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Digital Marketing—Trouble on the Horizon.

Grab an umbrella. If Digital Marketing (read online advertising and social media) was viewed as a weather report, it would be mostly overcast with periods of rain and the occasional outbreak of brief sunshine. And that’s how many marketers are starting to see it.

It’s natural for the providers of Digital Marketing platforms to tout successes. Doing so is in their own self-interest. But if you take a closer look, these examples seem isolated and relatively few. Sure, they do the rounds and their successes keep getting promoted. As a result we don’t want to miss out, so we join the party for a piece of the action. But with so much effort and billions of budget dollars spent on these platforms by marketers, why are we not inundated with wide-spread success stories from all corners and all verticals? Instead, over the past few years we’ve heard success measured in terms of likes, follows and shares—as most of us know, these vanity metrics are today considered mostly meaningless. Your objectives and goals are different from other companies. Your reasons for pursuing this tactic may be different. Your sales cycle may be short or long. But at the end of the day, the only metric that truly matters is: Did it bring in repeat and/or new customers? Did this effort convert to sales and at what ROI?

Earlier this year there was a brief moment of industry discussion and push-back around Digital Marketing and online video advertising.

Global media agencies were up in arms over how tracking results were being reported for their agency clients by the online ad platforms. One that stood out to me was how Facebook had changed what they considered a ‘view’. They announced they would no longer count ‘views’ if they were less than 3 seconds. Really? 3 seconds was a view? As a brand client I wouldn’t consider anything less than 50% a view—and just like TV commercials, that’s questionable. For those reported 70% that did run for their full duration, how confident would you be that they were watched with the viewer’s full attention? 2 minutes later could they recall the brand or product? I don’t know. Perhaps.

I recently read a brilliant analysis on Digital Marketing effectiveness where Forbes, Fortune, Wall Street Journal and New York Times best-selling author Ramit Sethi, CEO of GrowthLab ( laid out his company’s experiences and results of following the crowd. It’s fascinating insight and I applaud him for sharing their learning:

Like most of our experiences with digital and social, it started with the usual… spending hours on creating and crafting an article he hoped would be interesting to his audience. He then hit “Post,” and sat back… only to hear… crickets. Like many of us, he’d sometimes get a “Great post!” comment. (I can totally relate to this and I’m sure when you look at your own social accounts you will too.) Is this what engagement is really like? For sure it doesn’t feel like it’s helping grow or move the business forward.

The dream that it’s easy to write or publish something, click “Post,” and have people posting comments, sharing it, replying to your emails—you know, real engagement and something we now call ‘earned media’ just isn’t there to the capacity we’d all like to believe—And the data proves it.

Fortunately (or unfortunately) for Ramit and his company, he was in a position to be able to ramp up his efforts, dive in and double down on social—after all, like all of us, he kept hearing it was working for everyone else… and who wants to miss out?

    • His company built a complete Facebook ad team and spent a budget of $2 Million over 2+ years—Not including hiring staff.
    • They expanded their team of people to include data analysts, traffic & growth experts, product experts and technology experts and others to support their efforts.
    • They conducted opt-in tests, ran monthly multiple A/B tests including funnels, holdout tests, and upsell & cross-sell.

As Ramit said in his article: “we spent a shitload of time and money (and we got really good) at all of these strategies to grow faster.”

Then one day, one of the Digital Marketing analysts did what analysts do and presented some actual data.

  • They had participated in a high-profile partnership with a well-known business with a sizable audience (think of this as a cross-over between joint venture and influencer marketing.) From an existing partner subscriber list of over 49,000, they ran a contest. After looking at the opt-ins, the confirmed campaign opens, clicks and successful double confirms the outcome was only 165 new qualified leads (that’s 0.3%), and sales you can count on one hand.
  • Following all the best practices, they tested and optimized their Social Advertising and got very, very good at improving their results.

Note: These aren’t vanity metrics, these are what most of us would consider real, meaningful results:

  • They added over 210,000 new email subscribers from Facebook ads alone.
  • Cost per lead fell to $2.50.
  • Click through rates rose to 5% and Opt-in rates went up to 20%.

By all measures great metrics and a whopping success. Let’s all jump onboard!

As good as they are, these numbers don’t tell the whole story…

  • There’s one key measurement missing and it only shows up when you look at the ROI. Having spent $2 Million on this effort it returned just short of $800,000. It had actually cost them $1.2 Million and 2 years of effort to learn this marketing approach wasn’t working for them.

Yes, they’d been able to dramatically scale their number of email subscribers—which would have been fantastic had these new subscribers bought anything, but most never did!

Excuse a little self promotion: If you have a $2 Million budget or even $200,000 let’s talk! 🙂

Our agency has a mission statement that, summed up, reads: Building your brand with those who matter. Put another way, marketing metrics shouldn’t be about getting more subscribers—It should be all about attracting more engaged and interested buyers.

I think it’s fair to say (and I hope widely accepted) that if your message, product or service isn’t relevant to a large portion of your database, you wouldn’t include them in your campaigns. Agreed?

