NEW YORK: Brand owners that adapt their marketing models to effectively leverage digital channels enjoy benefits in areas including revenue generation and more efficient media spending, a study has argued.
The Boston Consulting Group, the management consultancy, interviewed leading marketers from 30 major corporations, with 20 of these operators featuring in the Fortune 500 index.
When charting the "journey" firms take in this field, BCG stated the first phase was "experimenting", where digital receives less than 10% of budgets, media agencies develop campaigns and analytics tools are acquired.
The next step is the "building stage", with digital's share of expenditure rising to around 12%, and strategies such as identifying influencers, creating online communities and enhancing wider capabilities.
Upon achieving "digitally evolved" status, new media receives at least 20% of all marketing outlay. Advocacy schemes, "empowered" employees, using speciality agencies and exploiting big data are some of the common tactics here.
"Companies need to restructure their marketing organisations to fully capitalise on today's opportunities," the study said. "But too many companies are jumping onto the digital bandwagon without thinking through this critical step."
BCG suggested aligning digital initiatives with business goals and deploying social media to improve customer perceptions generally resulted in a 10% lift in brand favourability scores at minimum.
Reaching shoppers more effectively and pursuing an integrated marketing strategy incorporating social media boosted sales by 0.7% to 1.1%, fuelled spending gains of 50% to 75%, and cut product returns by up to 65%, it added.
More efficient channel selection and management, when coupled with refining the media mix as a whole, similarly served to reduce wasted media expenditure by between 10% and 80%.
Complaint resolution also rose by 90% and support costs declined by 40%, while listening to online feedback can slash research costs by as much as 80%, yielding "hundreds of thousands of dollars in savings".
In assessing current challenges, 77% of the sample mentioned problems regarding knowing where to engage customers and 48% outlined obstacles related to convincing stakeholders to shift the marketing mix.
A further 29% cited issues concerning hiring or training talent, 23% pointed to difficulties of social media measurement, and 16% found it hard to deliver consistent cross-channel messages and build a "test and learn" culture.
Data sourced from Boston Consulting Group; additional content by Warc staff