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DIGITAL MARKETING MATURITY PART 1
Digital Marketing Maturity – brought to you by our friends at Google Marketing Platform. Visit Google Marketing Platform to find out how they can help your business.
Sonic Branding: [00:00:00] Ashton, Ashton, Ashton Media!
Des: [00:00:05] you know, it’s not just about having a shopping cart, it’s about taking it to the next level so that people have a good experience tailor that experience and create a seamless experience for people that are now all online. And those will be the winners.
Janet: [00:00:18] If you’re slow to the race, then you won’t be able to benefit.
Michael: [00:00:23] brands, continue to respond and adapt to changes in consumer behavior.
Barney: [00:00:29] The reality is consumers are spending significantly more time on digital media because of social distancing and working from home. It’s really important for brands to be able to engage with consumers in a meaningful, personalized manner while also maintaining the right tone at these times.
Gavin: [00:00:54] Hello. I’m Gavin Stewart marketing director, and co-founder of Ashton media. And your host of the Ashton cast digital marketing maturity series brought to you by our friends at Google marketing platform. These are short, sharp stories and solutions to the biggest challenges in marketing, advertising, media and CX.
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For more info. In this episode, we take lessons from the Mexican Aztec empire and learn how reshaping traditional methods can allow us to succeed in a post COVID-19 world.
Back in the 12th century, over the other side of the Pacific Ocean in Mexico, the Aztec empire had a problem. They had plentiful water and a prosperous Valley, but the swampy terrain meant a shortage of workable land to grow their crops in Europe. This would have been caused to settle elsewhere, but the Aztecs had a solution.
They created “Chinampas”, artificial islands, floating gardens within their lakes. This investment gave them rich convenient land where other empires saw an inaccessible landscape.
For companies in the world post COVID-19, their rich supply of customers can be inaccessible in traditional physical spaces. Pandemic restrictions have limited face to face interaction while the digital space has yielded even higher returns for companies ahead of the curve. The Aztec empire used bold, innovative methods of agriculture to use their landscape effectively in our modern world.
That approach is digital marketing maturity will speak to a range of guests with broad roles in the marketing industry, consulting firms, tech providers, eCommerce businesses, and advertising agencies all will help us identify just how useful and crucial digital marketing maturity has become.
This episode of AshtonCast is brought to you by Google Marketing Platform. Google marketing platform is a unified marketing and analytics platform for smarter marketing measurement and better results.
The Aztecs builders had a great empire originating in the city of Tenochtitlan within modern day, Mexico City built on an Island in a Lake, their valley was lush and fertile. But as they grew, so did their need for crops and for a city on an Island, land comes at a premium for traditional agriculture.
This was a hard limitation, but this Mesoamerican culture did not have traditional methods of agriculture. They had Chinampas. The Aztecs built artificial islands into the Lake piled above water level with rich soil from the shores and reinforced with reeds. These islands yielded, plentiful and accessible crops.
And when the Spanish arrived, they found an estimated 90 square kilometers of Chinampas had been made. This limitation had been overcome by the Aztecs innovative approach and turned obstacle into abundance. In 2020, we have new limitations that you have not prepared for. Social distancing, isolation and the diminished effectiveness of physical presence.
These essential safety measures have also separated brands and services from their customers. But in this restricted landscape, we’ve seen companies thrive where others have stalled, not face to face, but in the digital space where companies have always benefited from, but now need digital marketing maturity.
We spoke with Des, ODell, CEO of Resolution Media, Australia about which industries took hits and which ones dodged them.
Des: [00:05:10] That’s when I started to go, Holy shit. You know, there’s, there’s something big going to happen.
Gavin: [00:05:15] One landscape that has taken the earliest hit in the economic shift travel from mid-March 2020 major international airlines, as well as domestic charters suffered massive shutdowns in the face of plummeting consumer share.
Des: [00:05:29] Obviously travel has been impacted massively. You know, the guys at the other end of the spectrum, fast food, telco, financial services, that sort of stuff, not that impacted. And some of them doing quite well actually.
Gavin: [00:05:41] With travel, being an early sufferer of the ongoing pandemic businesses worked hard at creating solutions, adapting to a rapidly changing set of rules and regulations.
