Mark Duffy, National Head of Digital & Solutions, Starcom
As a digital advocate, I’ve probably written ambitions headlines to clients over the years, going into the New Year full of optimism with annual year ahead predictions and big bets. But this time feels different. There is a very real sense of urgency to accelerate our digital marketing maturity now more than ever. Unfortunately however, many brands are still playing catch up to the latest consumer trends, digital media consumption, privacy legislation and grappling with the future of identity.
Over the past five years, Australia’s progress in digital maturity has felt more like a cautious game of chess. Which piece shall I move first? Shall I dip my toe in the water by moving a few pawns and test some use cases? Or should I go all out and move the queen by investing in an enterprise marketing technology platform? Or maybe move the knight and invest in a first-party data acquisition and consumer value exchange?
These are all very good moves, but the truth is there is no silver bullet, and caution will need to be overcome because the game has dramatically changed.
In Boston Consulting Group’s ‘The Fast Track to Digital Marketing Maturity’ report released in September, it found that brands already advanced in their digital maturity in 2019 have continued to reap the rewards in 2021. These brands are experiencing an average sales increase of 18 percentage points more than their less mature peers. They are seeing cost savings boosted by an average of 29 percentage points. And they are two times more likely to increase market share over low-maturity brands.
The research identifies four accelerators that are moving mature brands up the curve – the use of strategic data such as first-party data; end-to-end cross channel measurement using predictive models; access to skills and resources; and agile performance loops based on test and learn.
The bad news is not enough brands are moving up the maturity curve. In a 2019 BCG study, only 2% of brands were found to be at the advanced maturity stage, and in 2021 it still only sits at 9%. The majority (84%) of brands remain in the middle two phases which are referred to as “A Muddled Maturity Curve”.
So why the urgency to build digital maturity within organisations in 2022? The reasons are many. The last two years of the pandemic has sped up consumer behaviour by five years, with ecommerce now contributing $41bn in revenue in Australia. We are also at the tip of the data privacy iceberg, as we gear up for the third-party cookie deprecation. This is all happening as the Australian government undertakes a major review of privacy laws that will see tighter regulations around data protection and privacy in line with Europe’s GDPR laws and CCPA in California.
And all while brands contend with the fact that consumers are increasingly looking for more personalised communications, and yet are increasingly hesitant to share their data.
Of course, this is also happening within the context of an ever-converging media landscape, as traditional media channels continue to converge into digital formats traded in performance marketing platforms. According to PwC, this will only continue with digital spend forecasted to reach 65% by 2025.
In summary, this is what the urgency equation looks like:
(Consumer personalisation) + (media continues to digitally converge) + (privacy legislation) + (post-pandemic media landscape) + (third-party cookie deprecation and new identifiers) + (business growth and performance) = the need for digital marketing maturity.
What do marketers need to do?
You need to continue getting sponsorship and buy in from C-suite leadership within your business. Keep cross-department collaboration rituals in place, for example having the data and technology team collaborating with marketing teams, or your direct and paid media teams looking at the full consumer journey. Assess your first-party data readiness, reliance on third-party and second-party data, test new targeting options, evolve marketing technology, get on the front foot with cross-functional privacy teams.
Get started and engage with your agency and technology partners to guide you along the way. Most should have the ability to conduct digital maturity audits to establish your current maturity score identifying areas of strength and opportunity across organisational structure, data and technology, and onsite experience and analytics. From there, build out the roadmap to acceleration and begin the journey.
We are reaching a critical point in our timeline. The research shows brands which have been advancing their digital maturity efforts since 2019 are already reaping the business results – in a big way. If this isn’t you, then it’s time to hit the digital maturity accelerator. Before it’s too late.