Digital marketing operations are characterized by complex, sprawling systems - comprised of websites, advertising assets, content, video and all kind of applications unique to a corporation's particular needs and way of doing business. No two are alike. Due to their rapid, Frankenstein-like growth in recent years, examples of highly optimized operations are few-and-far between.
This should come as no surprise. In practical terms, digital marketing is a discipline that's less than ten years old. This means best practices and reliable benchmarks are elusive. For all the appeal of online marketing's track-ability, offline tactics that have been around for decades - think TV, radio, print, direct mail - are far more predictable.
Conversely, everyone in digital marketing is learning-by-doing, and the very best practitioners implore "Test-Measure-Repeat" mantras. There's no tried-and-true formula for managing digital operations in the aggregate, no silver bullets. In such a chaotic environment, waste and leakage are a cost of doing business. We employ terms like "test" as euphemisms to describe efforts that didn't work - or, more accurately, failed. The only alternative to this "fail fast" approach is to on the sidelines and wait for the marketplace to shake itself out, and that's not really an option at all.
At East Coast Catalyst, we've been analyzing and auditing corporate digital operations for years, and have found cost-savings and growth opportunities in both the most obvious and unexpected places: under-performing campaigns, forgotten programs, overlooked opportunities, mismatched vendor relationships, and obsolete techniques being employed far beyond their expiration date. You name it, we've probably seen it. In one instance, we found a $500,000 program that was being reported incorrectly, and performing abysmally. Cost of doing digital business.
As with every other department head, marketing executives are under constant pressure these days from their CEOs and CFOs to "do more with less". However, every other department head isn't asking for a 10%-50% budget increase every year. And that puts marketing executives under a microscope, in a permanent hot seat.
Industry benchmarks tell us that the typical $100 million B2B company or business unit will spend in excess of $1 million on digital marketing this year, and its B2C counterpart at least double that. So squeezing another 10%-30%, or $100,000-$300,000, out of an existing operation can free up big dollars to be deployed elsewhere.
That's why regularly examining a digital marketing operation using a structured auditing approach can be a productive exercise. Our assessment methodology relies on a 30-point checklist (see chart below) to guide the process, but the best place to start an examination of digital operations is often at the infrastructure and application level. This can usually be done without involving other groups (i.e., IT), and provide a baseline understanding of the operation's pillars.
In this article, we address four segments attached to infrastructure and applications: hosting, speed, marketing technology, and mobile. These are core to most digital marketing operations, and can be major obstacles to success if not managed well. In future articles, we'll be covering strategy, creative and promotion, and vendor assessments.
Background: Hosting is literally the foundation of any digital marketing operation, but often doesn’t get the attention or priority it deserves.
Hosting is the last place you want to cut corners. This sector of the digital landscape is the most mature, and offers cost-effective and reliable solutions for every type of situation.
We recommend going with a reputable, external vendor that has 24/7 phone support and allows for easy scalability, and to go with a dedicated server. That way, if persistent problems arise, the vendor can just move you to a new server. More importantly, you don’t have to worry about the other – possibly rogue – sites that live alongside yours on shared server package. Higher-end hosting solutions guarantee uptime, security, and support levels.
The more you spend on your digital marketing operation, and the more traffic you get, the more hosting should cost. A rule of thumb is that it should total about .5% of the operating budget. So if you’re spending $5 million annually on digital marketing and related activities (such as an offline event that drives traffic to the site), hosting should be $2,500 per month or $30,000 annually. Complex operations with custom applications and heavy usage will require about 1% of budget, while rudimentary ones will require about .25% (up to $25 million budgets).
Takeaway: If you spend more than $1,000,000 a year on digital marketing ops – including staff, media, technology, and vendors – your hosting package should be with an external provider and costs should total about .5% of the budget. Losing digital ground because of troublesome or sub-par hosting is inexcusable.
Key Challenges to Consider: Many large companies still require marketing operations or business units to rely on internal IT groups for web hosting support, and this reality can be difficult to navigate. Even at smaller companies, IT might have a big role in hosting - find a way to own it.
Background: Most experts agree that sites should download in under five seconds. More recently, studies have shown that users abandon sites in great numbers after two seconds.
Sites need to be fast. Numerous studies have proven the relationship between site speed and conversions, and this can affect a digital operation’s performance and ROI in a big way.
Since poor download speed is usually the result of an inferior technology foundation (see “hosting” above) or ineffective site design and configuration, that makes the issue easily addressable.
Give your site a test run on one of several site speed tools available and find out how it performs. If the highly trafficked areas of the site download in less than four seconds, it’s a non-issue (though faster is always better). Otherwise, this metric will require attention.
Takeaway: Your website needs to download in under five seconds, and preferably three.
Key Challenges: Any website or online application that’s more than two years old has probably been worked on by a dozen or more designers, developers, and vendors, resulting in a patchwork composition that often under-performs. A strong project manager who is empowered by an executive to make the necessary fixes will be able to address the problem.
Background: The marketing technology category has exploded in recent years, as illustrated in Scott Brinker's Marketing Technology Landscape Supergraphic. According to VentureBeat, the sector is growing at 50% annually. While top-of-mind with most marketing executives for several years, many non-marketing executives have awareness today due to aggressive promotions by companies like Adobe, Eloqua (Oracle), Pardot (Salesforce), and Marketo.
The basic allure of marketing technology is enormously appealing: automate previously labor-intensive tasks such as prospect behavior analysis, integrate with sales tools, and free marketing operations from the grip of IT. So appealing, in fact, that the category now has between 1,000 and 3,000 solutions in the marketplace, and will likely only expand further in coming years.
The challenge for marketing executives is figuring out which ones to use, and how to manage a marketing technology “portfolio”. This is a new area of responsibility that calls for skills not typically resident in marketing professionals. To wit: in a recent study by the CMO Council, more than half of 150 senior marketers surveyed said they weren’t sure if marketing tech investments were yielding tangible business value.
Takeaway: Senior marketing managers need to define a marketing technology strategy in order to both take advantage of the new tactics available in the marketplace, and also to communicate a plan up-and-across the organization to non-marketing executives.
Key Challenges: The abundance of choices and information overload from aggressive players in the sector with well-funded and sophisticated promotional machines creates a difficult scenario for even the most technology-savvy marketer.
RESPONSIVE DESIGN / MOBILE-FRIENDLY
Background: There’s no avoiding mobile. The statistics are overwhelming, in both B2C and B2B. And it’s more of an infrastructure (applications) problem than a design problem.
In February of this year, comScore reported that mobile usage overtook PC usage on the internet for the first time, and in June the IDG Global Mobile Survey found that mobile is preferred over the desktop for executives conducting research during and after office hours. Mobile is here to stay, will only grow in significance, and companies need to plan their digital marketing strategies with that reality in mind.
Takeaway: Digital marketing operations that do not support mobile usage will soon be at a significant competitive disadvantage, if they aren’t already. Implications vary among industry sectors and between B2C and B2B, but the mobile is beyond the tipping point.
Key Challenges: Retro-fitting existing digital platforms to be "responsive" is difficult – both in practical terms (i.e., it's usually costly) and by way of building a bullet-proof ROI case to support funding. But it needs to be tackled. Consider a rip-and-replace as a workaround, even if this means scrapping a recently developed digital property. Use an "opportunity cost"-based approach to creating the ROI justification.
Tim Bourgeois is a digital strategist and partner at East Coast Catalyst, a Boston-based consulting firm that help companies employ digital strategies for growth and competitive advantage. Contact him at tbourgeois(at)eastcoastcatalyst.com or 617-314-6400.