THE DIGITAL

TRANSFORMATION
OF MARKETING
TABLE OF CONTENTS

1. Introduction......................................................................3

2. Digital Transformation......................................................5

3. Customer Experience.......................................................9

4. Budgeting........................................................................11

5. Skills and Training............................................................13

6. Marketing Technology.....................................................15

7. Conclusion.......................................................................19

8. Acknowledgements.........................................................20
 1. INTRODUCTION

INTRODUCTION
“Have you ever clicked your mouse right here? … You will.”
And with those few words Wired and AT&T ushered in the world’s first display banner
advertisement on October 27, 1994.

In a little over two decades, not only has digital advertising emerged as the killer category for
marketing, but the very nature of what it means to market and be a marketer has undergone
a significant upheaval.

There is little to suggest that this change will do anything but continue, most likely at an
accelerated pace.

The contemporary CEO must navigate a complex ecosystem of demand side and supply side
advertising systems, invest in complex analytics, and develop skills in product development
and customer advocacy.

They must forge a path to the C-Suite and probably the board in order to ensure they can
drive through not only budget reallocations but also the wholesale cultural change needed to
re-orientate their organisations around the whims of the modern consumer.

There is a long way to go.

Recent research by ADMA and Oracle Marketing Cloud, published in our recent CMO of
Tomorrow Report, reveals that budget, management buy-in and a scarcity of understanding of
digital capabilities remain key impediments to further change.

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 1. INTRODUCTION

These and other issues were covered in detail during a series of roundtable (this is how ADMA
uses roundtable) and Think Tank discussions held with ADMA members during October.

This whitepaper explores several key digital themes investigated by the marketers who
participated in the sessions.

Among the themes explored;

• What does digital transformation mean

for marketers?

• How have marketers had to rethink

budgets?

• What does it mean to put customer

experience at the heart of the marketing
conversation?

• On the marketing technology front

what are the trends in attribution and
programmatic?

Despite the diversity in the group across industry, organisation size and even between B2B and
B2C, many of the issues and solutions were remarkably consistent.

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 2. DIGITAL TRANSFORMATION

DIGITAL TRANSFORMATION
Marketing was one of the last big organisational departments
to be reengineered using technology.

Previously the big reengineering projects tended to the inward facing and focused on efficiencies
(these are also easier to justify under traditional business model planning).

But the web allowed marketing to turn its focus outwards.

The earliest websites were simple content sites. As soon as digital advertising appeared – first
as display ads and later more successfully as search, marketing found the reason it needed to
jump on board.

As a result, during the first 20 years of the commercial internet marketing largely co-opted the
digital conversation inside many companies. Boards might be interested in cyber security risk
management, but other than that until very recently if they cared about digital and marketing
at all it was around the very narrow field of brand risk on social media.

It is no coincidence that in 2013, after Gartner came out with its infamous prediction that
marketers would spend more on tech than CIOs within a few years (it says this has now
happened), the push was on for the CMO to assume greater control of technology.

The more extreme versions of this argument saw a push in some quarters for the CIO to report
to the CMO. Luckily that idea, steeped in ignorance about the sheer scale and mechanics of
internal IT infrastructure, never took hold.

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 2. DIGITAL TRANSFORMATION

More commonly however marketing departments started building their own technical
expertise around cloud based software-as-service packages and other marketing technology
opportunities.

But genuine instances of marketers assuming the digital leadership position are rare. Instead
we saw either the emergence of chief digital officers, or the re-emergence of CIOs as digital
players.

In truth, the CEO became the real owner of digital. Management consultants like McKinsey &
Company, and Bain argued that the transformative necessity of digital required aggressive top
down leadership.

PRACTICALITIES

But moving the conversation from the abstract idea of ownership to the practicalities of
execution, the ADMA Think Tank participants identified the three Ps of digital marketing
transformation;

(1) Positioning – how do you sell in the change?

Marketers who have been through the exercise say the way you discuss the digital transformation
conversation internally is important. Many preferred to describe it as innovation rather than
transformation in some cases because this reflects the ongoing nature of the world.

Even in a digital environment there is a high

degree of uncertainty. Medium term plans
are necessary and need to be articulated, and There is a danger that people say:
these can provide confidence as employees “Oh we are transformed now”
move through the process.

