2010 B2B Marketing Budgets and Mix Trends Research Published

For three years running, Forrester has teamed with MarketingProfs to survey B2B marketers (in various industries and at different sized firms) to track marketing mix and budget trends. Reviewing the prior survey's results published in April 2009, I expected that the economy -- and burgeoning interest in social media -- would accelerate the shift toward digital channels throughout 2009 to an unprecedented degree.

Reviewing this year's survey results I was surprised that, while B2B marketers experimented enthusiastically with social networking sites (Facebook, LinkedIn) and microblogging (Twitter), social media have yet to create budgetary or business impacts on the marketing mix. (Note: this research looks at firms of 50 employees or more only. The data set includes results from smaller firms as well. Tim Harmon will likely publish on this data.) In fact, most digital media fair equally, and unremarkably, poorly on the list of "what works?" in the marketing mix.

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Customer Intelligence Can Drive Irrefutable Marketing Accountability

Would you classify your marketing organization as "highly accountable"? What I mean is, are you always able to accurately measure the true business value of your marketing efforts, and do your senior leaders trust the results? If you're like most marketers, the honest answer to that question is a resounding "no". Proving the business value of multichannel marketing is getting progressively harder—and more important—because:

  • Traditional marketing measurement practices are rooted in stable but inflexible tactics that leave marketers ill-equipped to keep pace with the real time nature of channel digitization.
  • CFOs wield ever-more influence over marketing budgets, which is driving your CMO to lean harder on you to measure business results with scientific rigor.
  • Your customers are in control; uncertainty and unpredictability are the norm; and marketers that can't adapt appropriately are doomed to fail.

This is where you come in. I believe that Customer Intelligence professionals are remarkably well positioned to address these challenges head on, and improve marketing accountability across the enterprise. Why? Because you sit at the cross-section of unfettered access to mountains of customer data from a dizzying array of online and offline sources. "Big data" as the recent article data, data, everywhere in The Economist puts it, is big business. CI professionals are right in the middle of it all helping firms capture customer data, analyze it, measure business results, and act upon the findings.

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Q&Agency: LEVEL Studios

Welcome to Q&Agency! Each week, I get to talk to agencies small and large and get to hear (in their words) what differentiates them and the experiences they create. To help bring some of that information to you, I'm showcasing an ongoing series of interviews with small to mid-size interactive and design agencies. If you'd like to see your agency or an agency you work with here, let me know!

On March 18th, I talked with Tom Adamski, President and CEO of LEVEL Studios. Edited excerpts from that conversation follow.

Forrester: Tell me a little bit about your agency?

Tom: LEVEL Studios was founded in 1995 in Santa Barbara. Today we’re headquartered in San Luis Obispo with offices in Los Angeles and San Jose. Across the three California studios we have about 200 people today. We’re focused exclusively on the digital space and we’re independently owned and operated. Like other digital agencies, strategy, creative design, technology, and the connection between those three areas is the key driver of our business. Today that means we’re working with marketing communications groups and we have a growing client segment in product development and design.

Forrester: What is your elevator pitch?

Tom: We’re an independent digital agency that produces products, services, and experience for brands as a way for those brands to build community and meaningful relationships with their customer base. Our three west coast studios focus on user experience, digital media, and application development. We’re a relationship based organization based on long term, retention based strategies both for our clients and our staff. Our 3 largest clients have been with us on average ten years. Those lasting relationships produce better business results for our clients and for our agency.

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ROI, Wal-mart and SKU reduction--and what we may learn about Social Media ROI

I've recently found myself in interesting discussions--one might call some of them debates--about ROI and Social Media.  In recent weeks, Social Media ROI was the agenda for meetings with several clients, the focus of a panel on which I participated at Digiday Social, and a lively topic of discussion at a dinner of marketing leaders in town for the OMMA Global event.  And today I read an article about Wal-Mart that got me to thinking about the dangers of too narrowly defining ROI.

