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Digital Strategy: Importance, Cross-Section and Beyond The Internet has metamorphosed the way we live, interact, socialize and market. The rise of next generation digital marketing has completely transformed traditional marketing strategies. Communication was primarily one-way during the era of print, radio and television, with marketers having the upper hand to communicate what they wanted the customers to see or hear. Now, it has become a twoway process, where the customer controls the steering wheel. This gives customers tremendous power to influence the way organizations communicate with them. At the same time, Internet marketing has provided an opportunity for the brands to forge relationships with the audience in a personalized fashion, and overwhelm them with rich experience. Brands utilize diverse channels like websites, mobiles, e-mails, tablets, kiosks, and call centers to engage, serve and impress their customers. The proliferation and success of social utilities like Facebook, Twitter, YouTube, blogs, online communities, and forums have added an interesting dimension to the entire communication landscape. In spite of the developments in the digital media space, brands have not been able to capitalize its benefits due to the absence of a clear roadmap to plan and execute marketing activities. This paper elaborates challenges faced by marketing enterprises and discusses the growing necessity of a Digital Marketing Strategy in an organization. In essence, it makes an attempt to answer the following basic questions:

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Why Digital Strategy?

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What is a Digital Strategy?

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How do we create one for our organization?

Answering these questions not only enlightens marketers, but also provides them with a roadmap to streamline and integrate their marketing initiatives, and align them with overall organizational objectives. In addition, acknowledgement of these questions can also act as a business case for Chief Marketing Officers (CMOs) to earmark appropriate budget on future marketing programs.

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About the Author Apoorv Johari Apoorv Johari is a consultant with the Connected Marketing Solutions group. In his current role he consults with customers and provides solutions in the area of Digital and Social Media Marketing. The core focus is to help brands better understand their consumers and online audiences for creating a long lasting and better brand consumer relationship.

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Table of Contents 1. Introduction

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2. Why Digital Strategy?

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3. What is a Digital Strategy?

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4. How Can We Create One for Our Organization?

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5. Conclusion

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Introduction When Tim Burners Lee invented the Internet, little would he have thought about the revolution the Web would bring to the world. Today, the Internet has permeated into every nook and corner of our lives and has comprehensively altered numerous ways – the way people do business, the way people communicate their thoughts, the way people socialize, the way people market, and so on. Focusing on marketing, the Web, indeed, has reshaped the marketing landscape. Traditionally, marketing used to be a marketer’s paradise - broadcast media like print, radio and television were employed to push their messages to the customers. Marketers were in control and they decided what the customers should see. But with the emergence of Web and social media, combined with the evolution of new age channels like mobile, tablet and kiosk, marketing is undergoing huge transformation. Consumer habits are also changing drastically, forcing the marketers to move from traditional marketing towards Internet or digital marketing. Digital Marketing may convey different meaning to different people, but this paper considers Digital Marketing as a domain that encompasses every marketing initiative on the Web. Also, wherever the term marketing is used in this paper, it means digital marketing. The Web estate where marketing is administered can be broadly grouped under three categories – owned media, bought media and earned media. Owned media includes brand websites, micro-sites, blogs and communities. Bought media includes buying space on third party websites, whereas earned media is the space on social networks. Marketing on these media can include publishing promotional offers, branding content, latest news, awareness content, or some downloads in the form of articles, white papers, widgets and gadgets. One of the best features of this mode of marketing is that marketers not only promote their brand, products or services, but also look forward to forging individual relationships with their target audience. Once a relationship is formed, it becomes convenient to engage, offer, serve, impress and overwhelm the customer with timely, relevant and consistent communication. The notion behind this logic is - the more you engage your target audience, the more you increase the chances of conversion. One very significant evolution that has fueled the growth of digital marketing is the emergence of social networks and the vast scope of availing these platforms for marketing purposes. Facebook has brought about a significant magnitude shift to social networking and marketers are keen to cash on this wave. Like & Share are shaping the customer engagement story. Organizations are using Facebook in plentiful ways to acquire, engage and serve customers. A new term f-commerce (ecommerce through Facebook) has come into existence, where brands setup their catalogue on Facebook and encourage customers to purchase their products from social networking sites. Facebook is just an example; other social networks like Twitter, Groupon, MySpace, YouTube, Second Life and others have revolutionized the way branding and communication was handled traditionally. At the same time, success of platforms like Foursquare and Gowalla has added an interesting proportion to marketing by incorporating the concepts of social-location-mobile (So-Lo-Mo). Another very recent

