Crossing the Digital Marketing Chasm

Voltaire once said, “If you would like to converse with me, define your terms.”  He would have never made a career as a digital marketing guru.

However, if digital marketing is ever to mature into a serious enterprise, we need to return to Voltaire, because defining terms is the core digital problem.  For any communication endeavor to succeed, there needs to be some consensus of what we’re talking about.

Digerati like to say, “Nobody gets it!”  Gets what?  That’s what we need to figure out.

Massive Media

Marketing today is an enormous enterprise.  Global media spending is over $400 billion and close to 1% of global GDP.  Total marketing expenditures are harder to measure, but they’re probably about double that.  It’s not unusual for large companies to allocate 10% of revenues to marketing and budgets of over $100 million are amazingly common.

But those are just numbers.  To truly understand the problem, imagine what you have to do to promote a product in the US.  There are over 150 TV markets and more than 200 radio markets, each with different demographic, ethnic, content and lifestyle characteristics.  Even a fairly simple targeting scheme needs to take into account each one of these factors in every market.

To meet these challenges, traditional media agencies have evolved into highly optimized machines.  Marketing concepts are broken down into actionable briefs.  Literally hundreds of people must dance to the same tune while they plan, implement, monitor and evaluate campaigns that must perform flawlessly.

Success is measured in minuscule changes of market share that represent exorbitant amounts of money.  Even a small error can mean catastrophe.

Digital Confusion

Digital marketing revolves around innovation.  What’s going on?  Nobody really knows.  That’s the point!

Nevertheless, something important is clearly underway.  Broadcast TV evolved into cable before everything started heading online.  Audiences fragmented and then metastasized.  Media visionaries assure us that it will all converge, but every time it looks like it will, something new arises that doesn’t quite fit.

Much like traditional marketing straddles geographical, demographic and economic spaces, digital marketing must navigate through conceptual ones.  There are thousands of smart, dedicated people working out very tough problems (and also, it must be said, more than a few jackasses causing some more).

Crossing the Chasm

Traditional media is a large scale, optimized enterprise.  We’ve been doing it for decades and successful practitioners need to do it extremely well.  There is very little room for error and therefore it makes sense that the traditional media world is fairly risk averse.

Digital media, on the other hand, is innovative and, as I’ve said before, great innovation is always crappy.  It is, in effect “in beta” (which is tech talk meaning we have the right to screw up).  Numbers are smaller, profits are higher and the margin for error is much more lenient.

Geoffrey Moore, in his book Crossing the Chasm, dealt with a similar issue: How do you move a product from early adopters into the mainstream?  The first consumers of digital cameras were much different than those of us who just wanted an easier way to take pictures.

Digital media, however, is a much tougher problem because it is not just one technology, but a rolling montage that is continually disrupted by new stuff that comes along every few years.  From web sites to search to social media and now on to content marketing to semantic apps and who knows what’s next?

The core digital marketing challenge is to continually bridge the gap from the innovative and relatively unknown to standard solutions that can be optimized at scale.

Organizing a Solution

Clayton Christensen gives us some guidance in his discussion of integrated vs. modular organizations.  Integrated organizations are geared towards what we don’t do well and therefore focus on proprietary solutions (i.e. Apple).  Eventually, standards emerge and organizations become more modular and specialized (i.e. PC’s).

Probably the best example of an integrated organization was Ford’s River Rouge facility, which basically put raw materials in the front door and shot cars out the back.  Today, of course, Ford doesn’t make cars as much as it designs and assembles them.  Most of the manufacturing is done by hundreds of specialized suppliers.  That’s a modular organization.

Marketing services have gone through a very similar evolution.  Full service agencies have fragmented into specialist agencies that focus on particular disciplines such as creative, media, point of sale and so on.  These are highly optimized organizations who do their jobs extremely efficiently.

In the digital world, however, most successful agencies are full service.  Operational interfaces are weak and true standards are scarce.  There are a variety of different platforms and protocols so communication needs to be highly detailed and intense.  If one little Indian goes off the reservation… disaster ensues.

Defining the Right Silos

Gurus and pundits tell us that to compete in the digital marketplace we need to “unsilo” our organizations.  Nothing could be further from the truth.  What we need to do is build leaky silos in the right places.

In the traditional media world, innovation is a buzzword more than a reality.  Nobody with any good sense is going to move significant resources from time-tested methods that work into something they don’t really understand.  That doesn’t mean it’s never done, just that those that do court ruin (just ask Jerry Levin).

There are some areas of digital marketing that have evolved past the modular stage.  Banners, search and, increasingly, social listening, lend themselves to the modular organization of the traditional media world.  We know how to do these things well and our task is to optimize them.

However, the most exciting and emerging areas, such as content marketing, semantic applications and social network analysis are still in “beta.”  We’re still learning about these things.  They lack strong operational interfaces and need integration.  Our challenge is to make them work at all rather than to do them very well or at scale.

Frenchmen, even dead ones, can still be right.  If we wish to converse about digital marketing, we must first define our terms.

– Greg