Introduction
Internet Marketing, Digital Marketing, eMarketing, New Media, Multi-Channels Communications...
The list of labels is long for a fairly simple fact: you can now promote your brands on line over the internet, mobile telephones and several other kinds of interactive devices.
Given that producing and sending digital messages is faster and less expensive than putting ink on paper or broadcasting, why is it so underdeveloped in Ukraine?
The conventional answers are:
1- The majority of
Ukrainian consumers do not have access to digital
media such as the internet or G3 mobile services
2- Those consumers who do have access do not have enough bandwidth to
receive "rich content" (jargon for audio and 3- visual comparable to
television)
3- Ukrainian marketers are too conservative to experiment with new
media
4- Ukraine is different
In this paper, I will debunk the above myths and propose a fifth answer: the differences between digital and traditional media remain uncharted. As a result, a lot of digital campaigns fail because they are misguided. Prudent Ukrainian marketers have no wish to invest into something no one has explained to them. I will be providing opinions on how to address the problem.
Here, I owe you a couple of warnings. Although it is bad manners, I will sometimes start sentences with the forbidden pronoun "I". My purpose is not to claim credit for inventing the internet. Simply, I will be making fairly blunt statements about firmly-anchored myths and I want to make it clear that I am expressing personal opinions.
I also staunchly believe that the mission of communication and marketing services suppliers is to increase client profitability by helping sell more at a lower cost. Sugar-coating this mission in "brand auras" and "engagement marketing initiatives" will not change the fact that consumers can only buy actual goods and services.
This document argues the case that digital channels are already the most important media in any plan. However, rest assured that I know that the days of traditional media are not over and that few ladies would buy a dress without trying it on in the physical universe.
I- Mythology
Users do not have access
It is a fact that the internet is used by only 22% of Ukrainians.
This is somewhat disconcerting to marketers, especially if they are used to penetration above 90% in mature markets.
However, 22% of 45 million comes close to ten million people: more than the total population of Sweden. Call that a solid base for the right marketer...
Another meaningful figure is the total number of Ukrainian internet users ten years ago: less than 200 000. In other words, the Ukrainian Internet audience increased by a factor of fifty in ten years! And climbing...
As to cellular services subscribers, they index at 119: giving two live mobile connections for every person aged 13+ in the country. Coverage reaches 99.96% of the total population, more than in the US or Russia.
True, GSM services providers receive, on average, less than seven dollars per mobile user every month. One conclusion would be that Ukrainians have mobile phones but do not use them... But averages are misleading because they are not the same as medians.
We all know that in most categories something like 10% of consumers account for something like 80% of consumption. We need more data on who uses how much GSM. My current hypothesis is 2% of users generate 60% of traffic. I base it on broadband internet usage, which correlates closely.
So, what can we tell people who raise the access objections?
One simple answer is:
There are 80 million devices in Ukraine that can receive a digital message, more than all radios, television sets, and fixed telephones put together.
And please note that this eighty million does not include bankomats (ATMs), self-service payment kiosks, digital posters, connected music players, or digital screens in public places.
Another answer is "go take a walk". You will meet two generations of Ukrainians who no longer care about anything unless it is on an LCD screen.
[All statistics are from the 2008 International Telecommunication Union study at www.itu.int]
Those who do have access do not have enough bandwidth
True, broadband internet reaches 2% of Ukrainians according to the ITU. Marketers raise this objection and will keep raising it until someone pre-empts it for them.
Low bandwidth is just like radio advertising: what it lacks in "rich content" is very profitably offset by its low cost and extraordinary reach. The rest, like radio, is up to the creatives' imagination.
More creativity would help selling effective low bandwidth campaigns.
By "effective" I mean: "Please stop spamming me with unsolicited SMSs in transliterated Russian about singing underwear Pop Music groups launching yet another new album. You are wasting your time, which I could care less about, but you are also wasting mine, and that I never forgive!"
Instead, they should find out who I am, what I do, and then ask me what I want. God knows they can: they are sitting on ten years of data on my mobile phone habits!
