Making the business case for Digital Marketing

How does one ‘sell’ digital internally?

Those of us who would describe ourselves as ‘digital specialists’ have a vested interest in evangelizing digital; we love it, we believe in it and we want to do more. However: working in real-world organisations, we need to make the business case to convince those who control the budgets which we require to implement our digital plans.  Otherwise nothing will change and the effectiveness of our marketing activity is likely to decline as consumers/ business customers switch to new platforms; as brand owners we risk ‘missing the boat’.

Let’s be clear: the reality is that ‘the internet revolution’ has not resulted in whole new marketing budgets being created (e.g. no-one is saying: “Offline is working fine. But now we have social media and mobile too so we’ll just double the marketing budget.”).  No: in tough economic times, budgets are if anything lower than in previous years. So we are, in reality, talking about substitution/ reallocation. We are proposing to shift money out of press advertising and direct mail (say) into PPC and Social Media (say).  We need to propose and then someone needs to say ‘Yes OK’ to this shift. But why should they?

There are really only 2 reasons for organisations to spend money on digital marketing: a) it delivers immediate ROI (or at least within a measurable time frame) or b) it’s becoming increasingly important, so it will in time deliver that ROI, which means that brand owners need to get involved now and ‘learn how to do it’ or they’ll be left behind when it really takes off.  Perhaps SEO/PPC/email would fit in the former category whereas Social Media is more likely to fall into the latter. Several major FMCG companies I have worked with explain that they are ‘testing the water’ in social media and mobile and gaining valuable experience although they freely admit they are currently unable to prove effectiveness of much of this activity. This requires vision and to an extent a leap of faith which may depend on company culture and attitude to marketing investment of this type.

Senior Finance people are, in the main, only interested in ROI; they play no favourites, and neither should we in making recommendations to them.  As Commercial Accountants, they have the avoidance of waste ‘hard-coded’ into their DNA. They won’t want to do something just because it’s the latest craze or looks ‘really cool’. Quite the opposite in fact: the newest, most fashionable platforms will need to work extra hard and make an even BETTER case to convince them!

So we need to speak the language of ROI, of investment linked to return, in order to sell our digital plans in. Perhaps the best analogy is that of ‘paid advocates’ ie. We must adopt the role of a lawyer ‘making the case’ for digital. And of course, if the balance of evidence is not in digital’s favour, the case will be lost and the budget will be locked away i.e. not released.

So let’s start with

a) Convincing the Finance Guys

OK: you’re the Marketing Director/ CMO/ Head Of Marketing and you want to convince the ‘Bean-Counters’ to invest in Digital Marketing. The challenge here is as much a matter of understanding their mind-set as much as knowing Digital and the role it can play.

Let’s take a deep breath: at the risk of going back to Lesson 1 of an Elementary Business Studies course: The Finance Director (CFO) and his/her colleagues have a crucially important role in the Organisation. They are not marketing specialists, or sales specialists or even production specialists: they are MONEY specialists. They are vital because most organisations are ultimately concerned with making money. It is their responsibility to guide/ manage the company in its overall corporate purpose of delivering maximum value to shareholders (i.e. the owners of the company).  If you are in a not-for-profit or governmental organisation, the terminology will be different but the underlying principle still applies: The (senior) finance guys are responsible for increasing the net income (= sales less costs). Thus they need to focus the attention of everyone in the organisation on 2 things: maximizing revenue and minimizing costs. The CEO looks to the CFO to help and support him/ her in this vital activity. And it’s no coincidence that many CFOs  get promoted  to MD/ CEO and even Chairman.

Marketing, as a ‘spending’ department, will always be under scrutiny. Finance Directors have never been entirely comfortable with ‘expensive’ ad campaigns, on TV, Press, Outdoor, Direct Mail Etc. Part of the reason for this is the fact that they hate the rather mysteriously loose correlation between ad spend and resultant sales. As people with tidy, mathematical brains, they find it troubling that the CMO cannot promise, hand on heart, that “if we spend this, we will make that”.

At this point we feel compelled to quote the old chestnut:

“Half the money I spend on advertising is wasted. The trouble is, I don’t know which half.” (attributed either to Lord Leverhulme or John Wanamaker depending whether you’re a UK or US marketer! Whoever first said it, that was around 100 years ago). This saying is truer than ever in the internet age, when offline and online marketing communications often combine in unexpected and sometimes frankly mysterious ways; multi-channel attribution analysis is a current ‘hot-issue’. (Why did they buy? Almost certainly, not just because of that final Google search…). Of course consumers don’t care about online/offline/ mobile/tablet; it’s just them experiencing / interacting with a brand and they expect it to be consistent across all ‘touchpoints’.

Finance Directors in companies who spend on marketing will in general, be familiar with advertising in offline media and will, in most cases, have arrived at a kind of ‘grudging acceptance’ that it is a necessary evil (i.e. if you stop it your sales will go down), whilst still suspecting external agencies and other partners of secret mark-ups and rip-offs and often introducing procurement experts (internal or external) to audit these ‘suppliers’ and look for ‘value’ (aka cost savings). However ‘this new online stuff’ fills them with a whole new level of suspicion; especially Social Media Marketing which many regard as something akin to a dark art. By comparison, Email, Mobile and Search are easier to explain and in turn justify. In most cases, digital marketing is outside their ‘comfort zone’ and, worse, it’s changing so fast that it’s very tempting for many of them to try to ignore it altogether. This attitude needs to be challenged, in the best overall interests of the organisation (and absolutely not because digital is ‘cool’!).

