Digital marketing: everybody is talking aboutdigital marketing.Everybody is trying to do digital marketing.Today we are speaking about the state of theart in digital marketing, how to do at scale,and how to do it right.I'm Michael Krigsman, an industry analystand the host of CxO Talk.
You are watching Episode #256.I would like to say thank you to Livestreamfor being a great video streaming partnerfor us.If you go to Livestream.com/CxOTalk, theywill give you a discount on their plans.Right now there is a tweet chat going on.Go to Twitter using the hashtag #CxOTalk andjoin us.Our guest today is a very interesting man.He's been a guest on CxOTalk in the past.He is Robert Tas, who leads the digital marketingpractice at McKinsey.Hey, Robert.How are you?Thanks for being here.Hey, Michael.Great to see you.I'm doing well.Thank you.Thanks for having me.Congratulations on the great success thatyou guys are doing.Hey, thank you so much, Robert.Well, you know it's the guests that make thisshow.Robert, you lead the digital marketing practiceat McKinsey.What does that mean and what do you do?Great.I'm one of the leaders of our digital marketingpractice, and my work is really at the intersectionof marketing, technology, and analytics.
It's really putting those three things togetherto help companies drive growth through theirmarketing programs.I have a bunch of colleagues across our practicethat do all kinds of things.We actually have a really extensive set ofpractitioners at McKinsey.Our Digital McKinsey, in fact, has been growingat exponential rates and includes people thatdo design work, analytics, development, allkinds of digital work to help companies reallyget the most out of their digital programs.Well, I'm very excited to talk with you.You work with a lot of different clients fromvery large organizations who are doing sophisticatedthings with digital marketing and with dataand analytics.Maybe a good place to begin is, when you'reout there roaming the world providing advisoryservice and working with your clients, whatare some of the key digital marketing trendsor issues?What's really important to your clients?Good question.I think there's a lot of buzz out there, anda lot of people are trying to figure out anumber of things.I like to think of them in some categories.
• The first one that I look at and I heara lot of people talking about is personalization.I think the idea of not treating every customerthe same is really, really important in today'sworld.A lot of companies are trying to figure outhow to do that better.
• The second one is data.You talked about it a little bit in the beginningin your intro.Data, data, data: everyone is trying to figureout how to harness the volume of informationwe now have and actually put it into action.
• The third is design.I think this is one of the newer areas that'sgetting a lot of traction.Really understanding how to do user centricdesign and how do I make my experiences relevantto my customer base.
• The fourth that I like to talk about ismarketing technology, one of the biggest buzzwordsgoing there, but really understanding thecomponents of the martech stack, and CMOsare now becoming integrators.
• Then the fifth one, which is probablythe most evolving one, is this new conceptof the operating model, the speed at whichwe work.The reality of digital marketing today isthe tools we have.We can do things a lot faster than we've everdone before.I think CMOs are trying to figure out allfive of those things to really transform theirmarketing organizations.That's really interesting.I think you began with personalization.I think everybody knows, at a basic level,what personalization is.But when you think about it, what is yourframe of reference, what's really important,and how do we do it well?I appreciate the question because I thinkpeople think they know what it is.I'm going to start by saying what I don'tthink it is.The first thing [is] that people, when theytalk about personalization, often confuseit with targeting.Absolutely every client that I talk to andevery person in the industry, we all wantto do better targeting.I think personalization has a piece of that,but I think of personalization as really helpingmanage a customer through their journey.That could include advertising.That could include experiences, both physicaland digital.But it's really that end-to-end view of helpingthe client, the customer get through thatjourney in a thoughtful way.One of my favorite examples is when peopletease me about [how] I'm a big coffee guy,so I drink a lot of Starbucks.Everybody knows I use my mobile app to goget it every day.Everybody thinks that that's where my personalizationexample stops.The reality is, I do love the Starbucks app.But what I think the most impressive pieceof personalization that Starbucks does isthey put my name on the cup.What an amazing experience that is.Being able to tie my journey all the way throughwith that little name on it, it just makesthat whole experience work.I think companies need to figure out how todo build their own version of that for theircustomer.How do you delight them across that journey?That's where real personalization is.That's really interesting because, you'reright, when we talk about personalization,it's much easier to say, "Oh, well, we haveemails from this person and that person.We know that person is on Facebook, and we'regoing to send them an ad."