Some with more success than others. Barney Pierce, Director of Google Marketing Technology Platforms identified innovators in Australia that have kept the interest of their consumers and their brand at the heart of their response.
Barney: [00:06:04] I’ve been really impressed. Lots of organizations have quickly adapted to be more helpful to their customers and the broader community.
A couple of examples that come to mind, you know, we saw beauty brand Mecca rollout, virtual services, like personalized consultations over the video chat. To reward customer loyalty at a time when planes were kind of largely grounded, Qantas extended all their frequent flyer miles status by 12 months, even organizations like Myer, they relaxed return policies and reduce the threshold for free delivery.
Lots of great examples like that. Woolworths and Coles prioritized community needs by offering boxes of meals and snacks and essential items. Free delivery for people with disabilities, seniors and other folks in managed care isolation. A lot of this has been communicated quickly through technology, as well as having a strong online presence.
Gavin: [00:07:00] During this time COVID-19 has forced companies into new approaches and spaces to retain their consumers and accessibility, but which companies haven’t needed to adapt? E-commerce established companies with strong digital presences have been well prepared for a shift into a digital space. Janet Ranola, Paid Media Manager of koala.com. Spoke to us about the experience of a brand that is digitally mature in the world, post COVID-19.
Janet: [00:07:26] Well, koala.com is an online furniture retailer. It’s kind of surprising really because initially we’re pretty much bracing ourselves for a downturn and a reduction of the number of transactions.
Because everyone is financially impacted by the spend dynamic, but I guess as people actually work from home and there’s practically nothing to do, but go online and they wanted to maybe keep themselves busy. So they go and see, maybe I can do some home improvements or I can buy some furniture.
And we’ve seen a steady increase in the number of our transactions since late March. And it hasn’t stopped since then. So I think we’re one of those lucky ones. We’re actually making sure that we’re also giving back to the community. So I’m not really sure or if you’ve seen on one of our TV ads that we ran, I think mid-April, and we gave away $200 vouchers, from Deliveroo, whenever they purchased a furniture item from us so that people can actually just support the local businesses.
So koala.com is actually pretty good at that as well.
Gavin: [00:08:42] Janet and koala.com found themselves handling not just business as usual, but with growth in a time that others were happy to mitigate damage. In fact, Janet found the ability to become more effective in the new digital landscape
Janet: [00:08:56] in terms of paid display the number of ad placements has just gone through the roof. A lot of people are going online right now. And at the same time, a lot of advertisers are pulling back their budgets. So, you will see that my average CPMs are actually dropping and it’s not like. Just a 5% drop. I actually see like a 30, 40% drop in the average CPM.
And even in the cost per view for the YouTube campaigns that I’m running. It’s like, I usually see an average CPV of around 10 cents. And then now it’s down to 3 cents as an eCommerce company. It’s pretty good to run those kinds of media right now because you can actually get cheaper traffic.
Gavin: [00:09:48] With koala.com, digital marketing maturity, paid dividends.
They’ve been well-positioned to react to a shifting marketplace. They’ve been well established where other companies scramble to create a presence and at a time of uncertainty, it’s important to ensure you can still reach your consumers. Michael Schniering, Managing Director of consulting firm BCG speaks on consumer behavior and the need for brands to adapt to a new world.
Michael: [00:10:13] Consumers started responding and changing very quickly and changing behavior. And what companies have looked at over the last. 12 months, two years in terms of consumer behavior. You know, my view is that it no longer predicts how consumers will behave, particularly during this phase where we still have restrictions on the way that people can move.
And the past will no longer predict how consumers and our customers will behave and that’s important for me. I think the question will be what will stick in that behavior in a post COVID world and how different will that behavior be in terms of channel and types of transactions going forward and how long that lasts and how companies or brands respond to this is now changed probably forever in my view.
So we are entering a new norm.
Gavin: [00:11:11] This episode of AshtonCast is brought to you by Google Marketing Platform. Google Marketing Platform is a unified marketing and analytics platform for smarter marketing measurement and better results.
Sure. We can look to history for useful lessons and the Aztecs are just one example of innovating through adversity, but there are more recent crises that global business has had to contend with.
Recent enough that Barney Pierce of Google Marketing can remember his experience managing through the global financial crisis of 2008.