 

It's interesting to hear the wide range of attitudes toward social media ROI.  Some companies measure quite a bit about their social media activities but do not evaluate ROI in its most literal definition:  The financial return generated by a specific monetary investment.  Others go through a great deal of effort to measure ROI, creating complex models to calculate an approximation of financial return. 

 

Some in the direct marketing space are beginning to value their social media efforts much as they do their PPC campaigns--assessing the cost of participation compared to the clicks, conversions and sales generated from trackable links seeded into tweets and Facebook posts.  This sort of measurement is essential and inevitable for companies that sell direct to consumers, but it's important companies not become overly narrow and begin to assess social media as just another click-generating channel. 

 

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It's Not Too Late For Nestle

 

On Friday, I attended the Justmeans’ Social Media and Stakeholder Engagement conference on how Social Media can be used for Social Good. I almost didn’t make it. I thought, Yes, this should be interesting, but how much does corporate responsibility and sustainability matter to the day-to-day of most Interactive Marketers? At the conference, I started getting tweets that called out Nestle on the tone of its Facebook status updates. Fast forward 72 hours, and Nestle is dealing with a PR crisis of Epic Fail proportion, as Facebook “fans” slam its business and environmental practices in the developing world. Yep, it matters.

 

Plenty has been said today about how Nestle failed. But I keep thinking about another question, “Is it too late for Nestle?” And maybe it’s the eternal optimist in me, but I don’t think it is. Nestle still has a chance to shape the tone of the discussion by sharing next steps in social communities. Interestingly, Nestle did respond to the Greenpeace allegations in a March 18 statement on its website, and they told traditional media outlets on Friday that they would remove a questionable supplier from all parts of their (very complex) supply chain by mid-May. But that word isn’t getting out - Clearly, traditional outreach isn’t enough. Bjorn Edlund, former EVP of Communications for Shell, joked at Friday’s conference: “The best way to hide data is to put it on your corporate website.” Case in point.

 

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A new data player

An old Ad.com colleague of mine, Mike Peralta, recently joined a newly launched start-up called Magnetic, which you can read more about here. In short, the company provides DSPs and their kind with search behavior data to use in display retargeting campaigns. I told Mike, I find it odd that this is the first time I'm hearing of a provider who does this. Especially since Yahoo! based their entire behavioral targeting business on this principle years ago. But here we are, with another way to retarget valuable customers, and I think its a really good one for a few reasons (not just because Yahoo already did it, which isnt always a good reason.)
- It will get more display marketers thinking about the interplay between display and search.
- Unlike offline data, search data is easy to update in real time or near real time.
- There is a lot of it, so a lot of people can play and experiment to find what works.
So while I have publicly cautioned against the "more is more" pile-on effect we are seeing in the data space right now, I do think search data has a justified place at the table.

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Where US online retailers are operating in Asia

Over the past few months, we’ve fielded multiple requests related to the online shopping market in Asia. Retailers and vendors alike are looking to position themselves for long-term success given the rapid online growth rates in the region:  By 2013, for example, close to half of the global online population will live in Asia, with some 17% of the global total coming from China alone. To see how US online retailers are taking advantage of this shift, we took a look at the top 50 online retailers on the Internet Retailer Top 500 list and mapped their transactional sites in Asia. A few observations follow.

Japan tops the list, especially for companies with only one web site in Asia. What was interesting as we worked through the list was that relatively few of leading online retailers in the US operate transactional sites in Asia, and far fewer operate in multiple countries. Several top online apparel retailers, for example, operate a web site for Japan only: Lands’ End, L.L. Bean and Cabela’s have all taken this approach.

Consumer technology companies have the broadest regional reach. By contrast, online retailers in the consumer technology arena tend to have a broader regional presence. Dell, Apple and SonyStyle operate in multiple Asian markets, with Dell and Apple having the most transactional web sites in the region despite Sony's Asian roots. Office Depot also has a strong commitment to the region with eCommerce sites in Japan and China, as well as in South Korea.