It is also important however to recognise there are many moving parts. Those with experience
say it is important to focus on low hanging fruit. And, on a cautionary note one of the big
weaknesses identified by the Think Tank participants is that companies do not think enough
about the skills and capabilities required.

You don’t want to scare people but you do want them to be aware of the impact on everybody`s
jobs.

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 2. DIGITAL TRANSFORMATION

(2) Prioritising – Knowing where to start.

This is one of the biggest problems for many companies, especially large incumbents assailed
on all sides, and who often have dozens of legacy systems with which to contend. You can’t
afford to do everything you want to do with digital transformation so it is better instead to just
deal with those experiences that will actually make a difference.

“There needs to be a prioritisation in the process – so we have to choose

the priorities that make the difference”

The advice sounds like the kind of wisdom project managers have always been famous for;
start with small achievable goals and aggregate your successes.

Ask yourself – what is the simplest, easiest use-case to go after before you go down this giant
transformation journey?

(3) Politics - Getting buy-in.

Getting buy-in from fellow executives is crucial, but it is still an area where marketers struggle
according to the CMO of Tomorrow study. CEO engagement is the gold standard say marketers
who understand that top down support is crucial for success (and for knocking a few heads
together).

Of course the scale of the organisation also informs the challenge as these observations from
companies at very different ends of the spectrum attest;

“We have run workshops for the majority

of our partners and we will soon roll them
out for all of them. We need the partners
to be comfortable and to recognise that
we know what we are doing.”

- Global Consulting Partnership

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 2. DIGITAL TRANSFORMATION

“We are a small enough organisation

where it can just happen organically.
Rather than call it digital transformation
which nobody on the digital team wants
to do, we position it as just an innovation
program that the whole organisation is
going through. Due to our scale, we don’t
feel we need a change management
program. It just happened organically
once our CEO bought in to it.”

- eCommerce Company

The idea of digital transformation can confuse people and scare them. The reality however is
that a well run program is about employee empowerment.

This means having the confidence to push decision making to the boundary of the corporation
and equipping staff to become decision makers. And they need to be equipped both with
tools and with training.

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 3. CUSTOMER EXPERIENCE

CUSTOMER EXPERIENCE
Customers take their very best experience in any context
and apply it to every context.

That may seem to be a very unfair and unachievable benchmark but it is one that is very familiar
to marketers.

And there is a simple reason – the data clearly indicates that leaders in customer experience
deliver stronger financial results.

Research released earlier this year by Sitecore and Avanade found that for every dollar invested
in improving the customer experience, businesses generated three dollars in return. In addition,
they said, companies could expect to see an 11 percent increase in revenue in the next 12
months.

According to the authors of that study, “A full two-thirds of respondents said that competition
made their organisation realise the need to prioritise customer experience, while 52 percent
of global respondents and 60 percent of Australian respondents reported customer feedback
as the driver.”

Meanwhile a separate study, this time by the Australian Marketing Institute (AMI) and Vision
Critical revealed 89 percent of organisations intend to compete primarily on customer
experience in 2016.

It is little wonder then that transformation programs are often couched in the need to recalibrate
the organisation’s operations to put the customer experience at the heart of its behaviour.

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 3. CUSTOMER EXPERIENCE

Almost every organisation says it puts its

customers first and yet over time sometimes
the needs of the customer become lost as
executives grapple with day to day concerns.

KPIs become misaligned and the interests

of departments or even individual managers
can start to skew the agenda.

Programs like Design Lead Thinking which

seek to strip a product or service back to
basics and rebuild it from the ground up are
becoming increasingly popular.

Traditional management consulting

companies like McKinsey have become
acquirers of design specialists while some of
the top tier consulting companies are investing
heavily in capabilities by propagating the
approach across the organisation.

There is one big cautionary note however. Too often customer experience is considered only in
the context of digital channels. Marketers were adamant that genuine world class experiences
needed to incorporate all the touch points between the brand and the consumer.

Others faced the opposite problem;

“We have a lot of old school people who think that if they create the
perfect physical experience then digital doesn’t really matter.”

