Archive for the 'Digital Strategy' Category

CMO insights from IBM’s Global C-suite Study

April 28, 2014

IBM-Infographic-2014

For more than a decade, IBM has built upon research to produce its C-suite Studies series, one of the largest collections of C-level executive insights. Its latest research Stepping Up to the Challenge: CMO Insights from the Global C-Suite Study focuses on how CMOs “are helping their enterprises become more ‘customer-activated.’”

IBM Institute for Business Value found that employing a revenue-generating, customer-centric strategy can stem from digital marketing capabilities. But despite digital being a current area of focus for CMOs, it’s a world many still struggle with. Specifically, less than 20% of CMOs interviewed for the study “have integrated their company’s interactions with customers across different channels, installed analytical programs to mine customer data and created digitally enabled supply changes to respond rapidly to changes in customer demand….” Such CMOs are segmented as “Digital Pacesetters” in the report.

The issue isn’t that the other +80% are fire-walling technology, but rather they grapple with maneuvering through the explosion of data, and tethering digital media to bottom line numbers. As one CMO (anon.) in the study explains, “We know what we want to do. Our biggest challenge is creating the data infrastructure.”

This translates into potential missed opportunities. IBM Institute for Business Value reports, “There’s a close link between the degree of digital acumen CMOs display and the financial performance of the enterprises for which they work.” The research revealed that many CMOs have de-prioritized monetizing social media. They are “presumably finding it too difficult or see social mainly as a tool for building awareness and forging connections.”

While CMOs are becoming a stronger force when it comes to influencing CEOs on strategy, second only to CFOs, it’s the CMOs’ relationships with Chief Innovation Officers that generate results. IBM Institute for Business Value reports that businesses are 76% more likely to outperform in terms of revenues and profitability when CMOs and CIOs effectively work together.

According to the study, analytics are top priority for CIOs. IBM Institute for Business Value suggests partnering with CIOs to create an infrastructure for scalable cognitive analytics that produce actionable customer insights. It cautions not to be “all things to all people,” but rather concentrate analytics on those customer lifecycle phases that will be of utmost importance to your business in the next few years.

IBM Analytics InvestmentDigital Pacesetters, notes IBM Institute for Business Value, are “actively investing in the later phases of the customer lifecycle, where digital channels make the biggest difference.” While traditional phases end with the transaction, Pacesetters look at the bigger picture – focusing resources on long-term relationships and cross-channel experiences to turn customers into loyalists and collaborators and encouraging them to share these experiences. Such companies, per the study, “are 59 percent more likely to be outperformers.”

Download the complete study to learn more about IBM’s findings and strategizing digital.

BY ALLIE ABODEELY

Warby Parker: Oversharing as a Business Strategy

April 2, 2014

Neil Blumenthal and his business partners – David Gilboa, Andrew Hunt, and Jeffrey Raider – believed the eyewear industry wasn’t responding to customer needs and found an innovative solution to meet those needs. Blumenthal, who recently spoke at the BRITE ’14 conference, explained, “[We] didn’t like the process of buying glasses. . . [or] that glasses cost as much as an iPhone.” As a result, they founded Warby Parker, a company with “a lofty objective: to create boutique-quality, classically crafted eyewear at a revolutionary price point.”

Warby Parker effectively disrupted the eyewear industry in two ways: First, by using a direct, e-commerce model -cutting out the middle man- and by building a new brand –thus not having to pay licensing fees-, they significantly lowered the price of stylish eyewear; their frames, with premium lenses included, start at $95, that’s 25% of the market price. And second, by creating their “home try-on program,” sending customers, free of charge, a test package of frames they select to try on at home before they commit to buy. As a spin-off benefit, the home try-on experience is a shared customer experience, inherently accessible to family, friends, and even co-workers. The program, then, turned in to a marketing tool itself.