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development that has grabbed front page headlines is the launch of a social network from Google Google+. However, it remains to be seen how this platform rolls out and the scope it provides to marketers. Certainly, the Google factor and its flagship initiatives like AdSense, Adwords and Banners ads are enough to excite the marketers to experiment with this platform. Apart from social networks, maturity of blogs and communities has also contributed to the rise of digital marketing. Organizations are making use of popular blogs and communities to transmit their promotional and intellectual substance to the target audience. Few prominent benefits of digital marketing - it proves to be more target-oriented and cost-effective, has higher relevant reach, and it is easy to track the returns. Another important advantage is the less turnaround factor – it requires comparatively less time to plan and execute campaigns on the Web. Moving forward, a quick look at some of the recent trends suggests that digital marketing is only going to rise and mature with time [1][2][3][4][5][6]. Marketers will increasingly invest in this mode of marketing to achieve results. New Age Digital Trends n n n

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Spending on interactive marketing is on the rise with an expected CAGR of 17% over the next 5 years Customer acquisition cost through online media is 2.2 times less than that of the offline cost Combining online & mobile increases reach by 13%, enhances brand recall and increases purchase intent and positivity towards the specific brand 1 Facebook fan brings 20 additional visits to your website Mobile commerce has doubled in size since 2009 alone and is expected to be worth $31 bn by 2021 Viewing of online video has increased by more than 45% PayPal predicts the end of physical wallet by 2015

Figure 1: Latest trends in digital marketing *CAGR – Compound Annual Growth Rate

Why Digital Strategy? Marketers have not been able to optimally harness the power of the Internet in spite of the rising clout and maturity of digital media. The adoption of digital channels such as websites, e-commerce sites, mobile apps, and social media by marketers is not done in a holistic way, resulting in inconsistent brand messaging across channels and lost opportunities without harnessing impending impact of digital channels on the overall business. Further, digital marketing mostly works as silos in the organization, and struggles at every stage – from planning to execution and finally to measurement. There is no clear cut roadmap on how to select from and use available channels; leave aside the strategy associated with each one of the chosen lot. Further, marketing activities lack integration across channels and lead to incongruous and frustrating experiences.

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The emergence of social media marketing has given birth to Social Confusion, which means how to understand and interpret social interactions and its impact, and react to it. No strategy is employed to handle social media and this has lead many organizations to blunder. Absence of an effective marketing organization structure and an efficient governance framework are other areas that get defined under the guidance of a digital strategy. In a nutshell, marketing initiatives are planned, executed and measured in a haphazard manner. It reflects an impression where all marketing efforts and goals of various channels are progressing in different directions, and are loosely aligned with organizational goals. We at TCS, define this phenomenon as Brownian Movement of Marketing (BMM). Brownian movement (named after the botanist Robert Brown) is a concept in science that highlights random drifting of particles suspended in a fluid (a liquid or a gas).[10] The occurrence of BMM divulges a very important point, which is, marketing tends to be directionless. Figure 2 depicts the phenomenon of BMM, where the objectives of marketing on individual channels do not align with that of organizational objectives.

Figure 2 : BMM phenomenon in marketing enterprise

BMM @ Marketing planning – At the planning stage, marketing is accomplished with a quick and dirty approach with most interactions happening manually. Planning best practices and past plans are either not available or are not taken into consideration, while planning for future marketing initiatives. Budgeting and other financial activities are scattered, unorganized and, at times, practiced manually. Marketing assets experience the same story, with multiple versions of the same asset floating within the organization, thereby aggravating commotion. Resource allocation management is mostly a human activity and collaboration among marketing team members is often carried out through emails and phone calls. It is worse that there is no strategy involved in choosing a particular channel to launch promotional or awareness campaigns. Marketers tend to choose channels based on their interest levels or on the channel’s popularity levels, and finalize them to execute marketing activities.