Marketers also warned there is a requirement to educate executives on the need for on-going
investments. Management often accepts the need to create great digital experiences but
struggles with the reality that you have to constantly evolve to stay ahead of the customer
expectation curve.

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 4. BUDGETING

BUDGETING
Access to budget is the single biggest impediment to accelerating the digital
transformation of marketing, according to many CMOs and digital marketers.

Partly it’s a matter of competing priorities but it’s also about the ability of the CMO to understand
and describe ROI.

However, the good news is that companies are starting to build innovative new approaches.
Thankfully the days of boiling the ocean for management on a 100-page business plan are
fast receding. The reality in the agile world of digital marketing is that such acceleration in
approvals is essential.

Take the example of the ANZ Bank. Outgoing COO, Alistair Currie, told Which-50.com earlier
this year that the bank is getting much better at breaking down larger projects into smaller
consumable chunks.

Just as importantly, the bank believes, it is getting better at picking winners and losers early.
There are still problems of course. Some marketers point to innovation fatigue among senior
managers.

“Budget approval remains a big issue. We got agreement for $3.3

million in funding and the bidding process was much lighter. It was
much easier and only needed sign off by the retail director.
Once you get sign-off, you can move forward.”

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 4. BUDGETING

ARE WE THERE YET?

There is an initial burst of excitement which locks in interest from the CEO and other executives
but that can fade over time.

It is not even about the amounts of money being spent, say CMOs.

A company might happily sign off on a million-dollar television advertising budget without
scrutiny but respond suspiciously to a request for a $100,000 dollars for a mobile app
development.

And marketers say, as they assume more control over customer experience, they need to start
making choices between investment in physical customer experiences such as buying new
carpet in a hotel lobby or a digital experience such as a website refresh.

Marketers are used to letting other people see their work in a very physical way through the
big advertising campaigns. When the money is spent on software in the cloud the results are
not as visible.

“Over the last three years we have moved from 90 percent traditional
to 75 percent digital - people say `where’s my advertisement?`
– It’s out there but they can’t see it.”

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 5. SKILLS AND TRAINING

SKILLS AND TRAINING

One area of investment that seems to be lagging based on the input from
Think Tank participants is in the area of skills and capabilities.

As marketing technology becomes more ubiquitous; advertising becomes more programmatic;

and analytics becomes more central to every decision, finding staff with the right skills becomes
critical. Marketers say a flexible approach to learning and development is critical.

But there are major concerns.

Universities are turning out students whose skills are better suited to an old way of marketing.
And tight labour markets make finding and keeping the best new talent problematic.

Marketers struggle with the problem of keeping everybody’s skills up to date and they argue
you will never be on top of it.

“We have invested in a marketing cloud but sometimes I feel like

there is a Ferrari sitting in the garage and I might go out there and
polish it once in a while but there is nobody to drive it.”

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 5. SKILLS AND TRAINING

Among the issues they identified;

• People need to re-skill much more quickly. “ We are going through a

big digital transformation
• Employees leave when they are not
internally which impacts the
challenged so you have to keep them
engaged. way we work with our IT
department and the internal
• Millennials change jobs so frequently that tools we use. There is a
skills often just walk out the door, which
huge education piece to go
makes the company skeptical about
training. with this and a relocation
into a new purpose built
• Often the best approach is to find the
environment. But we
best person for the role and then commit
to training them up.
need to get the level of
understanding and comfort
• New employees often come into an up about the issues.
organisation knowing more than the
It’s a huge shift.”
people in the department which is the
reverse of what happened it the past.

The bottom line, however, is despite frustration over churn and the concern of HR and finance
departments that employees will take their newly acquired skills and leave, companies need to
continue to spend money on both internal and external training for their people.

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 6. MARKETING TECHNOLOGY

MARKETING TECHNOLOGY
Four issues dominated the ADMA Think Tank
discussions on marketing technology;

CONTENT MARKETING & PROGRAMMATIC ATTRIBUTION

MANAGEMENT ADVERTISING ADVERTISING
INTEGRATION

CONTENT MANAGEMENT.

Content may be king but it is a cruel and demanding ruler. Marketers are struggling with the
sheer scale of the content task they confront, how they can best segment and personalise
content for consumers, how they manage and distribute it and how they use the analytics they
garner from their content programs to inform future activity.