We also need to show that this lonely 2% broadband user is an opportunity for clients.
The blessing disguised here is that those 2% of users are the ones with the most purchasing power. When planning and producing a digital campaign that can only work on broadband, IP television or G3 mobile devices, you get a magical filter that guarantees you are not talking to people outside your target.
Half the answer to the bandwidth objection is:
That is the reason we spend so much time and effort developing campaigns that reach all your audiences, whatever their devices, and sell your brands through creative use of the appropriate technology.
And the flip side:
We are recommending a high-resolution virtual reality shop precisely because it requires broadband. It will pre-qualify buyers so your expensive physical showrooms / stores / model houses / test-drive circuits... (and your salespeople) are not attacked by brochure recyclers and balloon collectors.
Marketers shy away from anything new
If this is true, then someone needs to explain why, in my thirty-odd years career, my employer (the hot creative advertising agency) was always dragged kicking and screaming into "unprofitable, experimental, faddish and unnecessary" technologies such as faxes, word processing, email and teleconferencing, by our highly-conservative clients?
In fact, clients are very quick to adopt new technologies when they streamline processes, accelerate decision-making, and cut costs.
Are we perhaps talking about the wrong topics to the wrong people when we pitch rich interactive content to junior marketing manager? What would happen if we were to get the marketing director, the managing director, the finance director, and the sales director in a room together and promised more profits faster?
The real stumbling blocks for clients have nothing to do with conservatism. According to strategic powerhouse McKinsey (www.mckinseyquarterly.com) the top three barriers to digital marketing entry are:
1- Lack of metrics to
measure impact
2- Insufficient resources to manage internally
3- Difficulty in convincing top management
If it looks like a business waiting to happen, that's because it is.
Experienced services suppliers in the communication industry have access to top management and have the experience to build cases based on their motivations: increasing sales and profitability.
Marcom suppliers already are in the business of compensating for clients' lack of internal resources: it is not a long leap to transfer this expertise to servicing their entry into digital marketing or improving it.
As to metrics, the same reasoning applies: there are research firms and media specialists. Now, we need to integrate those disciplines into digital marketing impact measurement standards. One hint: counting hits is not the answer. Exposing ourselves to accountability for increased profitability is.
Ladies and Gentlemen: in 2011, the web will overtake television globally in terms of time spent using by consumers (McKinsey again). Globally means us.
Add to that the low cost, interactivity, and flexibility of the web and you get a strong signal that marketing budgets will be migrating on line very soon and forever.
Ukraine is Different
No it is not because it does not exist in the digital world.
There is no working definition of a country for the internet: the concept of closed territories cannot be implemented without defeating the core purpose of the network, as proven by China.
Countries are useful abstractions for people who govern other useful abstractions such as currencies, borders and national interests. In the same way, imaginary numbers are useful in mathematics but you cannot count beans with them.
Real people live in homes, offices, streets, towns and cities.
What is different in Ukraine is the business model of a core player: the carrier. The typical telco or ISP operating in Ukraine keeps chasing kopecks today rather than hundreds of dollars tomorrow.
As a result, we do not have a lot of the free WiFi hotspots, high bandwidth at fixed monthly rates, or decent support for all-in-one devices such as the iPhone, that we find in cities elsewhere. Those would require investments, a dirty word.
But it will change very quickly: one telco has the vision and is hotly pursuing it, providing unlimited broadband at very low cost and WiFi everything and everywhere for less than a dollar per gigabyte. The identity of these visionaries may shock you: the old Ukrtelecom bureaucracy and their OHO! sub-brand.
Oho sells unlimited internet access at speeds up to 8Mbit/s (enough to run a business) for less than $35 per month. A very decent 256kbit/s (twenty times what I had when I started surfing) costs less than $8.00 a month. Oho uses telephone lines and there are 68 million of those in Ukraine. In Kyiv, Oho also sets up ten new WiFi hotspots a month and they are not stopping.
This dictates that all other carriers will have to open up, improve their offer, and simplify their tariff plans. To do so, they need to put their cost-accountants back into their cages and start doing some real cost/benefit ratio analyses.
