The New Digital Marketing Paradigm – Ignore It and Get Left Behind

Dave Atchison, CEO, Jove

Companies spend a lot of time fitting their brand messaging into all the various marketing mediums. A lot of time.

Consider the typical organization’s branding guide. Wordmarks. Lockups. Colors, sizes and spaces. Seasons. Refreshes. Etc.

All that’s well and good and important. But keep in mind that brand assets are designed for consumption in fancy presentations. They become an impediment when it comes to communicating your value proposition in 0.2 seconds.

Today, we are experiencing a new internet marketing paradigm. These days, you need to convey your brand not in the way you want, but in a way that your customer wants. When they want, where they want it, and on the device they happen to be using at the time.

In other words, the days of dictating your brand – and expecting people to come to you – are over. After all, what good is a brand with no customers?

Across the economy, leading companies are reaching this same conclusion. The best ones are embracing digital advertising, not fighting it. To get an idea of how it’s playing out, let’s take a look at three examples of this paradigm shift in digital marketing and how different companies approach it.

1. Gucci

All reports indicate Gucci is crushing it. Consider that for well over a century, fashion magazines held sway as the unofficial arbiters of style. Then blogs came along, followed by social media. Fissures began to appear in the fashion editor’s gatekeeper model as consumers eagerly took up the chance to become their own tastemakers.

Luxury brands have taken notice. Although comparatively late to the digital game, the industry is now shifting its focus to engage consumers directly.

In that spirit, three years ago Gucci set about revamping its digital marketing. The effort included a website redesign, a focus on more relevant and exclusive content, and a campaign to encourage artists to share their own interpretations of Gucci’s patterns.

By last summer, millennials accounted for 50% of the Italian fashion house’s sales. And during the first quarter of this year, Gucci saw its sales from ecommerce more than double, contributing to an overall 64% sales hike in North America alone.

2. Procter & Gamble

Just five years ago, e-commerce claimed no more than 3% of sales in consumer packaged goods. By the time CPG manufacturers and brands got serious about digital advertising, it faced a wider range of competitors – from Amazon to upstart delivery services and meal kit providers.

It was a late start. Between 2011 and 2016, large CPG companies lost more than $18 billion in sales to smaller players that were proactively reaching out to consumers.

Under the circumstances, some companies might ramp up their digital advertising spend. But lately, Procter & Gamble took a decidedly different route. Back in March, the CPG giant announced it was lopping $100 million off its digital ad budget for the second half of the year. This was after cutting $200 million in 2017.

Was it a pullback on digital? Not exactly. P&G aimed to hold tech firms’ feet to the fire on what it says is a lack of transparency and anti-fraud governance. This, according to the company, was creating friction between the company and its consumers.

Instead, P&G is putting its money into streaming media and ecommerce platforms. It’s also taking a more strategic approach to search, which is closer to where consumers make their buying decisions.

The result? P&G got rid of one-fifth of its ineffective marketing while adding 10% to its reach. Meanwhile, the company’s ecommerce sales topped $3 billion last year.

3. Netflix

Streaming services take pride in their commercial-free content. But they’re no strangers to using internet marketing and digital advertising to promote their own offerings. After all, people have only so much money for entertainment – and only so much time to devote to it.

That said, streaming content increasingly competes with major movie studios. So it probably surprised no one when the company disclosed plans to increase its marketing spend by 54% , to an amount dwarfing that of its nearest pure-play rival. Much of that spend is expected to be dedicated to digital advertising, especially programmatic.

Netflix foreshadowed this last year when it told shareholders of its plans to carry out individualized marketing at scale, delivering “the right ad to the right person at the right time." This included using data to apply user behavior toward a better, more personal experience. It also included pairing apps with featured shows, like the one echoing the famous Season 3 opener of Black Mirror.

Where will all this take the company? Recent history offers a hint. The number of TV households with a Netflix subscription increased 92% between 2011 and 2017. And in April, Netflix reported a 43% hike in streaming revenue, along with the biggest profit in its 20-year history.

Different as these examples are, they point to the new paradigms in marketing – that it has stopped being a top-down exercise. You don’t get to tell consumers what to think about you. Not anymore.

These days, you have to gravitate toward the consumer.

Moving quickly, testing constantly, finding answers through creative destruction and iteration – that’s what the three companies profiled here are doing. Rather than take a monolithic approach, they’re shape-shifting as the situation demands.

Old or new, sector by sector, companies that believe in this are doing well. These three companies are showing us how. It’s time to take their lessons to heart.