital media spend starts to reflect importance of online channels to business and consumers

Online marketing focus

Retention focus

Initiatives on analysis of customer purchase and response behavior and implementation of well-

defined touch strategies with emphasis on e-mail marketing

Loyalty drivers well known and managed

Capability level: Integrated and optimized

Strategy process and performance improvement

Multi-channel process

The interactions and financial contribution of different channels are well understood and

resourced and improved accordingly

Structure: organizational location of e-commerce

Integrated

Majority of digital skills within business and e-commerce team commonly positioned within

marketing or direct sales operation.

Front-end' systems development skills typically retained in e-commerce team

Senior management buy-in

Integral
Less frequent in-depth involvement required. Annual planning and six-monthly or quarterly

review

Marketing integration

Complete

Marketing has full complement of digital marketing skills, but calls on specialist resource from

agencies or central e-commerce resource as required

Online potential not constrained by traditional budgeting processes

Online marketing focus

Optimization focus

Initiatives to improve acquisition, conversion and retention according to developments in access

platform and customer experience technologies

May use temporary multi-disciplinary team to drive performance

Reference

Chaffey, D. (2011) E-Business and E-Commerce Management: Strategy, Implementation and

Practice, 5th edition. Financial Times/Prentice Hall, Harlow.