Digital comes of age

In 2004, when the digital sector was finally starting to pick itself up out of the post-crash doldrums, a senior industry figure told me the most important thing that could happen to boost the fortunes of digital marketing would be if big companies disbanded their digital marketing arms. Four years later, it’s starting to happen, but what does that mean for those who’ve been digital specialists all this time?

Talking to agency heads recently for NMA’s Top 100 Interactive Agencies guide, one of the things that kept coming up was the fact that clients are getting more sophisticated in their understanding of interactive media. At the same time, there have been a number of stories in NMA about big blue-chip companies such as Unilever integrating their digital marketing functions into their overall marketing operation.

That this isn’t a seismic shift says a great deal about the spectrum of adoption of interactive media for marketing. However, among the heavy users of online, there is a noticeable shift in approach.

The first change is in marketers’ relationships with their agencies. There is a move to consolidate the number of digital agencies companies work with. Firms are looking to buy paid-for search marketing and search engine optimisation from the same agency that is designing and building their sites, for example. The trend can be seen in the number of design and build agencies that are winning more customer acquisition work.

There is also the question of digital strategy. About a year ago, companies started to realise how critical interactive communications have become. They responded by asking their agencies for high-level digital strategies, expecting them to provide considered advocacy of digital channels at the top table.

This challenge facing the agencies is further complicated by the multiple functions the internet can perform. It’s at once a marketing platform, a sales channel, a response mechanism and a non-stop focus group. As a result, discussions between clients and their digital agencies that begin with digital marketing can quickly broaden to cover many other aspects of the business, from sales to supply chain management. A fact which explains why it’s those companies closest to a pure-play model that are most likely to be consolidating their agencies, since they can see the benefits of integrating the suppliers through the entire customer journey and on into the rest of the business.

But there’s controversy here too, over the question of how important the integration of online and offline elements is, compared with the optimisation across digital channels. Andrew Walmsley, co-founder of specialist interactive media agency i-Level, is adamant that the most important area for integration is within digital, and that managing the relationships between on- and offline is simple by comparison. Many others, such as Unilever UK’s marketing communications planning and buying director, Rachel Bristow, take the opposite view. Bristow believes that deep integration across all media channels, rather than the “matching luggage” approach so derided a few years ago, will yield significant benefits.

So what is the future for digital marketers with large companies? Is it indeed a bad time to have digital in your job title?

There is, of course, no simple answer. But there are at least three compelling reasons to suppose that digital skills will be crucial, even if the term digital becomes redundant. The first is that interactive marketing spend has continued to grow despite the downturn, and is widely expected to be one of the most robust areas of the marketing communications budget. There is still a dramatic gap between the amount of time consumers are spending online and the effort (and money) companies are prepared to invest in trying to reach them. One recent story summed up the current mood for me; Barratt Homes, which has recently made significant redundancies, has turned to online marketing to shift its backlog of unsold homes.

What’s more, the world continues to become more digital. The TV industry has embraced interactive media, both through red-button interactive TV and video-on-demand, while interactivity is being built into outdoor advertising through the use of mobile shortcodes or barcodes.

And finally, there is an increasing recognition that the interactive space is increasingly where value is created and influence generated. Perpetual beta and the internet as research tool are established ideas, but earlier this summer I heard Jaap Favier, vice-president and research director at Forrester, tell a conference that, according to its latest research “ads no longer drive sales. Ads drive consideration, but conversations drive sales”.

Favier’s point was that people’s choice of a product, particularly high-price items, is increasingly driven by online word-of-mouth such as blogs, review sites and forums. So in order to drive sales, marketers will need to understand these new channels, and be able to influence them. That seems to me the sort of thing people with a digital background should be well equipped to do. Unless, of course, the PR guys get there first.

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