The challenge is to convince the powers-that-be that this new activity will be well managed, tightly controlled (especially budget-wise) and ultimately that it will deliver BETTER ROI than other platforms/media. So no pressure…

With this in mind: beg, steal or borrow data, in order to assemble any ‘results’ you can: ideally from your own campaigns for your own organisation (recent is best). Failing this, results of digital campaigns from similar organisations to your own/ in your vertical sector will help. Lastly ANY results, however flaky (e.g. you might find marketing Effectiveness Awards entries and case studies quoted in the marketing press) are better than nothing. SO:

  • make your recommendations
  • explain how it works
  • back up with all the evidence you can muster

…and you’re on your way to a convincing case.

The above also applies if you’re in an SME reporting to a hands-on Founder/Owner. It’s their money so the only way to get funds released is to hold out the prospect of an attractive return; rest assured that they’ll be taking a close interest in your Analytics Reports!

OR maybe you’re not actually the CMO/ Head Of Marketing, so that a 2-stage process is required.

In this case, you need to start by:

b) Convincing the Marketing Director

OK so you’re not the CMO (yet). Perhaps you’re an up-and-coming digital specialist (and of course enthusiast) reporting to that person and you need to get the (current holder) of that job title on-board with your pitch for a budget to plan and implement a digital strategy.

Your approach will partly depend on the attitude of the CMO to Digital. Are they an experienced marketer with little or no exposure to Digital? Or someone who is on the whole a believer in digital with reasonable exposure to it (e.g. in their previous career) but who needs ammunition to sell digital internally? The former group is more of a challenge, but you can work with either.

Even today, there is still a group of senior marketers (often the MOST senior) who have largely managed to avoid digital for their entire long, successful careers. Their comfort zone is entirely offline: TV, Press, Outdoor, Collateral, Direct Mail, Exhibitions, PR, Design, you name it. Think back to 1990 (if you’re old enough!). These people were comfortable (and on top of their game) in those days; maybe they’re in denial about the changes since. It’s not that they’re hostile to Digital, more likely they’re a little scared of it. Sure their kids are on Facebook and they have a smartphone (in common with their senior colleagues) but they’re suspicious of those “Apps” they read about in the Marketing Press and which the Agency’s spiky-haired Head Of Digital (who looks about 16) keeps banging on about. Moreover they’re likely to be sensitive about revealing the depth of their ignorance about digital, especially in front of their junior (web-savvy) colleagues. They are, however, probably not stupid. They can be taught; and this is the key. With this group you need to reassure and (ever-so-subtly) educate them as to the benefits of digital as part of their marketing mix. Maybe organizing a program of in-company training for the non-digital specialists in the organisation might help? And ‘you-know-who’ could be invited to sit in? This is Stage 1; demystification and reassurance using plain-talking explanation.

After this, go to a) above.

However, if your CMO is already fairly digitally savvy and indeed digital-friendly, but just needs some hard-hitting ammo for the Board and the CFO, then your task is easier. You don’t need to preach “The Internet Revolution” playing dramatic videos about ‘The Connected Planet’ and proclaiming apocalyptically that ‘The World Is Changing’; rather you must simply supply some ROI projections that convince all parties. At this point, we can move seamlessly to the strategy outlined in a) above (convincing the Finance Guys). Just give this case to the CMO and wish him/ her every success in his/her meeting with the CFO!

Lastly you may need some external help. So you should either pay a consultant (who are often surprisingly persuasive in front of the Board even when merely delivering a script written by you) or tap into a reliable source of free assistance: in my experience, Digital agencies are always very keen to help clients free up budgets to spend on digital activity (Funny that!). If they have Account Planners with a business brain, as an increasing number do, they may be your best allies in putting a robust case together. Digital Media planners can also be very helpful in helping you build your case for similar reasons.

But:

What if it doesn’t work?

OMG. Despite all your heroic efforts to secure the budget and implement your bright, shiny, digital activity, the results don’t match your KPIs. Now what?

Well you certainly shouldn’t look for a tall building to jump off. It was always a TEST, right? Quite rightly, you defined your successful outcomes (SMART objectives) up-front, you set your KPIs and you’ve been measuring everything.  So get your analytics guy to scrutinize the results and try to establish the reasons it fell short. Maybe the platform you chose was too ‘bleeding edge’ i.e. the market wasn’t ready. OR maybe you fell down on implementation; eg the production or creative wasn’t quite good enough to get the necessary engagement. Sometimes the conclusion is simply: not for our audience/ brand at this time. No big deal; you didn’t ‘bet the farm’ (did you?). Maybe your audience just isn’t quite ready for a smartphone app or a Google+ campaign right now. My old school chemistry teacher used to say “All experiments work” i.e. you always learn something. Perhaps you need to stick to the tried and tested a while longer…

Of course in, say, 12 months’ time, the story may be different: after all, the trends are overwhelming: digital media are taking up an increasing share of people’s time and brands need to work out ways to be there, to join the conversation and drive awareness and revenue without turning people off by being too salesy. Digital marketing success is an iterative process which depends on testing and continuous improvement. And no-one said it would be easy (or even always work!)

Lastly, let’s remember: TV, Press and posters have had a pretty good run for the last 50 years without ever being as measurable as the Money Men (and Women) would like, so maybe they’ll cut Digital a little slack? Well, maybe…

 

<<This is an extract from the Ebook ‘Making the Business Case for Investment in Digital Marketing’ by Dr Dave Chaffey and Mike Berry, available to Expert Members of Smart Insights (http://www.smartinsights.com/guides/digital-marketing-strategy/making-the-business-case-for-investment-in-digital-marketing)>>

 

 

2012-06-18T11:22:40+00:00 June 17th, 2012|General, Integration|0 Comments

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