And the marketers say at a basic level one of the biggest problems they face is simply knowing
where all that content is in their organisation.

A strong governance framework is important if brands want to quickly take their content and
get it out to their web channels and other third party systems.

“All kinds of problems from conceptualising a piece of content to

getting it out into a platform can take weeks and sometimes months.”

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 6. MARKETING TECHNOLOGY

MARKETING AND ADVERTISING INTEGRATION.

Our recent CMO of Tomorrow study revealed that marketing executives are still grappling with
integrating their marketing technology and advertising technology platforms.

Historically these two related technologies evolved in parallel with little or no sense they were
both trying to achieve the same outcomes.

In the simplest terms marketing technology tends to be used on owned media and advertising
technology, as the name suggests, on paid media. Brands typically had more control over
marketing technology and were more reliant on their agencies for advertising technology
(although this is starting to change).

And to make matters more complicated the pricing models tend to be different. Marketing
technology will often come with monthly annuity fees on the cloud whereas as advertising
technology tends to lend itself to ticket clipping, although again the rules are not absolute as
anyone with an enterprise email package knows.

The vendors themselves, particularly

marketing cloud vendors like Oracle, Adobe
and Salesforce have been acquiring ad tech
and building it into their platforms in recent
years, while traditional ad tech companies
such as AdRoll have now broadened into
marketing technology fields like email.

The reason is simple. Brands get a better

response when they coordinate between
marketing and advertising technology-based
campaigns.

Furthermore, analysts like Gartner say that marketers must consider advertising technologies
as integral to, rather than segregated from, their main operational technologies. (Indeed the
analysts have now combined their marketing and advertising hype cycle report into a single
view).

Participants at the Think Tank confirmed that for now at least the distinction remains.

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 6. MARKETING TECHNOLOGY

While you may have a marketing campaign that is content driven, because of internal silos
nobody thinks to link that together with their online advertising at a campaign level because it
runs through a different silo. And yet when they do the evidence from companies like Salesforce
is that brands can get 20 to 25 percent higher returns.

“There is a big difference between CRM or customer data marketing or

prospecting, or anonymous browser based behavioural targeting. And
we the banks are extremely cautious about any personally identifiable
information (pii data).”

The issue more advanced companies often run up against when they try to combine the two is
ownership of data and – especially for companies like banks – what they can do with that data.

A connected experience between advertising and marketing is a challenge for many because
structurally the data, the content and the people are separate and in many instances are located
at other companies altogether.

Marketers talk about one single digital ecosystem but it’s a long road. There is an aspiration to
connect those two worlds and to unify the experience. The need for more control and greater
visibility is leading more marketers to look at bringing more of their digital programs back in
house, wresting control from their agencies.

PROGRAMMATIC

Australian brands were very early and very fast

adopters of programmatic advertising. But in
the rush towards adoption, the quickest and
most convenient path to marketing was often
through a media agency.

Over time the agencies started capturing an

increasingly large share of their profits from
their trading desks and a lack of transparency
meant that brands became uncomfortable
with the situation.

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 6. MARKETING TECHNOLOGY

More to the point the need for visibility and control over data has seen a push to bring
programmatic in house in many companies during the last year.

“It was cost and data that drove the decision. Even with social we couldn’t
see our own results and the costs were too high. Media agencies get
a bad rap for digital costs but once you realise how much the direct
partners charge them you understand why they have to clip the ticket.
And often they are not clipping it as much as you might think.”

Bringing programmatic in house is not for everybody. The range of skills required can rarely
be found in a single employee. That makes staff an expensive investment. Brands then need
to run campaigns at sufficient scale to justify the ROI.

ATTRIBUTION

The final area, and one of the most vexed in marketing and adtech is attribution. How do you
know what worked and to what extent it influenced a sale? While there is plenty of discussion
about new attribution models and the promise of machine learning and AI, here is the reality
of what we found when we asked marketers a very simple question…

“How many of you still rely primarily on last click attribution?”

Every hand in the room went up. Every. Single. Hand.

Beyond simple models like first and last click, attribution can become complex and expensive.
The storage alone can run into huge numbers for a big campaign, and then there is the cost
of finding the data scientists and analysts to make sense of the outcome.