If you remember how mobiles exploded from next to nothing in 2000 to "everyone has at least two" in only ten years, assume the same for other digital channels but give it two years.
The agenda is clear: we have a few months to leverage our expertise in traditional media so we participate in this new service business.
The next section proposes a few ideas on how it could be done.
II - The Complete Genius' Guide to Digital Marketing
I am writing this for people I know to be highly-educated, successful, competent, and creative. You probably have experience in digital marketing. Or at least have implemented a few experiments. On your shelves, the awards you won are outweighed only by the business books you read.
So why are we all so frustrated by the fact that somehow, there still has to be a real breakthrough with on line channels (especially in terms of client satisfaction)? I do not know the answer but I have a subset of answers. They may spark something...
Digital Channels are Im-Media
As in "immediate". The cycle "from plan to brief to concept to production to consumer to results" shortens by several orders of magnitude as im-media overtake television. Coping with it requires having a lot less people in the loop, everyone a decision-maker, productive specialists all, and a top-level understanding that you never "finish" anything: you just refine or replace it.
User expectations also are immediate: when they click, things must happen now! Yesterday if they are paying for it. God help marketers who do not deliver a little bit faster than promised: they get massacred by consumer feedback on their own web sites. Users are taking over!
To back the above: the fastest-growing on line sites host user-aggregated content. Blogging, Facebook, MySpace, LinkedIn, Twitter are the shining examples in social and professional networking.
Agreed, social networking has limited demographics (teens) and a short half-life. But what about campaigns created by users? Judson Laipply is a comedian who uploaded a very funny low-budget video to a web site three years ago. By now, it has been seen by 127 million people. The web site is YouTube. Compare with the billion-dollar TV broadcast of Super Bowl XLIII: it had 98 million viewers.
A word of caution about social and professional networking, starting with a quote on the topic from the corporate blog of IT giant Hewlett-Packard:
"Essentially, you can help get your message out to a global audience, without ever leaving your desk."
A dream come true! Sitting on top of the world and puppet-mastering a global audience. But when everyone else does it, I hope for your sake that you are selling desks or giant IT firms. To HP's credit, they put the word "help" in there.
Beware the media selling the media. What you want out of your digital investments is not endless feedback loops but real people doing real things. Immediately.
Digital marketing is not TV
I remember when television was new. Every fifteen minutes, a dark bronze voice would howl "We now interrupt this programme to present a word from our sponsors". Cut to business suit sitting at desk reading a script, bravely looking the camera in the eye while a choir sings the virtues of Hellmann's Real Mayonnaise behind his back.
They were producing radio advertising and showing the world how it's done!
The same is happening with digital marketing. Most of what we see is either brochureware: written and designed for a printing press; or TV simulation. As to banner ads, they are a bit of both: outdoor advertising with sound and animation thrown in to make them more intrusive. Synonyms for "intrusive" are: hindrance, interfering, interruptive, and "in the way" (Roget's Thesaurus).
One of the keys to understanding how to plan and create a digital campaign is to keep in mind that it involves not two but three senses: touch is as much a part of the user's consumption of the media as sight and hearing. To a certain extent, you can make them look and listen but there is no way you can force them to touch a screen, click a mouse or press keys.
The message has to appeal to the user's desire to do something with the media.
Another way the web is not TV is very disturbing: it is next to impossible to convince a client to pay serious money for web advertising. Clients often argue that they can trade banner space on their web site for banner space on other web sites that are part of their business ecosystem.
As to producing the creative, "Come on: my kid is good with that computer stuff and could have done this at home in two hours. And you want a thousand dollars for it?!?"
It will not change, no matter how many times they are told that whatever they get for free is worth what they paid (or less).
Personally, I take a different tack these days. I ask clients how much incremental profits they are getting from their banner campaigns. A rhetorical question because I know the answer: clients do not know, except for those who know that the number tends to zero.
Banners were invented when they were the best thing you could do on line. Today, doing a banner campaign is the same thing as showing a paper storyboard on TV.
