Its a new decade, new paradigms and ways of reaching consumers nothing will be the same again. Now that I have your attention, I’d like to bring things down to earth. One of the smartest things Bill Gates ever said had to do with technology and future adoption. It was something to the effect of: we over-estimate the speed of innovation and technology in the short-term and underestimate it in the long-term.
According to Forrester, digital marketing spend has increased almost five-fold over the past decade to account for 12 per cent of marketing spend. Most of this is email marketing, search and display advertising. However, the decline of clickthrough rates (or effectiveness in terms of acting on the call-to-action) of these marketing vehicles has been well-documented as far back as 2007.
In addition, Google search advertising has largely become optimally priced from an economic point-of-view, so smart online marketers are becoming more open to experimentation.
I expect this to continue and expand in 2010. A second reason why expect this to expand is that with the recession-led decline in spend on above-the-line (ATL) marketing through reducing spent on advertising inventory in print and broadcast media marketers are starting to think differently about their relationship with current and prospective customers. In fact I wouldn’t be surprised if Google sees a corresponding decline in spend on keywords as well.
A classic example of this ATL change came out of an interview that Tyler Brule did with Gildo Zegna (pronounced Zen-yah), CEO of luxury brand titan The Ermenegildo Zegna Group for the Monocle magazine podcast series. Zegna is interesting because he sits at the head of a dynamic family-owned business not hamstrung by institutional investors trying to second guess him.
Tyler Brule: Share with us three or four business lessons that you learned over the past year?
Gildo Zegna: From a personal standpoint, I think that what I learned was stick to the DNA of the brand. Be real, be genuine, try to keep a very close contact with the customer, listen to him and if he or she says something that you don’t like just be sure to execute rapidly.
It could be something about the service, it could be something about the price, it could be something about the creativity, it could be something about being more aggressive on how you enter markets so I think that in one word: stick to the DNA of the brand.
Tyler Brule: What are your key focuses on 2010/11?
Gildo Zegna: I just had my management meeting last week in Milano, I said listen guys back to new normality and back to growth. Cost control, shorter lead time, work with low inventory and keep investing. I think that I can believe that if you cannot afford new investment today, because unless you are a brand that has the capacity whether it is your money or money you borrowed from the financial system: now you will not make it.
I think that speed and the way you make a well thought decision is important, but surely don’t stop investing either in your store, new markets, new people and of course marketing. I think one of the biggest cut I had to do this year is in media, but you know above-the-line, below-the-line I did not save anything, events - I have never done so many events in-store. Why? Go and meet the customer, talk to them, even if he doesn’t buy anything he will come back next season. Because next season he will be poor not to buy, or not to enjoy. These are some of the activities, you know, working with you guys (Monocle) on new ideas: co-branding or new products or new services. So I think just be energetic and be creative, but at the end you have to have the resources to do it. You just can’t do it by mouth and if you do it well and if you do it in the right way then I think that business comes back.
New areas of experimentation are likely to include the use of location-based services. For instance, restaurants are already offering discounts through Foursquare and Plantronics sponsored the development of the Work Snug iPhone application (which is awesome) targeted at road warriors and digital nomads. In common with all the applications utilising GPS it eats batteries like nothing else, so use, but use sparingly. There is a lot of life left yet in cell triangulation yet.
In common with me-too social media campaigns and applications, users will soon tire of overused mobile ideas in the same way that Vampires, poke variants and re-skinned Flash platform games bored them in the past.
I hope that the biggest change will come from businesses not thinking of social marketing in terms of Facebook or Twitter; but in a more holistic way which takes it into the analogue world just like Mr Zegna’s small store events because this is all about people, everything else is just facilitating stuff. And if business becomes a more human thing, it is harder to replicate and easier to turn into a lifelong customer relationship. This was published over at my personal blog.