Blumenthal described Warby Parker as a lifestyle brand that offers value and service with a social mission at its core. With every pair of glasses purchased, Warby Parker gives a pair of glasses to someone in need. “Even at $95, there are still about a billion people in the planet that don’t have access to glasses and we think that that’s just crazy,” he said. At the end of each month, the Warby Parker team tally up the number of glasses sold and makes a financial contribution to Vision Spring; an organization that uses glasses to create jobs, making a more sustainable impact. In terms of their own business, Blumenthal believes that having a social mission helps increase customer loyalty and referrals, but does not drive the decision of making the first purchase.

According to Blumenthal, what has helped build strong relationships with customers and ultimately increase sales is a culture of transparency. “The more vulnerable we are, the more that we put ourselves out there, the deeper those relationships and the more valuable they become from an economic standpoint,” he added. In just four years, Warby Parker has sold over 500,000 frames and has grown from an apartment-based startup in Philadelphia, to a 350-employee business with a flagship store in SoHo.

“The public and your customers [are] participating more and near dictating what your brand is…you need to give people the tools to have it the way you want them to have it,” Blumenthal explained. Warby Parker focuses on creating experiences that are meant to spark conversations both online and offline. “It’s all about customer experience and constant innovation.”

When asked about a seemingly counter-intuitive expansion into the realm of brick-and-mortar stores – Warby Parker now has stores in New York, LA, and Boston, and has showrooms within boutiques in five additional states- Blumenthal explained, “[The] medium doesn’t matter. It’s the experience that matters and we need to design those experiences [holistically] from the moment they hear about the brand.”

Sharing is a fundamental element of the Warby Parker strategy – internally with staff and externally with consumers. As the majority of Warby Parker employees are millennials who want instant feedback on their performance, the leadership team has instituted monthly informal reviews and quarterly 360° reviews.

Moreover, as Ross Crooks explains in Forbes, “Business is becoming increasingly personal…; we crave more personal connection in a web-based world.” Customers want to relate to the people behind the brands they support, they want to know “that employees are people they might hang out with.” The Warby Parker team constantly keeps their fans abreast of “what [Warby Parker is] doing, how and why”, which, Blumenthal says “pays in spades.” According to a recent Mintel study, millennials are more likely to overshare than their Baby Boomer parents.

Warby Parker’s annual report is a perfect example of how the company creatively engages stakeholders. The uniWarby Parker 2013 Annual Reportque feeling of its annual report has proved to be a successful marketing tool, leading to the highest sales days and traffic after releasing it each year and gaining free publicity for the brand; with fans sharing the report in social media, and getting mentions in press outlets such as Forbes, AdAge, Bloomberg BusinessWeek and Business Insider. This year’s infographic annual report is laid out as an illustrated calendar with an update for each day of the year, is described by Business Insider as “a shareable page of organized chaos inspired by internet culture.” One tidbit of transparency it shares in this year’s report is the fact that half the inventory of their new collection was delivered to the wrong address.

In today’s world, Blumenthal said, “brands are able to rise faster than ever before, but they’re also able to collapse faster than ever before.” Warby Parker has found that the best way to maintain momentum is by strengthening its connections with its customers through the sharing of relevant, personal, and entertaining content and the creation of experiences, regardless of the platform.

Watch Neil Blumenthal’s BRITE ’14 talk to learn more about how Warby Parker incorporates innovation into customer experience.

BY GABRIELA TORRES PATIÑO, EDITED BY ALLIE ABODEELY

Kate Spade New York: Innovating the 360° Experience

February 12, 2014

The Kate Spade signature experience is as bold and colorful as its brand. Its 2013 strategy proved to be ahead of the curve, offering an amalgamation of consumer interactions across all touchpoints for a unified 360° experience.

Last summer, Kate Spade New York created a unique way to bridge digital with the brick and mortar world, transforming “window shopping” from a figurative expression into a literal action.

For one month in New York City, four of its Kate Spade Saturday store locations turned their window displays into a 24/7 interactive adventure. It enabled shoppers to purchase that “must-have” piece in the window, from the window, via touchscreens. And shoppers could schedule that item to be delivered within one hour anywhere in the City (e.g. a last minute present delivered to a party you have to miss, that anniversary gift you forgot to buy for your wife… again).