Server-side customised applications are the way to market on line. Please read on, it is coming up. But before, just one more pet peeve.
Push will never work
Another legacy habit from television is the hard-sell approach. "Just hammer our message at the consumer over and over again until they buy the whole inventory in a desperate attempt to make us shut up!"
On line, this turned into such daily delights as spam, flash intruders, pop-ups, pop-unders, and cascading sites opening seventeen windows (preferably adult sites when my daughter and I are looking for a cinema showing Disney's "Cinderella").
I was so annoyed at the "repeat and conquer" launch of Vista that I emailed every Microsoft address I found "When I want a richer, safer experience, I buy condoms that glow in the dark. When I want a new operating system, I will let you know. Please forward up to your manager."
It was forwarded and I received a lot of sympathetic and funny responses. My second-best viral campaign to date.
My rather strong claim that push marketing does not work on line is backed by two observable facts.
First, users now have access to excellent free software to block it on the web (and the same is appearing on mobiles).
Second, any person smart enough to use a digital communication device was born with very powerful anti-push software: free will.
And they exercise it by not clicking, typing, or petting the touch-screen.
It is much more effective to make the message a privilege.
This can be as simple as a subscription to a newsletter or as complex as an interactive treasure hunt involving several teams of consumers competing for branded prizes over the web, GSM, GPS navigation or ad hoc WiFi networks.
The best insight I have to offer on effective digital marketing is asking:
Is the message, in itself, a valuable service that users would be willing to buy if it were not free?
The above question is the most important sentence in this document.
Meet your new creative director:
She has an MS in software engineering.
Successful digital marketers do not paste messages on exiting platforms. They use custom applications that deliver on the brief.
Certainly, you can launch a new anti-wrinkle cream with an animation that fast-forwards a model getting a face lift over two weeks. Congratulations: you have a TV simulator.
Put a slider in there so the user can go back and forth in time and you have a DVD-player emulator.
But if you put a booth at Brocard that digitises the shopper's face and allows her to see herself getting ten years younger in real time as she moves in front of your magic mirror, you will sell her a lot of cream. And she will tell all her friends. (Hint: flip the image left-right, just like her own mirror does.)
Competitors will hate you for it (always a good sign) because they will find out it takes six months to one year to code this application. The end of copycats!
Developing applications is half science, half art, and half voodoo. This is why you need a software engineer: they know what Agile, domain, requirement analysis, implementation, verification, and maintenance mean... Copywriters do not. And software engineers are as "creative": you may have to train yours to wear clothes at the office.
Ten useful tips about developing custom applications:
1- You can build from
blocks freely-available in open source software
repositories
2- Keep the rights to the source code and re-engineer as needed
3- License your successes to other communicators
4- If you need it three months from now, start three months ago: it
always takes twice the time estimated
5- Same for the budget: take the quote and multiply by two, you will
never be disappointed
6- The more you can tell about how your application must behave, the
faster and cheaper it will go live
7- Concept in-house, development outsourced. You do not need to buy a
symphonic orchestra to record a ringtone
8- There is no such thing as too many demos
9- Pay for deliveries, never for time
10- Above all, think small in a big
way: a bunch of small programs that
do one useful thing really well is worth a hundred times the same
weight in bloatware. Your consumer is not building an airport, he is
shopping for flowers.
Urgent: a revolution in the client services department
I market a custom application that can handle 95% of routine communications between marketing consultancies, advertising agencies, or PR firms and their clients. It also works really well for media owners and their advertising clients.
She (it looks and sounds human) answers the telephone, responds to emails, chats on your web site with clients, and writes accurate contact reports (on time).
There are also things it cannot do: go home at night, call in sick, talk to recruiters, forget to send documents, and spill secrets to strangers in bars...
I am willing to bet you the cost of installing it that it will speed up your work and increase client satisfaction. Do not take me up on this bet: you will lose.