The prevailing view is that a market opportunity exists somewhere between the kind of free
attribution modelling a company like Google provides (which coincidentally always seems to
suggest the best answer is ‘Google’) and the giant corporate programs that can run as high as
$50,000 a month. And there is a final problem.

Even when the investments are made in attribution, marketers and their peers in the business
need to be able and willing to act on the insights gathered from the program.

That, according to marketers, is not always so.

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 7. CONCLUSION

CONCLUSION
In Australia digital accounts for close to 40 percent
of the total advertising spend.

And like markets such as the UK, it will not belong before it represents the majority of the
advertising spend.

At the same time there is a growing parallel investment in marketing technology to allow the
brands to take more control over their own destiny.

At a platform level these two technologies are being drawn together in a manner which
suggests there is more disruption ahead for the contemporary CMO.

Marketing leaders will need to transform their departments to reflect the rapid changes in the
market while at the same time transforming themselves.

CMOs are now increasingly expected to act as the customer voice in their companies not only
fighting for that voice to be heard but actively engaging at a design level for product and
service evolution.

Budget remains the biggest impediment to faster development of digital marketing platforms
and programs. The most successful marketers are likely to be those who can win such battles
internally, probably as peers in the C-Suite, and eventually as contributors at board level.

It won’t get any easier. Technology solutions are still emerging rapidly even as marketers try
and make sense of current solutions. Attribution remains immature to a large extent and many
brands are only now getting control back (from the agencies) of the trading desks that place
their paid media.

Skills and capabilities are the other significant point of tension. As platforms proliferate, brands
will need to continue to invest heavily in staff capabilities and talent retention will remain
difficult while those skills remain in high demand.

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 8. ACKNOWLEDGEMENTS

ACKNOWLEDGEMENTS

The Association for Data-driven Marketing and Advertising (ADMA) is the principal industry
body for data-driven marketing and advertising. ADMA is also the ultimate authority and go-
to resource for effective and creative data-driven marketing across all channels and platforms,
providing insight, ideas and innovation for today’s marketing industry.

The largest marketing and advertising association in Australia, ADMA has over 600 corporate
members including major financial institutions, telecommunications companies, energy
providers, leading media companies, travel service companies, airlines, major charities,
statutory corporations, educational institutions and specialist suppliers to the industry including
advertising agencies, software and internet companies.

As marketers, we’ve faced unprecedented change over the past few years. New channels, new
technology, new consumer models have accelerated. It’s moving faster than the speed of life.
ADMA exists to help members navigate the rough terrain of this change.

We support our members with advocacy to Government and regulators, we provide 24/7
opportunities for education, host events and awards, and help marketers understand and apply
codes of practice to help them comply.

Further, we are a rich source of online and offline tools and resources to help marketers be
better marketers now and into the future.

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8. ACKNOWLEDGEMENTS

Thanks to the members of the ADMA digital Think Tank

and Andrew Birmingham, Which-50 Media.

Anthony Mansour Mobile Expert Anthony Mansour Consulting

Bonnie Thorn Head of Digital Metlife

Director, Marketing -
Brittany Wong Vision Critical
Asia Pacific

Head of Social Media

Chris Gross Fox Sports
& Digital Marketing

Chris Maloney Head of eCommerce Moet Hennessey

Chris Tew EVP Asia Pacific 3radical

Channels & Partnerships

Darren Watkins Acquia
Director

David Hirsch Head of Financial Services Bupa

Gavin Merriman Global Head of Digital Nude By Nature

Jules Hall CEO The Hallway

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8. ACKNOWLEDGEMENTS

Narelle Riley Head of Marketing Trafalgar Tours

National Digital Marketing

Sarah Peacock PwC
Leader

Simon Marks Head of Digital Marketing Westpac

Nicole McInness Marketing Director Australia e-Harmony

Paul Bennett Marketing Director MetLife

Group Head of Digital,

Rebecca Newton Marketing Operations & Crown Resorts
Comms

Tim Lovitt Head of Digital PWC

Tim Bostrgidge Group Project Director Cebit

Head of Online
Willem Paling Foxtel
Performance & Analytics

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