No one ever said digital transformation would be easy

‘Digital transformation’, one of the buzzwords du jour, evokes an orderly process with a rational beginning and a utopian end. That, of course, is a lie. In truth, most businesses have been progressing, or at least lurching, through digital transformation for a long time—some with clear intent and a plan, some not so much. In many cases marketers have been near the forefront of these efforts.

At a breakfast roundtable on the topic at Campaign360 in Singapore last week, a group of marketers showed their their hard-won knowledge of the challenges inherent in digital-driven change—from properly balancing tactical marketing and brand building, to avoiding the pitfalls of short-termism, to guarding against data echo chambers. Marketers may not always be the ‘architects’ of transformation (as the roundtable title put it), but they certainly have a clear-eyed view of the things companies need to focus on as they continue to evolve. Here are a few key pieces of advice.

Don’t forget to build brand

One thing all attendees agreed on is that brand-building activity must maintain its rightful place and be appropriately balanced with product- and performance-oriented activity.

“I find that when companies focus on digital, it tends to skew toward short-term and transactional behaviour, because it's so easy,” said Edward Bell, general manager of brand, insights and marketing communications at Cathay Pacific. “And I think for brands that is a big problem, because that's not what brands are. And they don't realise that until years later."

"How do we elevate the product brand to be the proof point of your total brand narrative? But at the same time, how can you also get the total brand positioning to be also reflected in your product marketing?”
—Xiao Wei Liu

Digital advertising is like a “sugar rush”, he said. It provides a quick hit of positive reinforcement, but leads brands to neglect choices that will be healthier in the long run. As a brand is fundamentally a “bundling concept”—a collection of positive attributes that has to be built up in the consumer mind over time—an overly short-term, performance-oriented focus risks failing to nurture that construct.

Xiao Wei Liu, VP of communications at Shell Eastern Petroleum, echoed the challenge of striking this balance. "How do we elevate the product brand to be the proof point of your total brand narrative?” she asked rhetorically. “But at the same time, how can you also get the total brand positioning to be also reflected in your product marketing?”

Companies are having “revelatory moments” about how they got may have gotten carried away with digital advertising, said Richard Townsend, CEO of Circus Street (the training provider that sponsored the roundtable). “It does tend to lead toward the acquisition channels and not so much the brand channels,” he said. “People are starting to understand that now."

Don’t let data lead you (astray)

While acknowledging that a data-driven approach to marketing is crucial, this group of marketers recognised that it’s also all too easy to let a focus on data lead you into the weeds. 

"There's more data in digital, but sometimes the data is telling you the wrong things," Townsend said. For example, he said, many companies invested heavily in search advertising early on, because data told them it had a lower CPA (cost per acquisition). Later, they were shocked when their overall sales fell. “What clearly was happening was, people were coming to search anyway,” he said. That money would have been better spent elsewhere, on acquiring new customers, which cost more to attract but are worth more because they bring incremental revenue.

“The people that are making the most impressive gains in this area, are the ones that intuitively or theoretically decide what they want to do—’what are we trying to achieve?’—and then they use data to measure the impact, rather than the other way around," he said. "It's knowledge versus wisdom. You need to engage the people who have the wisdom within the business, so you're not just relying on the people with the knowledge."

A key part of seeing data accurately is properly attributing results to specific marketing actions. But that continues to be perplexing.

"We tend to think a lot about last-touch attribution, but in reality the customer may interact with a brand through a lot of different interactions,” said Jessica Chuang, director of regional marketing for Greater China, Southeast Asia and India, for Hotels.com at Expedia Singapore.

"The whole thing is just having the measurement reflect your objectives. If you’re measuring last click but actually what you want is new customers, then it's not going to work."
—Edward Bell, Cathay Pacific

Sharliza Rahman, vice president with DBS, indicated progress is being made. "I think DBS in its space has been quite successful, because we've successfully managed to attribute something happening in a given area with actual ROI,” she said. “It's still a work in progress, but we're definitely working on the attribution modelling."