Where would that leave the armies of account services people who think they run the business? I have some career management advice for them, all based on doing something more profitable than having great relationships:
1- Learn everything about
statistics and how to extract information
from data. Become fluent in SPSS and visualisation tools. Or at least
Excel. Be your employer's expert at analysing numbers and translating
them into human insights. Be intuitive and inventive about what kind of
data should be sourced and in what way. Become a mathematician who can
paint.
2- Study technology and how normal people use it. Find out about corporate blogging, Web 2.0, social networking, PHP forums, front and back ends, data hygiene, XML, RSS feeds, peer to peer, CRM... Learn how much these things cost and what they bring back. A year from now, you will have to be the translator between your client and the creative director (who is a software engineer.) But why stop there? Become the first person at the firm who can read a brief and say "Oh! This begs for [insert technology here] because [insert return on investment here]."
3- Start learning your client's business. Really this time, not just from the perspective of your interlocutor in the sales or marketing department. Buy shares in your client's firm, enough of them to make you nervous. Then read their newsletters, quarterly and annual reports (on line). Extrapolate: what should my client do to increase the value of my shares? Stop making people happy and start making owners richer.
If you do any of the above, you will be rewarded with fountains of diamonds. Why? Because this advice is about providing impact metrics, being the resource your client does not have internally, and becoming an ace at persuading top management: McKinsey's top three barriers (see above). You will be the kind of person your employer will be promoting (or recruiting) next year.
Conclusion
I wanted to brush on the themes that I believe are most closely related to adopting efficiently: the real barriers to entry, how technology changes behaviour, and what kind of new actors are needed on the stage.
There can never be a real conclusion to a discussion of digital marketing. It moves much too fast for anyone to follow. And the field is already too wide, even if it were to freeze, to cover in anything less than a very large encyclopaedia.
For example, I am quite aware that I completely ignored revolutionary topics such as digital publishing, skype, mission-driven communities, e-money, liquid web design... the list is infinite and growing.
This conclusion will have to survive on some discoveries my associates and I made in our practice. Specifically, what kinds of business we found, as well as how and where we are finding more:
1- Last In, First Out.
Kodak used to stand for photography but resisted
digital imaging as long as it could. Motorola defended its pager
business against wind and tide, making Nokia the mobile market leader.
Our successful clients rarely enter first but never last
2- Our bread and butter
used to be rebuilding large web sites.
Typically, our clients called us because users no longer could find
anything... With time, their well-structured sites had turned into
spaghetti.
3- Now, we do architecture
and interior decoration, contracting
cost-effective coding firms to do the bricklaying.
4- Counting hits and
click-through rates got us slaps on the backs.
Technobabble such as "six-sigma-closed-loops-marketing-dashboards" got
us wise head nods and warm handshakes. Measuring return on investment
for each campaign in each channel gets us repeat business.
5- We own a creative
boutique that delivers on client briefs across all
media, traditional or digital. Not because we want it but because we
need it: clients demand integrated campaigns and most creatives are
either/or. A surprise came while recruiting: puppies don't get it. Our
youngest associate is 44.
6- Our fastest-growing
markets are the Middle-East, North Africa and
Eastern Europe.
7- In those markets, our
clients are FMCGs, telcos,
retailers, real estate promoters, energy suppliers and financial
institutions. They are bypassing the slowdown in the economy by
marketing more efficiently.
8- Consumers are often
ahead of our clients (who do not have time to
surf). We often kick-start projects by looking at dead-ends: paths the
user wants but do not exist on the client side.
9- Half our new business
comes from unsolicited recommendations. Our
own marketing campaign is simple but effective: we publish white papers
about digital marketing.
10- Creating custom
applications is now our fastest-growing business and
the most profitable. It is also our client's most profitable use of
digital media.
Contact Information
If you have questions, comments or suggestions, we would like hearing from you.
Francois Demers
Managing Partner
DEMERS Strategic Brand Planning
francois@demers.in.ua
Skype: francois.demers.in.ua
(c) Copyright, Francois Demers 2009. You may reproduce and distribute this document as you see fit, provided it remains intact and the copyright notice and contact information are included.