Q&A with Rick Brook, Senior Vice President, Global Clients Operations, WPP Group
An industry thought leader offers his unique perspective on optimizing cost structures and ROI models for digital marketing.
Q: Can you talk about the main financial challenges faced by digital marketers today?
A: At a macro level, marketers face much greater cost pressures than ever before. Budgets are smaller, but the urgency to produce results is higher. That fundamental challenge shapes all the others.
The truth is, many companies are still feeling their way ahead on both the value and cost elements for digital marketing. There is a lack of confidence because few marketers know what is appropriate to spend. They don’t know what kind of volume they need or what digital production should cost. This is also why procurement executives struggle to accurately cost digital marketing programs.
Q: Why is there such uncertainty?
A: Because the digital model represents a profound change for the industry. In the past, everyone knew exactly how expensive a TV commercial shoot would be. You had line items for the set, filming, editing and casting. Then you bought the media you wanted. You paid the bill and you were done. Similarly, it is very easy to grasp the time and resource requirements to produce and place a print ad in a limited number of publications.
Digital, on the other hand, is a less tangible, less visible medium. It is almost impossible to visualize what the production and distribution of 1,000 banners actually entails, when they are spread across huge ad networks and could be served up to potentially millions of pages.
Another element is the timing. With digital, companies need ongoing plans for optimizing online ad campaigns, updating Web properties, managing email campaigns and e-newsletters, and the like. It’s not “one and done” production, like with the traditional channels of the past.
Q: What about the value side of the equation?
A: Companies also aren’t clear about what or how much to expect from their digital investments. We believe the value comes from taking strong brand stories and great creative concepts and driving them to market through highly efficient distribution, targeting and optimization capabilities. Quality is critical, too. World-renowned brands cannot afford to be compromised by sloppy online execution. The bottom line is that there is opportunity to both reduce costs and increase value.
Q: You mentioned procurement. What is procurement’s role in finding the right digital marketing models?
A: Certainly procurement has been more active in managing marketing budgets and agency relationships as budgets have tightened. Usually, procurement has not been very empathetic toward agencies or especially well educated about marketing as a discipline. When they are, I think they can contribute to a meaningful, value-oriented relationship. That’s when great things can happen.
But, this is not essentially a procurement issue. Lowering costs is important, but ultimately the goal is optimize results and quality within finite budgets. Again, marketers partner with the WPP team to become digital leaders and achieve branding excellence, not simply to produce 1,000 banners or launch microsites at the lowest possible cost. That said, many companies do not generate maximum ROI in digital marketing, because they lack strong, scalable production platforms to execute their programs.
Q: So what is the right approach to generate ROI, given the rapid and ongoing evolution of digital marketing?
A: Effective creative and efficient digital production – that really is the vision. And there is plenty of opportunity to apply it. On the digital production side, automated and mechanized processes for development, localization, campaign management and reporting can significantly reduce overhead costs, and simultaneously improve the speed and quality of execution.
There is also value in reusing creative concepts that work. While marketers may be hesitant to admit to reuse, the digital world makes it easier to know and quantify which concepts are most effective. To fully reap the value and to drive down the cost of campaigns, you need a future roadmap that defines how effective campaigns and messages can be repurposed digitally. Then, you need a strong digital production platform that allows you to efficiently and repeatedly drive those concepts through the right formats and channels.