Mary Beech, Senior Vice President & Chief Marketing Officer, and upcoming BRITE ’14 speaker, refers to their decorative windows as “a little piece of theater.” “Our store windows are moments of whimsical storytelling that express our core values in every venue,” she explained at The Hub Live 2013 conference. “[T]here’s a sales goal related to these. But we have fun doing it.”

In true Kate Spade New York innovative style, the luxury retailer ran the first shoppable online video banner during the 2013 holiday season. See an item you like in the digital ad? Simply click and purchase. “The technology provided an immediate, seamless, shoppable element that enhanced the experience, rather than pulling you out of it,” Beech explains in an interview with Design Taxi.

Kate Spade Shoppable Banner Ad

Efforts are paying off. Kate Spade New York reported a 30% increase in comparable store sales for the 2013 fourth quarter, and a surge in last year’s stock price. Further, parent company Fifth & Pacific will be renamed to Kate Spade & Co. to focus singularly on the Kate Spade brand. The company recently trimmed 37 of its 40 brands and is soon to separate from Juicy Couture and Lucky Brand.

Beech notes that they’ve carefully identified complementary experiences to carry through different social media channels. Facebook is for customers seeking sales, product information, store openings, etc. Twitter offers the voice of the Kate Spade woman tweeting about local events and other delightful discoveries. Instagram paints a picture her story and NYC lifestyle through the use of images.

Kate Spade New York is fast becoming a trailblazer in the marketplace, developing unique ways to engage and even entertain its biggest and brightest fans by merging new technology with in-person interactions.

Join Beech at the BRITE ’14 conference (March 3-4, NYC) to learn more about the creative ways in which they’re keeping the brand both fashion and marketing-forward.

BY ALLIE ABODEELY

The Hunt for ROI from Social Media: A BRITE ’14 Panel

January 16, 2014

SocialROI_BRITE14panelEveryone is on the hunt to figure out how social media can best impact a firm’s revenue. So, we are pleased to tackle this topic at BRITE ’14 with a dynamic panel of business leaders trying to crack the nut on how to spur social sharing and generate business revenue from it, which will include: the CEO of Bloomberg Media, the Head of Performance Marketing at Facebook, the President of BuzzFeed, and the SVP of Strategy and Development at The New York Times.

Part of the challenge is even defining what should go into any equation to evaluate “social ROI.” Within social media there is a three-way split between paid, earned, and owned. Social messages then interact with all the other touchpoints connecting a brand and its consumers, from TV ads to in-store displays. Plus, one has to consider category and business model differences—will the same process work as well for a low-involvement CPG product as compared to selling an automobile. Finally, there is the analytics challenge to move beyond “last click attribution” in order to more accurately understand and credit social media’s influence on the consumer’s path to purchase.

The Facebook ecosystem is obviously a key player here, and it is constantly adapting itself to find the best mix of paid/owned/earned for its brand advertisers. Our panelist Dhiraj Kumar ‘07, Facebook’s Head of Global Performance Marketing, sees clear evidence that Facebook’s move to add native ad units (the sponsored posts in News Feeds) have made a positive impact. Early studies have shown significant gains in click-through rates and drops in cost per click and cost per acquisition, leading to ROI increases when compared against sidebar ads. Adobe’s Social Intelligence Report (.pdf of the Q3 2013 report) provides additional nice data on paid/earned/owned effects on Facebook’s platform, and most recently found that the ROI from paid Facebook ads is up 58% year-over-year.

The recently appointed CEO of Bloomberg Media, Justin B. Smith, previously helped lead The Atlantic into the digital world. In the realm of generating profit from social media, he notably spurred the creation of two sub-brands, Quartz and The Atlantic Wire, that were designed to grow The Atlantic brand by avoiding any pay walls, including curated content, and allowing articles to be easily spread via social media. This past summer, 10 months after its launch, Quartz had millions of unique viewers and was generating half of its traffic through social sources. Its strong social distribution allowed the site to operate with a branded content model, and has been a leader in such revenue generation.