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BMM @ Marketing Execution – At an execution stage, BMM operates very efficiently. Before running campaigns, marketers seldom make use of predictive models to increase campaign efficiency. In spite of the absence of such models, raw segmentation techniques are used to target prospects and customers. Mostly, BMM creates a scenario where a prospect receives conflicting messages from the organization, leading to loss of faith and bad reputation for the organization. Since social media is the latest marketing platform, marketers flock to various social networks without a strong strategy and put the organizational esteem at risk. At the same time, there is little awareness regarding using different social networks for different purposes. Marketers seldom have concrete answers to decide among various social networks (say, between Facebook and Twitter) for running different variety of campaigns. User experience is another important focus area that suffers malnutrition. Customer touch points lack richness and are, mostly, inconsistent across channels. This frustrates the user and drives them away from the touch point. Integration among various channels is loosely coupled, or is non-existent. Prospects and customers are forced to initiate a new conversation every time they switch a channel, leading to frustration and abandonment. BMM @ Marketing Measurement – BMM works at its best during this stage. Marketers execute campaigns and then adopt an ad hoc approach to measure the performance and returns generated by those campaigns. No comprehensive dashboards are utilized to measure the performance of various campaigns across channels. On the other hand, leads generated by the campaigns are handled carelessly. There is no clear mechanism to capture, assign, track and nurture leads. Further, since little coordination exists between the Marketing and Sales teams, the transferring and closing of leads also goes untracked. These situations create bottlenecks in calculating the actual return on marketing investments (ROMI) from respective campaigns. In short, the BMM phenomenon raises multiple hurdles across all marketing functions and is one of the primary reasons behind reducing the efficiency of the marketing enterprise.

What is a Digital Strategy? In order to minimize the BMM phenomenon and improve digital marketing productivity, the most important prerequisite is to construct a strong Digital Marketing Strategy, or simply a digital strategy. A digital strategy can be defined in multiple ways; one such version says that a well thought out digital strategy, which is aligned with overall business objectives, would deliver greater results for less or same efforts in areas starting from marketing planning to implementation and finally to measurement - it is like progressing the digital DNA to succeed on the Internet. It equips a marketer with a vision, roadmap and an approach to plan, execute and measure the marketing enterprise in an integrated manner across channels.[11]

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The prime objective behind implementing a digital strategy is to provide a direction to marketing enterprises and eliminate the BMM phenomenon and align marketing objectives with those of the organization. It not only enhances the output of the marketing division, but also sets the stage to bring a positive transformation in the productivity of every customer-facing department – be it Sales, Service, or Public Relations. Figure 3 represents how marketing objectives are aligned to the organizational objectives after implementing the recommendations of a digital strategy.

Figure 3: Digital strategy aligns marketing goals with organization goals

Reducing BMM phenomenon also encompasses defining a suitable organization structure and setting up of an effective governance framework to boost marketing productivity. A digital strategy can bring immense benefits to an enterprise, some of which are: a)assessing the maturity of the marketing organization by identifying key performance indicators (KPIs) and establishing benchmarks b)developing a roadmap for the organization to execute marketing initiatives c)enhancing customer experience and customer satisfaction d)prioritizing, streamlining and integrating all marketing programs across channels e)providing an analytical view of all marketing programs Although a digital strategy can have many objectives, the paper focuses on the following highly-used themes:

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1.Enhancing User Experience 2.Integrating and improving Marketing, Sales and Service 3.Increasing ROMI 1. Enhancing User Experience User Experience (UX) depicts the quality and ease of interaction between a user and touch-point of the brand. These touch-points include Web sites, mobile sites, calling centers, emails, SMSes, kiosks, and so on. UX plays a dominant role in determining the stickiness associated with the touch-point. The richer the UX, the more are chances of increased user engagement, participation and eventually, conversion. Digital strategy puts a huge impetus on uplifting the UX across all touch-points. It illustrates a plan that makes use of concepts of Personalization, Usability, and Information Architecture, and of Rich Media, Intelligent Search and Aesthetics. It also emphasizes the relevance and currentness of the content, which in turn, plays an important role in driving in or away the traffic. Digital strategy builds a roadmap to implement the above UX concepts, and ensures continuous improvement and optimization on a regular basis thereby resulting in an outstanding brand value. In a nutshell, the ultimate aim of digital strategy is to ensure that whenever users interact with brands through any touch-point, they should appreciate the product of the brand. 2 .Integrating and Improving Marketing, Sales and Service Based on the ‘As-Is’ and ‘To-Be’ marketing maturity states of the brand, a digital strategy lays down a chart for coming up with new and improved tools and techniques to enhance marketing. The organization develops a robust framework to plan, execute and manage all marketing initiatives. Additionally, assessment of the various available channels is carried out and a decision is taken to embrace new channels, nurture the existing useful ones and discard the non-performing ones. A separate strategy is then framed to take on each channel on an individual basis. Since social media is gaining more and more ground in marketing surroundings, a digital strategy formulates a Social Media Marketing model to assist the brand in leveraging this neo power. This model helps brands to create a buzz regarding their products, services or promotions. Exploiting viral marketing for brand promotion is another component of this section. From the Sales point of view, a digital strategy looks to establish a synergy between the Marketing and Sales departments. A process is designed to generate, assign, nurture and finally, transfer leads from Marketing to Sales. A mechanism is also elaborated to provide visibility to the fate of all transferred leads – whether they got converted or not. Taking Service perspective into account, a digital strategy aims to provide intuitive and prompt service to customers across multiple channels. An interaction thread emanating from one channel should be seamlessly carried over to another channel to serve the customers in an overwhelming manner. There is no point in implementing a digital strategy, if it cannot improve the Marketing and Sales operations. 10

3. Increasing ROMI Measuring the ROMI spend is one of the biggest challenges that marketers face today. Digital strategy intends to introduce a framework that can be used to define relevant KPIs to measure the performance of all marketing initiatives. This helps to generate actionable insights for respective stakeholders. This framework creates a unified dashboard with an integrated view of analytics like customer analytics, behavioral analytics, conversion analytics, awareness analytics, web analytics and activity analytics. Additionally, a digital strategy favors the creation of a cross media performance dashboard, which evaluates various marketing programs across channels, and provides valuable intelligence regarding the effectiveness of specific channels. A digital strategy may also propose to set up a mechanism that facilitates the generation of insights by collecting and analyzing social data. This analysis can be used to find out the sentiment associated with the products and services of a brand. These insights can also be integrated with transactional data from the Customer Relationship Management (CRM) to implement and leverage the concepts of Social CRM. Too much data can easily overwhelm Marketers, while too little can be misleading. A digital strategy ensures the appointment of right techniques that not only makes sufficient data available, but also derives actionable insights from the data to support decision making.

How Can We Create One for Our Organization? To assist customers in the domain of Digital Marketing, TCS Connected Marketing Solutions has developed marketing maturity models that describe the state of marketing enterprise starting from an ad hoc state to an optimized state.

Figure 4: Marketing Maturity Model

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Each of the maturity levels mentioned depicts the sophistication of marketing enterprises based on several parameters like the kind of process and technology used to execute marketing operations, the governance model and the organization hierarchy defined. These models are utilized to assess the existing capabilities of the marketing department and then measures are suggested to move up the maturity chain. To ascertain the maturity of an organization and to assist them in constructing a digital strategy, TCS has crafted a consulting methodology called the BARTER methodology. It takes into consideration the organizational, business and IT aspects, and lays stress on three main components – People, Process and Technology - thereby creating a viable roadmap for the organization to embrace and utilize digital media.