At HSBC, attribution is approached with healthy caution: "To this point, when we look at the attribution modelling that is available to us at the moment, the data-driven attribution is just starting,” said Aga Bialkowska, senior vice president of digital acquisition at the company. “Outside of data-driven attribution, every model is biased and imperfect…. Linear is just as bad as last-click.”

Bell pointed out that the key is choosing the attribution model that fits your objectives. “If you're trying to maximise conversion or purchasing, then last-click makes sense,” he said. “But if you’re trying to prospect for new people, then you may want any-click. The whole thing is just having the measurement reflect your objectives. If you’re measuring last click but actually what you want is new customers, then it's not going to work."

Journey with your partners

Both clients and agencies need to build a diverse and fast-changing skill set to navigate a true digital transformation, which can lead to frustrations. "Sometimes we want to fly, but they are only able to run," said Josephine Tan, global media director with McDonald's.

“We need to consider how we partner with them in a more integrated fashion."
—Josephine Tan

Rather than quickly dumping an agency that comes up short on some specific skill, it’s better to think of agencies as companions on a journey. “We need to consider how we partner with them in a more integrated fashion," she said.

Get high-level buy-in

Among the strongest points of agreement was that a digital transformation can’t just arise from ad hoc activity; it requires impetus and direction from the very top of the org chart.

Involvement of senior leadership is critical for connecting the dots, Tan said, citing an example involving mobile advertising. "We have said that we will give a different multiplier, to run harder on the mobile platform, because we really need to think about how mobile gives us a longer liftetime value, and we are willing to do that,” she said. "But if this decision is not coming from the top, then we would just look at things in silos—last-touch attribution—and not really be thinking about cross-device."

Beyond a more holistic viewpoint, the involvement of senior leaders lights a fire under a company, participants agreed.

"Once you get that engagement going, once that filters down, it goes off like fire, because then everybody sees their leaders doing the work, asking questions about programmatic when they didn't even know that the guy knew what that was."
—Richard Hirst, Circus Street

HSBC’s Bialkowska said she saw the effect in action at a previous employer. “With a change in the CEO position, it was phenomenal how it cascaded down,” she said. “Everyone was making effort to understand new technologies and new trends, something that earlier they would just put on the back burner because it’s not part of their job."

Richard Hirst, Circus Street’s MD in APAC, argued that it’s not enough to have leaders pushing for change; getting their hands dirty (by, say, going through a training program) is particularly beneficial. "Once you get that engagement going, once that filters down, it goes off like fire, because then everybody sees their leaders doing the work, asking questions about programmatic when they didn't even know that the guy knew what that was,” he said. “Then the learning lower down really starts to accelerate." That in turn leads to more confidence throughout the ranks, which translates to bringing forward better opportunities, managing agencies more effectively and even closing down bad ideas more quickly, he added.

Your digital officer should have an expiry date

For many companies today, having a digital strategist, a person who understands the role of digital within the wider strategy, makes sense, according to Townsend. But the end game has to be that there’s no digital strategy—there’s just strategy.

"I also argue against having a digital officer,” agreed Tan, “simply because you need someone at the bottom level to be able to advocate for digital in every aspect, and to translate it as well.”

"Our contention is that we need to know the end game. What does customer-centricity look like for our organisation?” And then the marketing team's got to then transport that to the wider organisation."
—Richard Townsend, Circus Street

Digital strategy should be a transformative function, Cathay's Bell chimed in. "You need to put an end date on it. Otherwise it becomes, 'Go to the digital team, that's what they do'.”

In the end, digital transformation isn’t just about understanding and using digital tools, Townsend said. It’s about becoming more customer-centric and adapting to the digital world the consumer lives in. No one is better equipped for that conversation than marketers. "Our contention is that we need to know the end game,” he said. “What does customer-centricity look like for our organisation? And then the marketing team's got to then transport that to the wider organisation."