Singapore firms have only a narrow window of opportunity to ramp up their digital transformation efforts and raise productivity over the next few years, said Heng Swee Keat, the city state’s finance minister, at a post-Budget forum in March.
He repeated calls for firms and individuals to acquire deep capabilities “to internationalize, digitalize and be more productive” to drive Singapore’s transformation as a digital economy.
Experts say firms that embrace these digital capabilities – from AI to analytics – will see efficiency gains translate into solid growth rates. A recent study conducted by market research group IDC predicts that approximately 60% of the Asia-Pacific GDP will be derived from digital products or services by 2021.
Management consultancy McKinsey echoed these findings, reporting that businesses enjoyed 5-6% more in returns on investment in profitability and productivity by harnessing analytics.
Another research firm, NewVantage, found that 73% of their respondents received measurable value from harnessing data – which was 50% higher than last year. This suggests that more value is being achieved as companies grow familiar with harnessing these data-analytics platforms.
Lenovo, a global technology company with over 55,000 employees worldwide and customers in more than 160 countries, created flexible dashboards that departments could adapt for quick analyses, leading to a 95% improvement in efficiency across 28 countries.
Lenovo, a global technology company with over 55,000 employees worldwide and customers in more than 160 countries, created flexible dashboards that departments could adapt for quick analyses, leading to a 95% improvement in efficiency across 28 countries
While some companies have embraced these capabilities for the benefit of their businesses, others, including marketers and their agencies, haven’t fared as well in harnessing disruptions arising from today’s digital economy.
Marketing behemoths defeated in the digital economy
In spite of exhortations from marketing industry leaders like Sir Martin Sorrell, to turn his group of “mad men” into “math men,” many agencies belonging to the world’s largest holding companies have become victims of natural attrition. Shares in WPP, Publicis, Omnicom and Interpublic Group were down sharply over the past 12 months.
Agency clients like consumer goods groups are rethinking their marketing spending. For example, in the past three years, Procter & Gamble (P&G), the world’s biggest advertiser in that category, has cut agency and commercial production spending by $750 million. It forecasts almost doubling that sum in the next three years.
While marketing holding companies struggle, digital behemoths Facebook and Google have virtually become a digital duopoly. Today, they represent about 60% of a growing global digital advertising market, effectively disintermediating these holding companies both from their clients and the audience they try to reach.
In its bid for greater efficiency, P&G marketing chief Marc Pritchard has reportedly said that his company would “take back control” of its marketing and move more of it in-house, saving over $2 billion.
Acknowledging Pritchard’s sentiment, WPP chief Sir Martin Sorrell said: “We had too many people between us and the consumer,” adding that it was “taking too long to get things done. We have to move a lot faster.”
In the same vein, the modern-day marketer will need to march to the beat of disintermediation and the ability to keep up will depend on one’s personal mastery of digital capabilities. This begs the question: “What core digital capabilities should marketers s acquire?”
Rise of the analyst-marketer in the digital economy
A recent Adobe and Econsultancy global survey of 12,795 marketing professionals across Europe, the Middle East, Africa, North America and the Asia Pacific revealed that the top three priorities for marketers in 2018 were “Content and customer experience” followed by “Analytics” and “Audience and data management.”
While there is much focus being placed on how “content marketing’s increasingly strategic nature means that more organisations are seeing the function as a crucial in-house competency,” a sticking point from the study is the significant 13% gap between the first and second priorities – in other words, “Content” and “Analytics.”
This gap indicates that while many marketers seem to recognize that compelling content breathes life into modern marketing, the imperative of acquiring deeper capabilities and mastery in analytics – the sine qua non of content – is still lagging relatively severely.
This is worrying because it evokes what management guru Peter Drucker said: “you can’t manage what you can’t measure.”
On the other hand, imagine the potential efficiency gains that can be realized by marketers if they were empowered as a function to become skilled at making productive decisions by seeing and understanding all these data for themselves, instead of having to rely on the IT folks?
By not mastering analytics, Singapore’s marketers could face three impediments to pacing with transformations in the digital economy.
Three challenges of not being analytical
Firstly, this failure to appreciate analytics shows that many marketers don’t fully understand the necessity of being symmetrical in managing communication with the audiences that matter.
Compelling content, after all, should be designed in the context of larger narratives. For that matter, context is always subjected to prevailing narratives. And a marketer who listens less than he speaks – or worse, ignores research – would be hard-pressed to fully appreciate these narratives.
Secondly, analytics offers accountability to one’s marketing investments. It is one of the most effective ways I know that a marketing chief can communicate the business impact of his function to his colleagues in senior management.
Harnessing analytics, one can very quickly separate vanity metrics from meaningful data that has an impact on business performance indicators like revenue, EBITA (earnings before interest, taxes and amortization) or growth. By speaking the language of business and by establishing him/herself as the go-to-driver of these indicators, the marketer gains credibility and earns a permanent seat at the strategy table.
On the other hand, by abdicating one’s mastery of analytics, the marketer has essentially given up on that opportunity and worse, reinforces the negative impression that marketers cannot demonstrate accountability to business performance.
Finally, by not appreciating – much less harness – data analytics, marketers are shirking one of the most important roles that they should be playing for an organization, which is to be connected with the eyes, ears and heart of the customer.
In today’s digital-first world, we’re experiencing a data explosion – we’re producing more data in these few years than was generated in the last 5,000 years of human development.
Yet only 0.5% of this data is used by organizations meaningfully. This explosion of data is not lost on in the marketing function. And for that matter, because we generate so much content, on a much wider plethora of marketing channels, marketing must be a key contributor to that explosion of data.
And that means that without analytics, marketers are not only producers of useless data, we are also proponents of wasting this valuable resource.