For almost everybody I talk with, that's personalization.That's extent of it.Yeah, it's interesting, and I've seen a lotof work on this where we have to stop thinkingabout that last conversion, that ad unit.
We have to start thinking of the customerjourney a lot more thoughtfully.We have to understand how to help the customernavigate.I feel like we're under clubbing in our nurtureprograms, in our upper funnel programs.We have sort of brand building at the highend, so we do a lot of that.Then we go right to an offer.The in between is something where I thinkthere's huge opportunity for brands to reallytake advantage of modern technology and takeadvantage of these ecosystems out there thatare providing amazing opportunities to helpconnect those dots.How do you do that?This means you actually have to understandthe customer.Targeting is easy, right?You get their email, and you send them anoffer.This is much more tricky.I don't know that I would say targeting isas easy as it sounds.I think your question is a good one becauseI think it actually lays the foundation [that]understanding measurement is a really importantbattleground area.My second point on my list was that insightspiece, and I think this has a lot of connotation.Number one, we have to move away from thislast click model.Today I see so many companies still in thatsilo of making decisions in one of their channels.They judge a campaign by a click, and that'show they deem success or not and are spendinglots of money to do that.We have to move away and understand how thecustomer buys.I came, as you know, from financial serviceswhere people are not buying a mortgage onthe last click, yet Google search does extremelywell for mortgage buyers because that's wherewe start our journey.Being able to, as you said, understand ourcustomer across the journey, mapping thoseout, and understanding how they work and expandingour measurement systems is really paramountto doing personalization and doing great modernmarketing.When you talk about that, that leads intothe insight piece, which you mentioned asthe next in your five steps or five components.Yeah.I think there's got to be a real culture changein the way we seek and use data.I think we've been in this culture of reporting,and we've got to be in this business of insights.
I want to see my clients really step up theirgame in terms of building out their data strategies,building out the number of data sources they'reusing, building out how they're connectingall those data sources, and really testingand learning their way in.There are no silver bullets.It's not one tool that you can buy.There's a combination of things that you haveto do to really understand what works foryour customers and your specific segment ofcustomers, and really being able to drivethat test and learn culture through your organization.Can you give us an example of this, of howdata, when used in the right way, can helpdrive a better understanding and insight ofthe customer?Sure.Of course.I think the one that comes to mind is a simplisticone, but one of my customers had run a programwhere the search team was about to cancela set of keywords that they were judging basedon its cost per acquisition value.Somebody went off and did a little bit ofanalysis to understand customers that werebuying through other journeys, and suddenlyrealized that people started with that searchterm, but fell off if they didn't get enoughproduct information.What was deduced out of that was that by connectingthe dots of how the customer's journey wasand changing some things in that landing page,the keywords were right.They were performing really well.It's the journey that needed to be optimized.I think that's a simplistic example, but onethat happens way too often.I think we must connect the way our customersbuy.We must structure our teams that way so thatthey're incented to connect those dots becausethe technologies are out there now where it'seasier to connect those pieces.I think there's a huge opportunity if we startthinking of that customer centric view andrun our marketing programs that way.How prevalent is it that companies are doingas you're describing, and what are the challengesthat companies face when trying to implementthis type of cultural shift?Yeah.Listen, I think the best in class marketersare leading the way in the use of data inthe way they approach their marketing programs.They're leading the way in testing and learning.They're leading the way with agile approachesto their marketing where they're constantlythriving for more information around the customerto be smarter about it.Like you said, there are challenges.The first one that comes to mind is the datasilos that exist in organizations, especiallylarger organizations.It's hard to connect all those customer touchpoints.The second piece is understanding who ownsthe customer experience and how is that managedand implemented across the board within myorganization.Often we have silos that create the upperbrand, the upper funnel team, the bottom funnelteam, the post customer experience team, andthings like that.We've got to figure out how to build our strategiesmore holistically.