Methodology Phase Breakup

Activities Preview n

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Baseline the scope

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Assess the “As-Is” state n

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Represent the “To-Be” state

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Tailor appropriate strategy n

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Identify stakeholders Prepare consulting plan with timelines Finalize deliverables Kick-off meetings Interview stakeholders and relevant decision makers to understand the marketing processes and procedures Utilize various marketing models to ascertain the maturity of the marketing organization Use marketing maturity models to depict the relative maturity of the organization against complete maturity Prepare the assessment report Interview stakeholders and relevant decision makers to understand expected state Apply TCS marketing models to ascertain the perfect “ToBe” state, depending on the maturity of the “As-Is” state Utilize these results to describe the closest “To-Be” state Prepare a gap analysis report Chart a suitable digital strategy that elaborates on few or all of the following strategies, as per the scope: n Marketing planning strategy n Channel strategy n Channel integration strategy n Social media marketing strategy n Marketing measurement strategy n User experience strategy Spell out appropriate structure for marketing organization Illustrate appropriate governance models

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Methodology Phase Breakup

Activities Preview n

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Evaluate and suggest control measures

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Recommend solutions

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Detail a marketing maturity evaluation process Specify a time interval within which the evaluation needs to be conducted at least once Implement a mechanism to embrace and adopt best practices on a regular basis Recommend technology solutions Recommend products and services Recommend solution architecture Recommend relevant systems integration

Table 1: TCS BARTER methodology

BARTER methodology encapsulates activities in the entire marketing enterprise - starting from marketing planning to execution and to measurement, and puts the spotlight on User Experience, Cross-channel Integration and Productivity Improvement. This methodology has been created by specialized Domain and Industry experts, and has helped multiple customers achieve their aspirations through the Web.

Conclusion Digital strategy is always driven by vision and goals, with an ultimate aim to help the organization achieve its business objectives in an efficient manner. Instead of running the show on an ad hoc basis, marketers must formulate and leverage a digital strategy to ensure that they are in control of their marketing initiatives. On an average, investing in a digital strategy can lead to an improvement of at least 20 to 80% in marketing productivity, 20 to 40% reduction in campaign and marketing cost, 20 to 75% reduction in customer acquisition costs, and 10 to 50% increase in response rate.

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References [1] Article: Carrie Johnson (2011). Trends 2011: Cost of ebusiness operations and customer acquisition, Research Report, Forrester April 2011 [2] URL: Panel Discussion: The Future of Online Retailing | Nielsen Wire http://blog.nielsen.com/nielsenwire/consumer/panel-discussion-the-future-of-online-retailing/ [3] URL: IABUK : Take Five http://www.iabuk.net/en/1/takefive010611.mxs [4] URL: Experian Hitwise - 1 Facebook fan = 20 additional visits to your website http://weblogs.hitwise.com/robingoad/2011/06/1_facebook_fan_20_additional_v.html?utm_source=feedburner&utm_medium=feed&utm _campaign=Feed%3A+hitwise%2Fuk+%28Hitwise+Intelligence+-+UK%29 [5] URL : IABUK : Mcommerce to be worth £19bn by 2021 http://www.iabuk.net/en/1/mcommercetobeworth19bn010611.mxs [6] URL: January 2011: Online Video Usage Up 45% | Nielsen Wire http://blog.nielsen.com/nielsenwire/online_mobile/january-2011-online-video-usage-up-45/ [7] URL: PayPal Predicts The End of the Wallet By 2015 http://mashable.com/2011/06/29/paypal-100-million/ [8] Article: Shar VanBoskirk, Christine Spivey Overby and Sarah Takvorian (2011). US Interactive Marketing Forecast, 2011 To 2016, Research Report, Forrester August 2011 [9] Article: Sean Corcoran and Christine Spivey Overby (2011). Accelerating Your Social Maturity, Forrester June, 2011 [10] URL: Brownian motion - Wikipedia, the free encyclopedia http://en.wikipedia.org/wiki/Brownian_motion [11] URL: The Value of Digital Strategy and Online Video | LEAHDEMILIO.COM http://leahdemilio.com/2011/02/25/the-value-of-digital-strategy-and-online-video/ 14

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