The importance of digital in marketing activities not only grows quickly but very often takes lead. It is visible, among others, in the area of advertisement spending where global expenditures on internet ads in 2017 have already exceeded investments in TV ads (according to Magna/IPG Mediabrands), and amounted to 41% of costs (TV — 35%). The predictions (Magna/IPG Mediabrands) are that in 2020 digital ads will account for over 50% of media budgets. Digital becomes more and more vital sales channel, accounting for as much as 2-digit share in the profits of companies selling their good also via traditional channels. The role of digital gains meaning also in other areas of business operations, such as customer service or working with client database.
So, it is clearly visible that digital has unambiguously affected the marketing. Things that were good enough 5-10 years ago are very often of no use today.
Marketing Automation is one of digital area. It supports marketing activities and aspires to be the center of these activities. In 2001 we had between 10 and 20 tools of marketing Automation. Now we have over 200 classified and there are more used in practice. They offer different options, functionalities, specializations. They serve different business areas, types of companies. They are easy to implement in one organization and hard to implement in another. They need different budget and have different IT-related requirement.
77% of CMO respondents declared profit increase to be the main reason to use Marketing Automation (Gleanster). Then again, for more than 90 % of marketers it is the main component of the whole digital-related activities (market/Ascend). Only 21% of companies declare to achieve the maturity in use of Marketing Automation, above the average (18%) or maximum level (3%). (“The 2016 Marketing Maturity Benchmark Report”, LeadMD).
These researches show that marketing-area decision makers are expressly interested in the use of Marketing Automation — sale-orientated and as the fundament for all internet-based marketing activity. At the same time not many west companies can effectively use the full spectrum of what Marketing Automation has to offer. If such study was held in Poland, results would probably be worse.
When we think about Marketing Automation we should not put equation sign between the area of activities and the tools to carry out such activities. For instance, invention of mobile phones cannot be perceived only in the context of technical parameters or options they offer but also in the context of the influence on our lives. Implementation of Marketing Automation means not only implementation of tools, it is also a very significant change for the whole organization, including key processes, teams, the way of thinking about strategy, communicating with the client and values of the company.
In theory, marketing Automation enables to reach:
- the right person
- with the right communicate
- in the right time
- through the most effective channel
- without any manual activity.
In practice, Marketing Automation is understood as activities allowing to personalize elements of internet page (banner, pop up) based on the knowledge about non-identified user (for instance: the source campaign, visited sub-pages, activity on such subpages, viewed products) or as situations where the user’s activities are scored and when the specified number of points is achieved, data about such user is transferred to sales department in order to complete the transaction (or to send auto-email with personalized offer), or as the most advanced applications, where data about client is derived from many sources on the digital management platform. Digital management platform provides information what kind of advertisement the client saw in the paid campaign, which one was clicked, was the page visited, what the client did on the page, did the client visit the shop, did the client buy something. This information about the client and the client’s behavior (and influence on KPI) helps to build and verify segments, and is a solid base for Marketing Automation activities that rely on company’s webpage, paid campaigns or its own communication channels (SMS, e-mail, phone, Facebook message etc.).
Marketing Automation has a real chance to permanently change the marketing communication in many companies, as it saves time and resources and provides the marketers with previously inaccessible options. These are:
- application of personalized communication covering the number of segments and variables that could not be covered before;
- handling of developed and multileveled customer contact scenarios;
- access to data that enable to evaluate effects, tests and optimization of activities with regard to specific KPIs;
- identification of new, previously unknown segments — built based on real actions of customer and not on declaration of action;
- opportunity to contact the client on different levels, lead nurturing while maintaining the cohesive communication;
- use of information about the client (and the knowledge, which client is worth more) in paid campaigns.
The aforementioned options influence the marketing and changes companies’ requirements with regard to the role of CMO. The CMO competencies will be replaced by the competencies of Chief Digital Officer more and more frequently. According to Gartner — the role of Chief Digital Officer (currently in approximately 15% of the biggest companies) will often be temporary one (with the peak in 2019, it will be gradually replaced to finally disappear around the year 2025) and will serve mostly the digital transformation of the companies. But, once the transformation is over, existing departments (including marketing) are expected to absorb the competencies, procedures and processes from digital area.
To sum-up. Marketing Automation is very likely to significantly change the approach to marketing, leaving its mark on the marketers as well. It means that many existing CMO have barely a few years to adjust or withdraw — leaving the space for younger and more fluent in this field.
Author: Krzysztof Szarski, Head of Conversion, member of the policy council of "IAB HowTo: move from expectations to reality in Marketing Automation", expert of IAB Polska.