The third bucket is, there's a lot of technology,a lot of legacy systems in these organizationsthat need to be cobbled together.You really need a diligent strategy to godo that.Then fourth, like you said, is you've gotto start thinking more from that last clickconversion campaign thinking to really enablingthe customer journey.How do you go about delivering that?How do you remove friction through that process?How do you get more data to enhance it andhelp the customer get what they want?Okay.We have now this more sophisticated senseof marketing and of personalization lookingat the customer as a whole.We have the data to give us that insight.But you also mentioned design.Where does that now fit into this picture?Yeah.It's a really interesting piece because thecreative guys have always been on either thead side or certain pieces of the journey.I think it's really important that we startgetting them involved into the entire journeyand understanding how to map those piecestogether.It's no longer enough for the marketer tosay, "I drove the traffic to the website andI did my job."You've got to be able to design those experiencesand have consistent experiences end-to-end.When I was in banking, for example, we hadamazing digital products that really deliveredthe customer value proposition and honestlymade the marketer's job easier.Really having that end-to-end experience allowsus to have significant impact, but I thinkyou have to be thoughtful about it.I see so many organizations that invest hundredsof millions of dollars in marketing and drivingpeople to a traffic page that suddenly isn'toptimized or has too many fields on it becauseit was written by somebody else in the organization,or it wasn't optimized in the same look andfeel.It's connecting those dots and using usercentric design to really understand the entireexperience and being able to leverage it.Okay.I see what you're talking about, about theend-to-end that involves not just the technologists,but the entire team, thinking about that customer,what is the journey, what are the touch points,and so forth.
We all have had horrible service experiences,right?What a difference those make than the advertisingside of getting to the product conversion.It's really critical because the amazing partin today's world [is] our customers have lotsof choice, right?The digital natives have set the bar aroundexperience and really being transparent andbeing consistent in how they navigate theircustomers through this.I think the more traditional companies haveto do a better job of connecting that end-to-endand using opportunities to engage their customersthrough service channels that are usuallyviewed as cost centers.We must change our mindset to how we engageour customers and at those most critical touchpoints.You also mentioned technology.Where does that fit into this broader picture?Well, Michael, technology in the martech worldis a big buzz right now.There's a lot of discussion.People immediately start to think about programmaticfrom an advertising perspective.If you really look at the LUMAscape of 35or 4,000 or infinite number of technologycompanies, there are a lot of different sliversof martech in the ecosystem that a CMO nowhas to think about.The number one point is, they have to havea strategy.They have to start really thinking about,what are the systems that they're going tomake their bets on?What are the systems that are going to yieldimpact to their business?Then how do I put them together?Do I do off the shelf?Do I do best of breed?Do I do a one vendor approach?[There are] lots of big decisions that theyneed to start really making strategically.It used to be outsourced, candidly.Many of these things were bundled into mediapurchases.Well, that world is changing really, reallyfast.CMOs have to own that martech and data stackand really harness the power of that to besuccessful today.Michael Krigsman:The team has got to includea variety of different skills.This is not a solo sport.Absolutely.As somebody who has been a CMO, the firsttwo people I want to go hire is the head ofmartech and the head of analytics.Those are my right and left, sitting nextto me, because they're the foundation of modernmarketing today.They're the ones that are going to feed allmy program people, all my strategists.If I get them executing well, that's my secretsauce.We hear about account-based marketing.Mm-hmm.It sounds like this is a kind of similar philosophywhere you're viewing holistically that customerand, therefore, viewing holistically the stepsthat you need in order to reach that customerand do the right thing.Michael, I hear a lot about account-basedand CRM.I believe that, in the consumer world, inthe B2B world, every impression can be addressable.What I mean by that is that I should be usingdata to influence every impression, everymessage that I deliver across all my channels.We now have the analytics and the capabilitiesto be able to impact every form of communication.We need to start thinking not just about advertising,but about engagement.The way we approach that is through the powerof that martech and data activation that Italk about and really being able to scalethat across organizations.For a company that is listening and wantsto do this, how do they make that shift toadopting this more sophisticated perspectivethat you're describing?Well, I think there