A new era of marketing
Perhaps, not a single discipline (with the exception of information technology) today is developing as fast as marketing: it is already impossible to build “marketing by Kotler”. The goals of professionals remain unchanged – to convey the right message to the target audience, to interest it, to strengthen loyalty. However, the tools and communication channels have changed. Russian business (except for the most advanced companies) is still lagging behind the western one, since our competition is not so strong. But over time, the following trends will influence the work of all marketers.
Marketing is turning into technological discipline, and this process is irreversible. If in the early 2000s, a business had 2-3 sources of customer information on its strength, then today the data is literally everywhere.
According to Dmitry Kudinov, CEO of CoMagic, companies use an average of 10-20 channels for advertising and the same amount for communication with customers. The amount of information that a marketer is working with today has become an order of magnitude larger. The cycle of making purchase decisions has become more complicated – customers are protected from information noise, they need more high-quality “touches” with the brand.
In response to these challenges, the industry of IT solutions for marketers is growing. Studying the marketing technological landscape in the United States, Martech Today counted 150 players in this market in 2011, in 2000 there were 2 thousand, in 2017 their number reached 5 thousand. This pace is likely to continue. According to Yandex Services Marketing Director Andrei Sebrant, the world is already arguing about who spends more money today on IT – CIO or CMO (see also the article “CMO and CIO: two heads are better,” “HBR – Russia, October” 2017). The costs of many companies on technology are comparable to their advertising budgets.
Last year, Dmitry Kudinov attended the Martech international conference in the USA and concluded that segments such as CRM, systems for automating visitor engagement, analytics, platforms for accumulating and exchanging user data are developing most rapidly.
In addition, marketers began to actively use BI (Business Intelligence) – IT systems that help store, analyze and visualize information. According to Kudinov, a marketing technologist profession appeared in the USA – a marketing technologist. These specialists are responsible for the integration and coordinated work of all the services and sources of marketing data used in the company.
The goal of marketing automation is to accelerate the performance of routine operations, as well as using machine learning to achieve results that are beyond the reach of people. In this regard, 2018 will be a turning point: last year, the American company Adgorithms launched the Albert robot algorithm, which, as it turned out, is able to replace an entire agency.
One of the customers of Ad Algorithms, the owner of Cosabella, was unhappy with the decline in sales and turned to artificial intelligence for help. A month after the launch of Alberta, the return on investment in digital advertising increased by 50%, and the cost decreased by 12%. If previously social networks generated 5-10% of Cosabella’s revenue, then after working with the robot, the figure increased three times, and the increase in purchases via Facebook amounted to 2000%. Six months later, the company’s customer base increased by 30%.
“After Albert’s achievements in paid search and SMM, I will no longer entrust this work to a person,” said Media Director of Marketing at Cosabella Courtney Connell.
Albert also assisted a Harley-Davidson dealer in New York. The robot found that the target audience of the company is much wider than its leaders thought, and found buyers whose existence they did not even realize. As a result, the dealer increased website traffic by 566%, and motorcycle sales by 40%. According to Andrei Sebrant, artificial intelligence allows you to generate insights based on data analysis, but Albert went even further – he creates and optimizes an advertising campaign, increases sales. Marketers are no longer needed. In the coming years there will be more such examples.
Targeting and personalization
Mass advertising campaigns – yesterday’s marketing. Traditional segmentation is a thing of the past, because today it is possible to form groups of clients, make personal offers for them and dramatically increase conversion. The amount of accumulated user data plus machine learning allows you to build almost individual relationships with customers.
However, as Svetlana Mironiuk, head of marketing and business development at PwC, a former vice president of marketing at Sberbank, told a lecture at the HSE, less than 20% of companies in the world use data for marketing decisions on a daily basis, and in Russia this percentage is even lower. No one has a complete picture of the life of clients yet, but many companies buy information or try to accumulate missing data on their own.
In particular, for this, mobile operators open banks, and banks, in turn, create virtual mobile operators.
Vimpelcom in 2016 conducted about a thousand marketing campaigns at the same time (that is, it made a specific offer to a specific group of customers through a specific channel), in 2017 there were already 6 thousand such campaigns, and soon there will be more. Machine learning helps optimize these processes. The operator also identified at least six major major customer segments with which it is necessary to communicate in different ways. “Changing the pricing policy or, say, the design of the tariff plan can cause different reactions for different groups of customers. You need to talk with some, give rational arguments to others, do not bother the third ones at all, ”says Marek Slachik, executive vice president of mass market development at VimpelCom.
To create a customer profile, specialists used big data, and also correlated them with psychological characteristics. After the introduction of such segmentation, the number of calls to the VimpelCom call center over the year decreased by 20-25%. In addition, when receiving a call, the operator knows in advance what kind of psychological type the client belongs to and how best to communicate with him. By 2020, Sberbank plans to make 95% of its proposals based on reliable customer information. In particular, electronic customer profiles will be compiled here – on which channel and at what time it is convenient for them to talk, how people manage finances, pay loans, etc.
Next in line are new targeting options. For example, sites that are tailored to a specific client. Or interactive outdoor advertising – different players are already experimenting with this format. Yahoo is now patenting a new system when an advertising billboard equipped with cameras, microphones, retinal scanners and a speech recognition system will monitor passers-by and record their reactions. As a result, advertising can adapt more flexibly to the clusters of passing people.
Marketing convergence with sales
Marketing departments will no longer conflict with sales departments. It so happened historically that one unit spent money, the other earned it. The marketer “clung” to a potential customer, and his work was ending, and the seller did not always understand who was brought to him. A new approach to doing business removes these contradictions. According to Dmitry Kudinov, a new term has recently appeared in the USA – smarketing, which refers to the active interaction between sales and marketing services. “Companies are no longer discussing whether it is necessary to synchronize the activities of both divisions, but rather, discuss how to do this and which KPIs to use. We are talking about a common goal, a common sales funnel and end-to-end analytics, the exchange of information about advertising activities and the percentage of closed transactions, ”says Dmitry.
For example, the American company Domo (analytic services for Internet marketers) adopted a smarketing approach, completely rebuilding its customer acquisition system.
According to Kudinov, the company’s marketers, with the help of account managers, found out who their most loyal and loyal customers were, and asked what attracted them to work with Domo. It turned out that they consume the service as a “morning newspaper” – in the morning they study the report on the main business indicators for yesterday, find a couple of insights and go to the office to implement ideas. The company launched an advertisement under the slogan “Start your day with Domo” and attracted a new segment of entrepreneurs who are similar in profile to the most money customers. All this was made possible thanks to the close interaction of marketers and sellers.
Some companies go even further and introduce a new position – Chief Revenue Officer, who is responsible for the revenue stream. For example, in 2016, Marek Slachik came to VimpelCom to head the work of the mass market marketing unit and the distribution development unit. “We need to make sure that all departments working with clients, conditionally, sit at the same table and agree on how to solve specific problems. And to improve interaction, we began to use the principles of agile, ”says Slachik.
Large FMCG companies are already abolishing marketing departments. For example, last year Coca-Cola united several divisions – marketing, client and commercial, and also introduced the position of Director of Development, who is now responsible for technology, innovation and sustainable development. Colgate-Palmolive, Coty, and Mondelez did the same. And this process is likely to continue.