Barney: [00:11:43] I think from a business perspective, the GFC was probably the closest thing I’ve had to this experience. You know, I was actually managing the financial services sector during the time and working in New York for some of that period, which was the epicenter of the financial crisis.
Really, you know, budgets and jobs were slashed. My customers were on the front page of every newspaper. It’s probably the most challenging time in my career trying to help customers in my own team really navigate through this crisis.
Gavin: [00:12:14] Barney led his team through the GFC, navigating those treacherous times.
And while the GFC might be the closest match for the pandemic financially, there are more differences than similarities and koala.com’s. Janet Ranola identifies one of the chief differences between the two. The speed.
Janet: [00:12:33] I think 9/11 and GFC, they have a lot of impact globally as well. I don’t think that it’s comparable to this pandemic, how fast it actually affected everyone is pretty much like nothing that we’ve actually seen in the global financial crisis, we actually see that it took them about maybe 18 months to be able to see that the brunt of the impact of the global financial crisis. Whereas with coronavirus, it actually took them like weeks.
Gavin: [00:13:09] This rapid response, hasn’t been the only difference we’ve seen. These effects can be widespread, severe, and may reach industries in ways we don’t expect.
BCG’s Michael Schniering speaks to us about how uncertain this reactive environment can be.
Michael: [00:13:24] Looking back at the GFC, I think is informative and can give some indication of what happened. Equally, I think we are genuinely in uncertain times now as to what is going to play out in response to this. So, having said that when we looked at what had happened during the GFC in Australia, at least, you know, a few things happened.
First, consumer confidence dropped quite substantially. And of course the story was different by different sectors. During the GFC, you know, we saw, spend categories like transport services, purchase vehicles decline around 30%, and that was an economic crisis only. And I say only now, given the situation we’re in, you know, it feels mild compared to where we are now.
Look to different sectors, different categories as to what the change was because it did vary quite substantially in response to COVID we’re seeing the same thing now, but the response of consumers and the impact on different categories and spend has varied by different sectors.
Gavin: [00:14:23] Broad changes in consumer spending means that brands have a greater need to consider the holistic identities of their consumers.
To maintain their connection to customers. Brands need the information to effectively reach them in spite of mounting financial considerations, but what are our longterm expectations for the state of the economy? Resolution Media Australia’s Des ODell shares some encouraging insight into our trajectory.
Des: [00:14:49] Generally GDP and ad spend, they follow each other. So if GDP is going up, ad spend is going up. If you look at what’s happened over 9/11 and over what happened at the GFC, the correlation actually went the other way. So there’s massive decline in ad spend in the year post these major events.
But what’s interesting about it is, is it only happens for a year and then it recovers significantly way to the other side. If you look at all the data, for Australia and the same applies globally, in most cases, Ad spend jumps back very quickly. The differences is that what we facing now is probably, you know, it’s a health and a financial impact, whereas talking GFC, it was just finance, you know, at least from where I’m sitting in, the data that I’m seeing.
And from what my colleagues are telling me, the Asia Pacific region looks like it’s probably been impacted the least out of the rest of the world. And then within that region, Australia is looking pretty good compared to some of those other countries in Asia. So we are definitely not seeing the worst of this.
Gavin: [00:15:56] with the effects of the GFC in mind, we can expect a shifting landscape for a long time to come, but history also hinted as heading to growth and recovery with physical spaces, having potentially long lasting changes.
We’re left with one pressing question. What approach brings brands success in the environment right now?
Adapting to new landscapes requires investment. The Aztecs didn’t find new islands. They built them. It took an investment of time, labor and resources for their farmers to create these invaluable structures for brands today. Our new landscape is the digital space and Mr Schniering of BCG talks on how investment into this space has moved from advantage to necessity.
Michael: [00:16:46] I think this is one spot where continued investment in capability, I think is very important. It always has been, but it’s now even more important as brands continue to respond and adapt to changes in consumer behavior. So I think those that were most mature had the sorts of capabilities that are critical for this environment, the need for these capabilities, which have always been there.
Are now much more apparent and more acute. So the importance of lifting maturity and investing those capabilities I think is now even more important.
Gavin: [00:17:21] So digital presence has become crucial to brands in 2020, but that presence isn’t easy to obtain. And while your consumers should find it as simple affair, a company requires a holistic approach.