Last week we profiled  a third panelist, Jon Steinberg ‘03, President of BuzzFeed, whose company uses social sharing to build its brand and generate revenue from branded content. BuzzFeed has taken such an analytics-driven approach to social media, that they do A/B tests to optimize the size of the Facebook button on its website.

Our fourth panelist, William Bardeen ’04 is the SVP of Strategy and Development at The New York Times, which has also just joined the world of native advertising and will work with marketers to best understand the social flow of their branded content. Bardeen knows that the New York Times faces competitive challenges from the likes of upstart media companies like BuzzFeed as well as from Twitter, which is becoming the go to place for breaking news. Given that, The Times and other traditional news organizations are working hard to strike the balance between being a strong player in the social world—to hold on to readers and ad revenue—while maintaining a consistent level of well-researched reporting standards. 

REGISTER NOW for BRITE ’14 (March 3-4) and listen to this dynamic panel of business leaders.

BY MATTHEW QUINT

How Branded Content is Feeding the Staff of BuzzFeed

January 6, 2014

Jon SteinbergOn all sorts of media sites, brands now seek our attention by sponsoring content rather than placing a banner ad. BuzzFeed is a pioneer of this marketing approach and attracts dozens of leading brands to mingle their content among its own articles.  The company built its brand by taking an analytics approach to social sharing, turning the success of the “listicle” format (here’s a recent favorite of ours) into a branded content business model. At BRITE ’14, BuzzFeed President Jon Steinberg will share how the company accomplished this and what it is doing to continually build and expand its brand.

All of BuzzFeed’s revenue comes from social content marketing (aka branded content, native advertising, sponsored posts,. . . ok, we will stop here). As Steinberg notes in a Sparksheet interview, “Advertorials and word-of-mouth have been a force in marketing and research since the 1950s. We’re just doing that online. It’s going back to good advertising and getting away from banners, which were always a terrible advertising product.”

BuzzFeed helped rejuvenate and adapt this form of advertising in which media companies – including players like The Atlantic and Forbes – now act as advisers, and even content creators, for the brand and its agency. This summer, BuzzFeed began piloting a new accreditation course, the Social Storytelling Creator Program, aimed at training agencies whose clients are sponsoring stories on BuzzFeed. “When you’re innovating a new platform like we are, you have to offer education,” explains Steinberg.

Even with a wall separating editorial and sponsored content staffs, however, this “ads that look like articles” technique has its critics. Take, for example, Andrew Sullivan who questioned its ethics by stating, “It’s more like product placement in a movie – except movies are not journalism.” In fact, Sullivan’s specific analysis and critique of BuzzFeed actually helped spur the company to more clearly and consistently identify all its sponsored articles.

Despite such criticism, with the revenue needs of the media and the interest of brands to develop engaging content, it is clear that sponsored articles will multiply. The evidence of how well this form of marketing “works” is still being compiled, however, but early indications are encouraging for brands. For example, a study conducted last year by IPG and Forbes (.pdf) found that branded content stories were considerably more effective than pure display ads at driving such measures as brand recall and brand favorability.

From a content standpoint, companies must find the most effective ways for sponsored articles to meet the needs of both the brand and the reader. At BuzzFeed, most brand campaigns include at least 5-10 unique pieces of content designed to integrate tone and message for the brand. “The challenge is if you unbalance yourself in either direction,” Steinberg acknowledges. “If it’s so fun and interesting but doesn’t convey a brand attribute, you have an issue. If it’s only about why a product is awesome, with no give or interest, then you’ve similarly erred.”

REGISTER NOW for BRITE ’14 and catch Jon Steinberg talk about how sponsored content, analytics, and even hard news are shaping the future of BuzzFeed.

By MATTHEW QUINT

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