Putting regulations and compliance issues aside, your extensive (double opt-in) email list is no different if it’s built on low-quality competition or giveaway sign-ups—you’re simply wasting your budget, hurting your numbers and risking your sender reputation should recipients start marking your email as spam.

Digital or Social, it’s not the size of your audience that matters it’s the quality.

If people don’t want what you can offer them, they simply won’t buy from you. Regardless of tactic, by including as many people as you can find on the front-end and having a much larger list, you’re actually increasing your Cost-Per-Lead, while also reducing your reported Click-Thru-Rate and Conversion percentage numbers.

It’s not just Ramit’s experience, in the recently published eBook, Digital’s BIG short, digital strategist Kevin Adema highlights some sobering realities:

  • Brand engagement for Twitter, Instagram, Google+ have fallen between 10% and 50% – (Forrester1)
  • Business confidence in digital is failing: Only 32% of brand executives believe they’re executing an effective digital strategy – (Forbes2)
  • Business outcomes in digital is failing: Only 45% of executives believe digital will achieve business objectives – (Accenture Digital3)
  • Even with this bad news and falling engagement, brands increased their spending on digital platforms in an attempt to break through the clutter and rise above the noise. Facebook’s revenues were up for the same period over last year, while at the same time brand and publisher engagement on their platform fell over 20% – (Buzzsumo4)
  • 50% of brands are scrambling to find someone to actually deliver customer engagement – (Sapient’s national online digital survey5)
  • Then there’s industry giant P&G, who cut their digital spend by nearly $140 Million citing brand safety concerns and ‘ineffective’ ads. At their August earnings call they announced this cut had no negative impact on brand performance.6

If that wasn’t enough:

  • Just today we heard that: 53% of marketers are seeing declining organic reach and 84% want to learn more about Facebook ads – (2017 Social Media Marketing Industry Report).
  • And a few years ago, General Motors very publicly turned away from social media when they announced they would stop advertising on Facebook—citing disappointing results.

While being huge advocates of testing, we believe social media and/or digital marketing does have a key role to play in your marketing mix. It’s all about clarifying your objectives and goals—and then how best to apply this approach to achieve positive results.

As again outlined in Digital’s BIG short, marketers have been approaching digital all wrong. The solution isn’t to treat digital platforms as the next (or now) medium while maintaining the old traditional promotional approach, but to treat them as what they are—engagement platforms centered around your customers. In fact it’s been called the ‘Dialogue Age’.

If we don’t stop thinking of digital marketing as the new way of blasting our message out to the masses (at very little cost), falling engagement rates will accelerate and with that, brands will cease spending on a tactic that returns lackluster and diminishing results. Ending, as Kevin notes, with the possible collapse and disappearance of many digital platforms—and according to MediaGrowth’s executive summit, this could happen as soon as 2020.

Digital Marketing as a tactic needs to be looked at very differently.

It’s not a one-way communication channel to push your message like TV, radio or newspaper advertising is. Digital (social) started out and still is much more like a trade show or the telephone. It’s a two-way medium requiring real engagement and dialogue.

Today, the constant talk and mentions of ‘fake news’ increases the risk and plants the seeds of doubt that most of what we see or hear online is untrue, and this extends to marketing. From a brand reputation perspective, it’s all the more important to be aware of what is being discussed and to engage in these conversations to correct misconceptions, rumors and false or fake perceptions. At the same time, positive conversations can be highlighted. Being present in these conversations strengthens brand reputation and creates better engagement with your current and future customers.

With app preferences constantly shifting and millions of discussions on multiple platforms and websites every day, how do you identify which are relevant to your industry and business and where you should engage?

There’s an answer for that and it’s called Social Listening. While you should be getting KPI’s from all of your online advertising, these measurements can’t tell you if your ads are being discussed online or helping drive the momentum. With the ability to identify the conversations that matter to you, audience insights and more, we can help you get smarter in knowing your customer and what matters to them. Knowing what’s important for your customers helps you develop more relevant communications across all of your tactics—and that gets talked about in more positive terms as well as helping accelerate their buying journey. After all, why spend budget trying to get attention when you can build your brand with those that really do matter?

If your digital and social results are not currently achieving your marketing goals and you’re not practicing Social Listening but want to ‘try it out’ before committing long-term, give us a call. We’ll work with you to create a snapshot of your (and your competitor’s) social landscape. You’ll learn who’s talking about your industry, what they’re saying about you, where the conversations are actually taking place with your current and future customers, and how your digital marketing budget could be reallocated so that you actually engage with those most likely to result in sales and revenue.

Check out our recent post and infographic outlining the benefits and value marketers can realize by applying Social Listening as part of their 2018 marketing plans.

As we are now in the last quarter of 2017 and your budgeting and planning is likely wrapping up. Before repeating or shifting more of next year’s budget to ‘Digital’, take a look at all your key metrics—especially your sales results. Like Sethi, Adema and many other brand executives, you too may come to realize that what you thought was a better way of marketing is now starting to look more like storm clouds on the horizon. Digital isn’t bad. It can help build your brand—it just needs to be looked at and applied in a very different way.

A special thanks to Ramit Sethi and Kevin Adema for their permission to share their insights, experience, and research in this article.