Enough already!

When are we going to just drop the “Digital” and call them what they really are? It’s easy to think this is a minor point, but qualifying something as “digital” is old-school, traditional thinking. No wonder companies have such a hard time becoming digital. This is not a new topic by any stretch and it’s generally created by the incumbent as a way to distinguish the traditionally accepted way of doing things with potentially new and disruptive methods. It’s a subtle change, but an important one because in some ways, de-legitimizes the new way of doing things and forces the new to prove its worth. Fair enough.

In the “Innovator’s Dilemma,” we learned how disruptive innovation often starts off as an low-performance substitute for the incumbent technology. No one believes in it initially, but then after a few key iterations, it takes off and takes over as the dominant technology.

This theory has played out over and over again in nearly every industry from steel mills (b-school case studies galore) to telecom to photography. It is only a matter of time before we see this happening to digital and social marketing. As the tools to connect brands to customers and to other customers get better, more reliable and trustworthy, the more we will see a shift away from traditional means. If we apply social marketing to the graph above, I would say we’re still at the beginning part of the trajectory.

Those who are in traditional industries, like TV, need to adapt rapidly and learn to use the new technology to become relevant to their audiences. Take new Late Night talk show host, Jimmy Fallon. As an avid tech guy, he has made use of Twitter to generate a following of nearly 300,000 people whom he can directly engage with. He invited Engadget editor Joshua Topolsky on and Digg founder Kevin Rose. (The guy is clearly in touch with the digerati.) He asked his Twitter followers for questions to ask Cameron Diaz. He has even used it to help generate enthusiasm for his show, but even members of his audience. The other day, he picked a random guest — Bryan Brinkman –  and asked his Twitter followers to follow Bryan on Twitter. Within a day, he went about 30 to over 20,000 followers. This is how to use social tools to connect with your customers. Those who get it have already hit the ground running and are ahead of the curve and are betting their futures on digital.

So, what does this mean for businesses? Even though it’s been over a dozen years since the web started taking off, it confounds me that web and digital marketing accounts for a small percentage of overall marketing budgets. At some large Fortune 500 companies, I’ve seen them allocate less than 10% of their budget on digital; the cost of creating and running a commercial can often buy them an entire years’ worth of digital marketing effort. Despite this, I’m not particularly concerned because it’s still early days and digital and social marketing will eventually take over as the dominant and become the incumbent way of marketing. At that point, they will simply be referred to as “marketing.” Period. That is, until another technology comes around to once again, disrupt the value chain and take over as the legitimate incumbent. You can bet that the smart money is already on it.

At various points in my career, I’ve worked with various marketers who all dream of closed loop marketing, where they can account for the direct impact of their efforts on sales. If sales is like an art and science and marketing is much the same way. These days, everyone wants it to be more like the latter, with more predictable and demonstrable results.

In a previous role, I worked at a demand generation software company that helped companies market their wares and track how effective their campaigns were. Besides email and microsite campaigns, they had a pretty cool feature that tracked a user’s behavior on a website. What separates this from your typical analytics program, was its ability to provide very detailed tracking on a per-user level and if the user clicked through to your site via email, we’d even know exactly who it was, how often they visited the site and what they did there. It was the online equivalent of keeping an eye on people in your retail store – what products they picked up, what labels they were reading, which sales people they spoke with and what items they were thinking of buying. The software had the ability to aggregate all of these activities automatically and rate the quality of these web-based leads depending on what you deemed important. For instance, if a user came to a site through an email campaign, clicked through to the site but then left, that person would rank pretty low. But if another user clicked through, visited a few times, downloaded a whitepaper and signed up for a webinar or demonstration, that person would rank quite highly. The lead scoring program would notify sales people who performed a certain number of these valuable activities and if the user did enough of them, he or she would be considered a lead and thus worthy of a follow up email or invitation to an event. For companies that want to allocate their sales resources strategically, this is a great time saver because it helps separate the tire kickers from the true spenders. It also gives insight into which companies might be interested in your own company.

More recently, I’ve been looking into linking behavior with business results. Web analytics has certainly come a long way from the days of downloading huge log files and parsing them into your desktop software that made pretty generic charts and graphs. I would say the capabilities of companies like Omniture, Webtrends and Google Analytics has come a long way since then. Our ability to track activity and visualize data is amazing. We can even understand which web pages are putting in the most contribution to conversion, a term I first learned about in accounting class. But when it comes to inferring user intent, the picture becomes less clear. For instance, I can know what % of visitors ultimately end up converting, but what are the activities that are required to make that leap? And what if the leap requires visiting other sites that you can’t track or analyze?

That’s the next step that so far, few if any companies have been able to take. Here are a couple of scenarios:

• A site visitor is about to sign up for your service or buy something online but wants to read a third party review before committing. They leave, visit any number of sites from Amazon, Yelp, Epinions etc. and then sometimes come back to buy.

• Someone visits your site via search and decides to spend time there. Next, the user searches for your brand to get near real-time commentary on Twitter before coming back to sign up for a trial.

See what’s happening? Just like in real life, people are increasingly gathering information elsewhere particularly on 3rd party sites. But for a marketer, how do you quantify the value of these interactions not happening on your site? How do you score leads happening out in the blogosphere, forums or Twitter? As we got closer to closing the loop, it opens up and gets even broader and even more complex than before. So what’s a marketer to do? Ideally, there would be a super tracking cookie that could send back data on sites users visit, but privacy concerns don’t make it feasible. Here’s some general thoughts on alternatives:

• Monitor the social space and get a pulse on the quantity, tone and influence key sites/destinations have on your customers. There are tons of tools that can help you do this, including Radian6, TruCast, Cymfony and others.
• Get a baseline understanding of your brand’s chatter and draw correlations between volume and tone of discussion with product releases or announcements.
• Segment this incoming traffic from social sites and compare with direct site traffic, search engine and campaign traffic. This will give you an idea of what impact the social sites have in comparison. It’s not perfect, but it’s a start and right now, it’s more art than science.
• Keep at it. Marketing is a constant evolution, so the more you can observe, the better you can refine and the better you can deliver to your customers.