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Go digital or die

Brands cannot rely on traditional advertising.

JOHANNESBURG – Gone are the days when companies with fat wallets could simply pay their way, via massive advertising campaigns, into dominating a particular sector. In the world of digital media, consumers are the new domain masters and they will determine the rules of engagement.

About 80% of “classical marketing”, such as radio and television adverts, doesn’t work, according to Dr Thomas Oosthuizen, author of ‘The Brand Book: how to launch a profitable brand fast, efficiently and effectively’.

But, says Oosthuizen, chief marketing officers will continue to pour the majority of their budgets into traditional advertising as long as so many unanswered questions exist around other channels.

Acknowledging that digital is “a new space for everybody”, without universal principles and involving a fair amount of guesswork, Oosthuizen nonetheless argues that it is more scientific and measurable than traditional forms of advertising.

“It is not that advertising and public relations have no role, but the contextualisation of these [within a wider brand strategy] is important,” Oosthuizen, who is global consulting director for Acceleration, explains.

With customers taking more ownership of their interactions with brands, the balance of power has shifted so that advertising is now only one tool, adds Acceleration marketing director, Juliet Hazel.

South African-born and now headquartered in London with offices worldwide, Acceleration “crafts digital marketing capability for the largest global brands”, according to its website.

That digital technology can give brands the kinds of insights into the lives of individual customers that they had in the days of face-to-face sales – as opposed merely to insights based on broad customer segments – is compelling indeed.

Take Target, the low-cost American retailer that created a computer model to figure out which shoppers were pregnant simply by studying their shopping habits.

“By crawling through the data, Target was able to identify about 25 different items that when analysed together would allow them to predict when someone was pregnant,” says Charles Duhigg, author of ‘The Power of Habit’, in this YouTube clip.

Of course with customer sensitivity around personal data protection, Target couldn’t “let on how much they knew”, says Duhigg.

“So Target started mixing in ads for bottles and formula with other products that had nothing to do with pregnancy, things like lawnmowers and wine glasses, things that pregnant women wouldn’t necessarily be interested in,” he explains.

“And it worked. Women started using the coupons and Target’s mom and baby sales exploded.”

Not all data matters

Oosthuizen – who believes that digital technology is vital in managing the lifetime value of a customer, driving growth and maintaining cost efficiencies – also cautions against being bogged down by too many data points.

“Companies have too much data. Not all data is equal and companies must decide what is relevant,” he said.

In other words, determine which data points will be most valuable in meeting your business requirements and focus on obtaining and understanding those. Don’t simply launch a Facebook page or Twitter account because “everyone’s doing it”.

Richard Mullins, Acceleration’s MD for the Middle East and Africa believes the obsession with big data is misplaced and should rather be directed towards smart data. “Smart data entails building a data capability into a business, from distribution to marketing and beyond, which enables or meets a business requirement,” he says, adding that smart data is data that drives behaviour.

“Have a roadmap as to where you are going. Don’t buy off the shelf or appoint numerous agencies to do little things,” Oosthuizen advises, highlighting that the answer is not more agencies, better systems or more sophisticated software.

Rather, addressing short-term needs within a long-term view – and even experimenting with different ideas as you go – is a better option.

For example, according to Mullins, one local bank has seen a 50% increase in the uptake of loans simply by placing on its customers’ internet banking homepage details of the loans they qualify for.

The number one mistake brands make? “They lose sight of their customers. Brands become things in their own right and then lose touch with the customers that put them there. Digital is forcing the customer back in,” says Oosthuizen.

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