Spending on digital channels continues to rise. At the end of 2016, global spending on digital advertising was set to top $180 billion, according to Magna Global, which projects double-digit growth through 2020. Unless advertisers improve their performance, they will need to outsource cam- paign development and execution, for which they will pay a heavy price in terms of consumer engagement. To add the most value, agencies need to improve their own capabilities, but the bigger opportunity lies in building long-term partnerships with their clients based on the development of mutual skills.
The survey, report, indicates that agencies see themselves in better shape for digital marketing. About two-thirds of agency respondents ranked their organization’s digital skills at 65 or higher, far from a best-practice 100, and there were some noticeable weaknesses in the mobile and video channels, among other areas.
Perhaps more importantly, the differences between advertisers and agencies in certain key areas, such as digital targeting and mobile and video, are considerably wider than in the overall scores.
While many companies are struggling to develop digital content and employ social media, digital marketing is already moving toward new capabilities. The most significant may be personalization, marketing to individual consumers at scale.
It’s particularly surprising that advertisers and agencies continue to give them- selves low scores on testing (50 and 60, respectively), since testing, learning, and ad- justing the campaign approach or design are among the most powerful capabilities enabled by digital technologies.
The survey indicated a lack of understanding at senior levels of marketing management about the strength of companies’ digital capabilities. Across all three phases of the marketing function—planning, executing, and measuring—senior managers consistently rated their departments’ capabilities, higher, and significantly higher, than junior executives did. For example, marketing and brand strategy capabilities were assigned a rating of 66 by the most senior managers, compared with 58 by junior managers, while digital-content capabilities were rated 63 versus 55, respectively, and metrics and measurement were rated 70 versus 57. It would appear that the ground-level view, if not more realistic, is at least more skeptical. It also bears remembering that junior executives are likely to be younger and, because they grew up in a digital world, more knowledgeable and sophisticated about how digital marketing works.
Measurement is a continuing area of weakness.
Marketers that are not actively involved in the test-learn-adapt process lose touch with both their campaigns and their digital consumers. They don’t know whether their strategies are being faithfully executed or how their budgets are being spent. They are hard-pressed to explain how or why success—or failure—occurred. And perhaps most critically, they don’t learn how to access and use the plethora of digital data that campaigns generate—the data that makes more advanced techniques, such as personalized outreach, possible.
Advertisers face another skills-related challenge. Unless they improve their performance and their learning and development, the digital divide is set to widen.