Mr. Odell of Resolution Media Australia talks about how comprehensively the digital experience needs to be considered.
Des: [00:17:40] You’re learning about your customers and you’re tailoring that experience to them. The engagement is higher. The conversion rates are higher. If you talk about, you know, personalization at scale, there’s enough tech around these days where you can deliver tailored messages to clients multiple times through the funnel, your return on ad spend is way higher.
Overall return is better, and those are the people that are going to continue to get funding and continue to win.
Gavin: [00:18:04] Companies with a measure of digital marketing maturity have had valuable returns for their investment. While brands earlier in their journey may treat these as potential benefits. The digitally mature have had their advantages become only more apparent Ms. Ranola of koala.com sheds some light on both the resilient structure of eCommerce and how essential adaptation has become.
Janet: [00:18:27] When you are digitally mature, you’ll be able to serve your customers in any type of distribution. If in case that your other line of distribution, that is the retail outlet, it’s not available, then you’ll be able to reallocate your resources and you will be able to come up with another strategy to be able to serve your customers through your online platform.
Koala has always been an online company. So for us, there has been no change in the way that we actually do business. The only struggles or the only challenges that we actually have is of course our supply chain. I think for, in terms of how you approach or how you work towards digital maturity, it hasn’t exactly changed.
But I think what actually changed is the pace on your way to get there. How fast can you actually get? There is the one that you need to look into, but the approach will still be the same,
Gavin: [00:19:33] our approach to the digital landscape and the value of digital marketing maturity is clear. The digitally mature reap benefits and have greater adaptability to react to uncertainty.
Adapting to this productive space has proven beneficial for many companies, but COVID-19 has turned it optional edge into an invaluable investment. Mr. Pierce of Google outlines, the value that brands can take from increasing their digital presence, as well as the long-term benefits of this experience.
Barney: [00:20:02] Most organizations are experiencing unprecedented change, including significant shifts in consumer behavior, and most will need to get more out of less marketing dollars. So, a few things we consider as folks who are evaluating their digital marketing and sort of trying to adapt to the dynamic conditions.
I think I’ve mentioned this before from our own marketing teams, but you know, from some of the more advanced customers stay on top of consumer data and market trends. To keep up with and take action on these shifting consumer behaviors measure and invest responsibly. You know, even in tough times, you should ensure you’re investing responsibly and therefore you should not stop measurement.
You should be squeezing more out of your tech. The reality is most customers aren’t leveraging the full potential of the tech they use. And I mean, now’s as good a time as any to do it. So I think the final thing we’re recommending for folks who have a little bit of downtime, or, you know, they’re working from home is learn some new skills, you know, as we adjust to new ways of working online education can play a big part in helping us develop new skills.
And I think the final thing is. The silver lining in this is that leading through periods of really extreme complexity helps us prepare for a future. I think that’s more multidimensional. That’s fast paced, it’s more automated. It was certainly the case for me going through the global financial crisis. I feel like I have a better playbook and much higher level of resilience to navigate through crisis, which I’m grateful for now, really, despite it being a very challenging time in my career.
Gavin: [00:21:43] For modern brands looking to maintain their competitiveness and connection to consumers. Take note from the innovative measures of the Aztec empire, whether you’re building floating gardens in a central American Lake, or advancing your digital marketing maturity. The lesson is clear. Reshape your approach, adapt to your landscape and reap the rewards.
I’m Gavin. And this has been another episode of Ashton cast. Thank you for listening. On the next episode of the Ashton cast digital marketing maturity series. We’ll be playing the full interview with Barney Pierce, Director, Google Marketing Technology Platforms followed by Janet Ranola, koala.com. Michael Schniering of BCG and Des ODell at Resolution Media stay tuned.
The AshtonCast digital marketing maturity series was proudly brought to you by our friends at Google Marketing Platform. Please make sure to subscribe right. Comment and tell anyone that you know, that is interested in this industry about this podcast and your favorite episode. This series was produced by pod paste and Ashton Media here in Sydney, Australia, executive produced by Gavin Stewart and Kira Walter, supervising producer, Daren Lake audio production, sound, design and engineering by Ayman Connelly story, writing producer, Charles Montana and podcast management by Michelle Lee.
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