are a couple things.One is, they have to get in the game and learnit.They have to get a seat at that table, understandit, and not rely on somebody else to do itfor them.The first thing, as I mentioned, is, I thinkthere are a lot of new, emerging roles inthe marketing suite.That martech person is a new role that hasto be there to drive data activation at scale,thinking about how they're sourcing data,thinking about who they're sourcing data from,thinking about how it's being integrated,thinking about how it's being activated acrossdifferent channels.The martech team is not about digital marketing,this little thing off to the side.Digital is the centerpiece to empower callcenters today, to empower retail branches,retail stores.The power of the data is unbelievable acrossthe entire customer experience.The CMOs need to build teams that can harnessthat and think of this as a strategic weaponto go after.It requires a strategic direction togetherwith the execution at multiple levels insidethe organization.Yes.This is where the industry is evolving.If you look at our ad tech category, todayit's charged like an advertisement.It's bought that way.That's kind of the history of it because CMOstypically haven't spent technology dollarsthat way.But that's changing where CMOs need to investin marketing data platforms that are harnessingthe power of all their first party and thirdparty data at a granular ID level and leveragingthat so they can test and learn their wayinto effectively spending their marketingdollars.That includes all marketing dollars, not justthe digital dollars, but impacting their televisionspend, their promotional spends across theentire funnel.There's a lot of rethinking.I want to remind everybody we're talking withRobert Tas, who is a leader in the McKinseydigital marketing practice.Right now there is a tweet chat going on usingthe hashtag #CxOTalk, and you can ask Robertquestions.It's a rare opportunity to ask someone likeRobert directly and get answers.Robert, we have a few questions from Twitter,some really good ones, actually.First, Shelly Lucas, @pisarose, is saying,"Designing an end-to-end CX strategy requires,"as you were saying, "collaboration among specialists."What recommendations do you have for companiesto meet this challenge?I just want to mention that Shelly Lucas isone of the best content marketers that I know.I don't know if she's still looking for aposition, but she was.And so if you're listening and you're interestedin somebody doing content marketing, go to@pisarose because Shelly Lucas is great.Anyway, Robert, how do you get these specialiststo work together?I think [of] a couple things, and I love theway the question was written.I think, first of all, you need to organizeyour teams around an outcome, around a specificeither segment [or] journey, something that'smeasurable that I can then assemble a cross-functionalteam against.I come back to testing and learning.We've got to go away from our press the campaignbutton and come back next year and do better.We've got to test and learn our way in.What's amazing in today's world is, one, thetechnology that gives us almost, if not, realtime feedback in some cases, but near realtime.We have the ability to change things really,really fast, and that's everything from copyand creative, delivery, placement, but evenexperiences.We can change forms.We can do all those things through iterationand be a lot more impactful, so creating theright cross-functional team.In some cases I've seen clients who have assembledteams that include a strategist, an HTML developer,an analytics person, a copywriter, [and] adesigner.
They're able to drive test and learn programsat incredible throughput.When I tell people it's ten times faster,ten times the number of tests that they'reprobably used to, people think I'm crazy becauseorganizations aren't typically set up thatway.But with the right structure, you can empowerthese people around a specific outcome todrive great impact.Talent management, therefore, and hiring becomesa critical component of this as well.Critical.Critical.We've got to hire them and then empower them.I think it's finding the right set of peoplewith the right outcomes that you're lookingfor to drive that, driving that.As an example, data people are really hardto find today because it takes a unique personto look at data, analyze it, and put it intoaction.We really need to push our thinking aroundthat.We need to push our marketing organizationacross the board to use these new technologiesand the capabilities of what's possible outthere.When you're talking about data as being criticalin this case, you're not just talking aboutdata scientists.You're talking about that knowledge flowingthrough the team.Exactly.Exactly.Data scientists are really critical piecesto putting data together, but I've got toenable my marketing team to use the data.I've got to enable my marketing team to beable to put it into action and hold themselvesaccountable to it so that I can see resultsand I can manage it.I need data scientists to help me figure outwhat I need to go do.I need my marketers to know what to go do.Then I need the system to give me feedbackin a really timely fashion so I can continueto iterate and drive impact around my business.Okay.We could talk about that feedback loop andspeed, but let's get another question fromTwitter because