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Why I Have A Problem With How Industry Analysts Use Twitter

By Peter O'Neill

I thought I would expand a little on my aside comment in last week's blog which was actually about HP. In the introduction to the blog I noted that we analysts seem to be abusing Twitter. I was so provocative that I named my colleagues “adolescent journalists” because they broadcast tweets ad verbatim as the HP speakers went through their presentations. I have noticed this has gotten progressively more (as far as I am concerned, worse and worse) over the last 12 months at various analyst retreats.

Many of these colleagues have responded to my blog and basically asked “What’s your problem with this?” Well, I certainly do not want to be seen as a “grumpy old man” (though I love those books) - ie. Someone who is not up to the times. While I am turning 54 years of age today, I think I do understand Twitter, and use it; and I think I can blog adequately as well. Then again, we analysts at Forrester have been well trained by our Marketing analyst colleagues who are at the forefront of all these developments. Our latest research on “Using Twitter for eBusiness” discusses how companies use Twitter but it doesn’t address the usage I am on about here. So, the issues I have with our just typing in every 140 characters of whatever the person on the stage is saying is as follows:

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Retailers Plan To Expand into Online Customer Service

There was an interesting article in The Wall St Journal last week about the value of social media. In a piece called “Entrepreneurs Question Value of Social Media”, Sarah E. Needleman quotes Pace University's Lubin School of Business marketing professorLarry Chiagouris regarding the challenge eBusiness executives face in assessing social media: “The hype right now exceeds the reality”. 

I agree that the reality has not always lived up to the hype.  But was the hype too good or the reality not good enough? 

The WSJ quotes a survey of US small business owners saying that only 22% made a profit from promoting their firms on social media, 53% broke even, and 19% lost money after promoting their business on social media. 

But profit doesn’t equal social media success. Social media can have many objectives and customer service is a growing goal. 

eBusiness executives are increasingly looking to social media as part of a larger customer service strategy; currently,  in our recent survey of retail executives (Q4 2009 US Retail Executive Online Survey), 54% offer customer ratings or reviews, 23% have an online community or forum, and 16% do customer support through Twitter.  These numbers are poised to grow in the next twelve months with a further 30% planning to implement customer ratings or reviews, 27% planning an online community or forum, and 21% planning to provide customer support through Twitter. 

eBusiness professionals must ask the following questions before they launch social customer service (or any social strategy) to ensure their implementation and subsequent assessment reflect the real potential:

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Do Mobile Coupons Matter?

My colleague Julie Ask just published a piece on the reality of mobile coupons in response to questions like “do consumers use mobile coupons?” “should we be developing a mobile coupon offering?” and “what technologies should I adopt to support mobile couponing efforts?” – questions that she and I get asked with some frequency.

 

I was involved in some of the initial structuring of this report and then also involved in the editing phase.  And I would love to recommend it to interactive marketers. Here are the most important takeaways:

 

  • Consumers like the promise of mobile coupons, but there is not yet mass adoption.  Mobile coupons promise to be a convenient way to aggregate customized discounts all in a single place (your mobile phone) that is much easier for storage than say an envelope of clipped paper coupons.
  • Mobile coupons appeal to advertisers too, but technology hurdles prevent mass utilization.  Advertisers love the idea of being able to offer targeted promotions that are cheaper to deliver and redeem than traditional coupons.  But the reality is that scaling redemption technologies and processes at check out is pricey for the limited coupon-using audience today.
  • Advertisers should start small mobile coupon trials now.  Mobile coupons don’t need to be your top marketing priority for 2010 (that honor goes to paid search, display ad, advanced email and social media) but we do recommend now as a good time to start a trial.  Vendors like cellfire can outsource the management and distribution of mobile coupons and offer flexible terms in an effort to sign up new advertisers.

 

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