The year ahead in marketing and digital: Part 2 – marketing trends

Econsultancy founder Ashley Friedlein continues his look ahead at the digital and marketing trends that will define 2017.

change transformation article

Every year I pick out digital and marketing trends and developments which I think will shape the industry and its planning and thinking in the year ahead. Here are my marketing-specific trends for 2017. In part 1, I looked at broad macro trends affecting brands, and in part 3, I’ll look at digital.

Marketing transformation

The ‘death of digital’ debate rumbles on but certainly I have noticed brands talking not only about digital transformation but also about marketing transformation. Usually the initial focus is a restructure of the marketing organisation, often with the (re)integration of digital marketing, and often with a new person at the top who is increasingly likely to be a CCO (chief customer officer) rather than CMO.

The consultancy Oystercatchers (a sister brand to Marketing Week and part of Centaur Media plc) notes a trend towards clients bringing more marketing teams in house – maybe not permanently, but building dream teams for specific tasks.

Accompanying this internal transformation is a re-evaluation of supplier relationships – most likely leading to fewer, deeper relationships, as I predicted in part 1 – and zero-based budgeting has become more popular as another way to ‘reset the clock’.

The area that I find most interesting is the idea of ‘marketing ops’, an operating system for marketing. This is one effective way of keeping focus but also dealing with complexity and delivering operational efficiency. Just as (enlightened) IT has ‘dev ops’ it makes absolute sense to me that marketing needs ‘marketing ops’. Marketing is adopting ‘agile’ from the world of technology (incorrectly in many cases, but still…) and could do well to adopt ‘ops’.

If you want to get some insight into this emerging area of marketing I recommend you look at this presentation on marketing ops by Justin Dunham of Urban Airship.

Customer experience still top of the agenda

Customer experience (CX) has been a hot topic for a few years now but it shows no sign of cooling in 2017. Every single piece of market research the company I founded, Econsultancy, does into what topics marketers are prioritising – and indeed the equivalent data I have seen from other analysts – shows CX topping the charts.

The drivers for this are partly just to meet customers’ rising expectations – i.e. improved experiences, particularly digital and multichannel ones, are something that you just have to do. Partly, of course, it is in an effort to improve ROI through better conversion and retention rates.

This year will see more ‘customer journey mapping’, more defining of customer ‘personas’ and further efforts at personalisation. And, according to Econsultancy’s recent ‘Implementing a CX Strategy’ research, it is the marketing function which is most likely to own CX within a business. Only 8% of companies view themselves as ‘very advanced’ in terms of customer experience maturity yet (source: Econsultancy/Adobe QDIB The CX Challenge).

Multichannel will remain a big focus for customer experience improvements. Amazon Go, which entirely automates the in-store experience using sensors and machine learning, shows what is possible when blending the digital and physical. Multichannel should not be about the distinction of physical and digital channels but about experience fulfilment: what works best for what experience and customer need.

In 2017 we will move away from channel execution to thinking more about touchpoints and brand (‘omni-brand’ anyone?) experience. Rarely is there a single linear customer journey; more usually customer journeys are pretzel-shaped.

‘Data lakes’ and ‘data ops’

The move towards brands taking greater first-party control of their data as a strategic asset will continue. Expect to hear more about ‘data lakes’ in 2017 and dedicated ‘data/analytics ops’ teams comprising data scientists, engineers and analysts.

The focus will be on getting better access to the data that is already available and smarter reuse of analytics assets like algorithms and models. Perhaps this year more marketers will finally be able to get a universal view of cross-channel performance.

In 2017 we will also start to recognise the need to use data to market to machines. We already know the value of structuring our data properly through schematic language to enhance how we appear in search results. But as personal assistants and IoT devices increasingly intermediate between our offerings and our customers we will need to learn how to ‘teach’ these machines with data.

Measurement scrutiny

Last year saw a lot happening in the area of measurement, performance and metrics: McDonald’s zero-margin Omnicom deal setting a new precedent for agency contracts; Facebook’s erroneous video metrics; the ANA’s concerning report into lack of transparency in media buying by agencies.

As a result, there will be a lot of scrutiny from senior management around how marketing is being measured. Some may reach the nirvana promised by the aforementioned data lakes, assuming they can find the talent to realise them and harness their value, but for many this year’s focus will mean having fewer KPIs but being more rigorously held to account over those.

Marketing attribution will still be challenging (less so for Google and Facebook): according to Econsultancy’s State of Marketing Attribution research 76% of respondents are struggling to find the right staff to deal with attribution.

Rethinking segmentation and targeting

Last year saw a lot of debate around approaches to customer segmentation and targeting. How granular is too granular? Is ‘mass targeting’ the answer? How does programmatic work in the marketing mix?

In 2017 we need to focus on resolving these questions. As ever, the answer to all will be ‘it depends’. It depends not just on your product and audience but on your business strategy, e.g. if you are going after market share at any cost versus focusing on profits and margins.

Approaches to targeting are interesting in as far as they expose the sometimes differing philosophies and approaches of ‘traditional’ and ‘digital’ marketing. The former typically has a higher degree of planning and research up-front and the segmentation and targeting models are often built on more prescribed geo-demographic data attributes.

Digital, meanwhile, espouses a test-and-learn approach to validate hypotheses, starting small and scaling what works, using technology and data to optimise for successful outcomes – for example, using programmatic advertising to optimise for sales using lookalike targeting, which may not care what geo-demographic segment a prospect belongs to.

Digital focuses on assessing potential customer value based on real-time, dynamic and contextual data variables which might include the weather right now, your precise location right now, what device you are using, what transport you are currently in, what you have just searched for, just clicked on, etc.

This year, as part of our marketing transformation (see above), we need to resolve these tensions between ‘traditional’ and ‘digital’. This will play out in organisational design but also in our processes, culture and capability development.

Ashley Friedlein is the founder of Econsultancy and chairman of real-time data platform Ably.