Some big brands are still looking for the best way forward in the transition to digital and are facing a variety of challenges along the way, including internal issues, the need for more dynamic media approaches and the pressure to stay up-to-date in a quickly evolving space.
Digital marketing has been an adjustment for all companies, but, in a way, it has improved the efforts of small- and medium-sized business more than larger brands and enterprises because it has evened out the playing the field. Brands like Coca-Cola, P&G and Mondelez are pouring major resources into digital marketing, but recent changes to their approaches such as big hires, reconfigured departments and budget shifts suggest that finding a strategy they can commit to remains elusive.
One impediment is the internal hurdles big brands face when trying to implement new marketing tactics, particularly as fresh developments continue to burst on the scene — such as Snapchat’s ascendency this past year — making it difficult to determine where the most value and ROI might be found.
“They struggle to get digital marketing because of the different channels there are to choose from and the resource it takes to implement it effectively,” Mark Russell, marketing consultant at bmicro, told Marketing Dive. “Digital marketing thrives off the ability to act fast — just look at trending hashtags on Twitter and newsjacking the media.”
Meeting the challenge
With digital marketing, smaller and mid-size brands are better able to compete, meaning big brands aren’t going to win simply by throwing around more money to get noticed. Where traditional channels such as linear TV spots and national print campaigns require budgets that only the largest brands could bring to the table, digital channels offer a wide variety of price points for advertising as well as opportunities to reach an audience via more organic outreach. And technology allows SMB marketers access to tools that automate huge email campaigns as well as many high-level marketing functions such as data analytics for personalization and targeting.
While big brands have been active in digital marketing for years, a recent flurry of dustups to their marketing strategy suggest they are still struggling to the meet the challenge. Coke recently hired its first chief digital marketing officer to optimize its digital efforts and not just put ads on social media. Coca-Cola CMO Marcos de Quinto also recently said that TV advertising has a better ROI than digital, and added that the company is trying to transform into a digital company.
Last fall, P&G revamped its Facebook advertising approach to reduce its targeted advertising on the platform in favor of a broader brush to promote its consumer products. The company has also reduced the number of agencies it works with by 50% as it looks to be more efficient.
Also last fall, Mondelez shifted strategy when it created separate heads for e-commerce and for media and digital, responsibilities that had previously been combined under one executive. The move points to the growing importance the company is putting on e-commerce.
Soon after putting its digital agency under review, Pepsico moved its social media in-house and started allowing third parties to bid on other digital marketing activities.
Digital is in the driver’s seat
One reason big brands may be struggling is that their marketing teams and infrastructure were built to support traditional media buys, but digital advertising requires a wholly different strategy.
The issue is traditional tactics attract a passive consumer sitting in front of TV or reading a newspaper, but digital marketing puts the customer in charge of searching for relevant information, always ready to filter or click away from content that isn’t relevant.
“Not only is digital a different medium, it’s a different audience that has new expectations when it comes to advertising,” said Annalea Krebs, founder of influencer marketing company, Social Nature. “Unlike traditional media, digital is in the driver’s seat when it comes to browsing.
”Big brands would be wise to note the difference, noting that shift in power, and design their ad strategy to be relevant to that new user experience,” she continued.
Too many big brands approach digital the same as traditional media buys with display ads even though research suggests younger demographics are more likely to trust content that doesn’t come directly from a brand, per Krebs. Tactics like sponsored stories and influencer marketing are successful because they get consumers talking about products they’ve tried on social media, which cuts through marketing clutter.
“Successful marketers will use more authentic advertising that educates, inspires and is people-powered,” she said.
It’s not only about resources
Big brand budgets dwarf SMB’s spending power on marketing, but Russell said a lack of agility gives SMB marketers an advantage.
However, one advantage of deeper pockets is being able to create better content. Having strong content at a time when more consumption is happening online can be a major win for brands. For example, Marriott develops original scripted videos that are drawing large audiences and even turning into a revenue-generating opportunity for the hospitality chain.
With more resources available, big brands are also better able to invest in and test up-and-coming technologies. Companies like Mondelez International are sponsoring startup incubators to learn from smaller innovative companies. However, it is unclear what kind of returns this strategy is producing as Coca-Cola, one company with an accelerator program, recently it shut down in order to focus marketing innovation resources around projects within the beverage portfolio, illustrating the challenge in bringing startup innovation into a multinational brand.
In the end, resources alone aren’t enough if the message doesn’t get attention from the right audience. Krebs sees big brands as being threatened by smaller brands getting attention from younger consumers through “progressive, authentic and engaging” digital tactics.
“The way that bigger brands can win is through adopting new technology and experimenting with new digital technologies such as the Internet of Things as smaller brands and SMB marketers may be a bit reserved here,” Russell noted.
What can big brands learn from smaller marketers?
In optimizing digital strategies, big brands can look to smaller marketers for guidance, according to Krebs.
For example, smaller brands don’t have the same pressure to control their marketing message so they’ve been faster to hand the power back to the people and engage their consumers in their marketing. With 92% of consumers trusting content from peers more than traditional brand advertising, more marketers may use everyday consumer reviews and user-generated content versus paid spokespeople including bloggers to lead their digital marketing.
Smaller brands have smaller budgets so they’ve always been more focused on developing engaging content that inspires an action, and hopefully even a referral. If big brands changed their goals from impressions and clicks to getting consumers to share their brand with friends, they’d likely see more success overall. Savvy marketers will focus more on brand engagement or the actions consumers take based on their brand experience such as posting online reviews, referring a product to friends, redeeming a coupon or downloading an app.
Smaller brands understand that people will be more likely to share content and products that they believe in and can put their personal brand behind. Big brands should think about why would someone share their product or ad. With 85% of millennials saying they correlate purchasing decisions and willingness to recommend a product to a company’s social good efforts, more brands like Back to the Roots will rise to the top.
Ultimately, the big brands that embrace the fundamental differences between channels and tactics and adopt a more customer-first approach will be the ones able to put their massive marketing and R&D budgets to optimal use.