Gus Bekdash [@Gus_Bekdash]has been waiting.He has another really good question.He says, "Marketing went from generic to educationalto overwhelmingly informational & now to personalized."How do you strike the right balance of thesedifferent types of marketing and content?I think it's evolving, and I come back tothat testing and learning.I think it depends on the brand.It depends on the type of product it is.But I think it's really important that weunderstand our customer.We've got to get away from treating them allthe same.We've got to understand that people buy differently.We have to not judge them the same way.The way I buy a car and the way my wife wouldbuy a car is very different.Yet, we treat that Google search term thesame way.I think that's what's got to change in ourwhole marketing strategies is really understandingthe process that somebody goes through, thatdecision journey that we love to talk aboutat McKinsey, and really having a perspectiveon it and measuring ourselves against themto the appropriate outcomes.That means you're going to tailor differentthings for different people.You may have a content rich experience forone buyer, and you may just get to a pricingcalculator to another.I think it's really important that you understandwhat you're surgically focusing on.I think too often we try to cover everythingin one campaign."Oh, we'll reach all these segments.Oh, we'll reach all these types of buyers."We have the tools available now.We have to implement the strategies to executethis personalized approach.I have to say it's really a breath of freshair talking with you because so often youhear people; you hear conversations, especiallyfrom software vendors, about the tools."Well, we've got AI that will help you segmentdown to segments of one, pure personalization."But most of the time what they're really talkingabout is, we have tools that will help youtarget everybody and their brother and theirson and their dog.[Laughter] It's not strategic.It's interesting, Michael, because I spenta lot of time getting pulled in to do diagnostics,as martech is a hot word.One of the things that I'm seeing is thatcompanies have a lot of tools that are underutilized.They're not implemented properly.People aren't trained.They're not integrated.They're not kept up to speed with the latestversions.They have these Ferraris in the garage, butno one knows how to drive them.Listen.There's a lot of great tech coming, there'sa lot of amazing innovation, and I'm a hugeproponent of it, but we've got to start doingthe 101 and 201 stuff that is out there, that'sdoable, and could have impact today on yourbusiness.Everything that you're describing can be aprocess where you develop it incrementally.You're not talking about discarding everythingand just beginning with a blank sheet of paper.No.I think you're right.The pieces, there are some great buildingblocks is maybe the way to think about it.But I would issue a little bit of a challengeand say, "We've got to change the way we operate."When I talked about those five battlegroundarea, those are some really big areas thatCMOs have to attack with rigor.We have to change the way we operate.We have to change the way and the speed weoperate, the way we push ourselves to be accountable.I see us still doing the status quo way toomuch.
I still see companies that [say], "This iswhat our plan was last year.This is what we're going to do again."We really have to sharpen our pencils hereto drive impact and, I think, push our teamsto use these new technologies [and] to implementthese new practices with a lot more rigorthan we have.How do we do that?I think companies are at a loss.It sounds great, but getting from here tothere is just harder than it seems, especiallyin organizations where we're so siloed andour data is siloed.The mindset of working together is nice intheory, but I have to do my job.I don't know, Michael, that there's a lotof option not to do this.I think everyone who is going to be successfulin their category is going to get there andbe driven there, number one.Number two, I understand what you're saying.Change is hard for large companies.But I think there's a systematic way to changethe way we do this.Maybe it's starting with a pilot.Maybe it's starting with a specific customersegment that we're going to go and tackle.I think the key is you've got to start usingthese things and getting the value out ofthem.I'm amazed.Like I said, I see a lot of companies witha lot of cool cars in the garage, but they'renot getting the value out of them.They're not taking it all the way through.They buy some shiny thing and then they'reusing 10% of it.We've got to figure out how to harness thepower because, honestly, the digital ecosystemof players is rapidly changing.Your competitors are doing this.Best in class marketers are doing this.They're using extensive use of data to drivetheir business.They're using tools and testing and learningto drive impact in all major categories, fromretail to financial services, across the board.If I'm a CMO, I've got to be pushing my teamto do these things fast.The role then, it sounds like today the CMOis primarily, shall we say, an empatheticorchestrator.Empathy for the customer and orchestratingthe internal organization.Would that be right?I like that.I like that a lot, actually.
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