Digital--and social media, specifically--has forever changed the marketing game, and CMOs need to take note, according to speakers at "Brand New World: The Expanding Role of the Digital CMO," hosted in partnership with Bloomberg at its headquarters in Manhattan Thursday morning.
Jeffrey Hayzlett, who hosts Bloomberg TV's "C-Suite" series moderated the panel. The key takeaway: Living in this new world means a few important things. The first is simply that it’s imperative to keep up with the pace of change; second is that marketing leaders must organize to deal with the pace of change; and, finally, marketing budgets must be shifted around to handle all of this change, according to panelists.
Managing this complex world of marketing we’re now living in is the biggest challenge for marketing leaders, according to Valerie Buckingham, head of North America marketing for Nokia. Social media is affecting the pace of change and evolving consumer behavior online. Managing that has become almost impossible, she observed.
“We have embarked on a digital transformation,” Buckingham told attendees. “One big insight for our company is that people are interacting with our brand across different platforms. We are in the midst of up scaling the organization to think about digital and social, specifically, as a part of everything, not just marketing. That’s a big priority for us.”
Linda Boff, executive director of global brand marketing at General Electric, said that the pace of change in our industry is what keeps her up at night. Social media has spurred the development of new technologies and platforms, and figuring out what’s important and what that “next big thing” is going to be is harder and harder with each passing day.
“When you go to sleep at night and then wake up to find out that Facebook just bought What’s App, you ask yourself, ‘Should I have been paying attention to that?’” Boff said. “For GE, we have a first-mover mentality, so another challenge is balancing how much we experiment. We are proud that we do chase the shiny object, but it becomes a challenge when there’s so much to choose from.”
While brands such as GE and Nokia are plagued with figuring out the next big thing in social and digital as a whole, a brand such as Goldman Sachs isn’t really focused on that. This company is not, and never will be, obsessed with being a first mover, according to Lisa Shallet, managing director and head of brand marketing, digital strategy, at Goldman.
The reason is simple: There’s just too much regulation in the financial services industry, so moving fast becomes a challenge. There are layers and layers of approvals, revisions, and just too much back and forth.
“We have not aspired to be the most nimble in our communication with consumers,” Shallet explained. “It’s just not doable in our business. Our priority is communicating the brand and what we do in an understandable way. And, yes, the broader public is not going to be a customer. But you don’t want to not be understood.”
Organizing For Digital
Organizing for this change that both marketing and consumer behavior is currently undergoing is an important aspect of surviving in this brave new world. Which begs the question: Where do digital and social live within an organization? The consensus from all three executives was that social and digital should live everywhere.
About three years ago, Jenn Walsh led digital for GE; the company had a separate digital organization, for the most part. Today, digital lives in HR, legal, production, you name it. And what’s difficult, according to Boff, is that there isn’t one way to do this massive reorganization to the company and corporate mindset.
For GE, though, the solution was rather simple. It created a Center of Excellence, through which people are “tasked to think about tomorrow,” Boff said. Some of these individuals sit in the marketing organization in-house, while some are outside of the marketing department. But their job, overall, is to watch the space and keep their finger on the pulse. They’re responsible for finding all those new shiny objects and figuring out how GE can be part of the conversation.
Nokia, on the other hand, has developed a social marketing framework and strategy, and a set of working principles for guiding its current and future activity in social media across the entire organization. Part of that framework, Buckingham said, is considering the social opportunity in everything the company does.
When Goldman Sachs’ Shallet took her post four years ago, it was right when the financial crisis hit, and it was also the time when social media really skyrocketed. This was both a blessing and curse. It was a curse because consumers took to social media to bash the brand. And yet social media also allowed Goldman Sachs to follow the conversations happening online and communicate with consumers.
“If you look at how the financial crisis intersected with social media’s explosion, well, suddenly we were a household name,” Shallett noted. “Social media was emerging at a time when we really needed to communicate, and it has changed the culture of communication within the organization.”
As a result, Goldman Sachs has become more open to experimenting in digital, according to Shallett. If you look back to 2008, the company didn’t even have a digital budget. In 2012, Goldman Sachs launched its very first corporate advertising campaign, and although Shallett really had to make a case for it, she got the money to do it, and digital played a big role.
Digital and social media have also changed the game for budget allocation, Boff, Shallett, and Buckingham agreed. Nokia’s Buckingham said that Nokia puts more than 20 percent of its marketing dollars into digital.
“We’re putting a lot more into working media in digital channels,” Buckingham said. “And while the costs of research are offset by the influx of big data, we are now trying to get a better understanding of how our online activities connect to sales in stores. That’s something we are investing a lot more into.”
For GE’s Boff, the budget has changed and the mix has changed, too. But what’s most important and meaningful is that GE can now shout louder than it spends and that’s all thanks to the amplification that social media and digital channels provide. She said that for every $10 dollars GE spends on the Olympics, it is getting $1,000 back in benefit.
Another point made by Boff was that marketers are now spending a lot more of their marketing budget on technology than ever before, and that calls for a relationship between IT and marketing heads. Boff said that her technology counterpart at GE is her “BFF” and they talk all the time. The same holds true for Nokia.
“While there was a time, years ago, when you would go to the IT department and beg for money, that doesn’t happen anymore,” Buckingham explained. “That’s why this facility and thinking ‘digital first’ needs to be something that lives in the whole corporation, and not just in marketing.”