Digital Marketing Doesn’t Work!

I hear this a lot. You’ve probably said this to yourself or to your marketing team. I’m writing this piece because it occurred to me there are very few resources explaining this from the perspective of bosses a.k.a the non-marketing manager who holds the heavy responsibility of approving precious resources for digital marketing.

This piece is inspired by a recent encounter with a CEO of a top developer in Malaysia. What he asked me was this: “What percentage of the budget would you allocate to digital marketing?” It's a simple question but let me break it down for you from your perspective. By the way, my answer was 90%.

“It does not work & we are just wasting money!”

If you have decided that Digital Marketing doesn’t work then that should be the end of the story. Stick to traditional marketing and focus on the business.

BUT why do you have this lingering doubt at the back of your head? Why do you feel you need to still defend/look to validate your argument? Why do you have such a difficult time deciding to just cut off digital marketing completely? Here’s why.

Fear of the unknown.

Many people have a fear of the unknown. It's human nature to fear things we don't understand, and digital marketing is one of the many things that are not well understood. 

Most executives do not know much else beyond what they hear in passing over a round of drinks. Understand exactly what your fear is.

A lot of time, the fear originates from having to pull the decision trigger of investing a large amount of money and not knowing what to expect.

It comes down to what you understand

No one has properly explained Digital Marketing to you in a way like you were taught to look at the balance sheet. Every time you get pitched, all you hear is Impressions, Views, Likes, CTR, CPC, and a million other jargon. What does all of this mean?

I’m sure you get pitched, sold, and persuaded to invest in Digital Marketing A LOT! Probably a lot of what you hear doesn't make sense to you.

You can’t afford to go through detailed training about digital marketing while the entire company’s future rests on your broad shoulders.

Plus, it will be a never-ending effort because digital marketing is in a constant state of change. Digital marketing specialists are constantly learning, researching, and adjusting strategies on a perpetual basis.

BUT, what if I tell you that you can understand digital marketing metrics like you understand Financial Ratios?

Why can’t you approach digital marketing performance like you understand Quick Ratio, Cash Ratio, EBITDA, ROE, ROA, and so forth?

I believe very strongly that this gap is the contributing factor for some executives to be wary about investing in their digital marketing strategy.

Resistance to change – It’s just a fad!

I’m sure you’ve heard or read multiple times how giants like Nokia and Kodak failed to keep up with time. I’m not going to copy and paste the case study and waste your time here. Let me share with you my experience of how the hotel industry fell behind the internet revolution and managed to pick itself up.

Before the time of internet bookings & online payments, hotel bookings were done through brick & mortar travel agents. These agencies would use a global distribution system (GDS) such as AMADEUS on a black and green screen.

The industry relied heavily on travel agencies for the bulk of their business. Travel agencies were able to negotiate super low rates from hotels in return for large volumes of business. Not only that, hotels sometimes extended up to 120 days in payment credit to agencies. 

By the time internet bookings emerged, hotels were reluctant to embrace it for the same reasons we are still hesitant about digital marketing. Online Travel Agencies (OTA) such as Agoda & Booking.com emerged and filled the gap. They swept the industry like wildfire and almost completely replaced traditional brick & mortar travel agencies.

As you might have guessed, negotiation power shifted to OTAs’. They had so much leverage that they were cutting into hotels’ profit margins.

Driven by such a situation, large hotel brands began investing in internet bookings, system upgrading, and training their reservation staff. At this time, hotels were so far behind OTAs’ in terms of market share.

Large hotel chains like Intercontinental Hotel Group (IHG) began introducing programs such as Best-Price-Guarantee to encourage direct bookings and to protect their profits.

Do you get what I’m saying? Someone probably said internet booking is a fad at one time.

“Do you even measure bro?”

Anyone who has ever told me Digital Marketing doesn't work has no idea where their sales come from. Yes, it is a bold statement. Ask yourself this, do you have a system in place to attribute each source of sales you receive? If not then how do you know what works and not?

Here’s a tip, when you hear phrases like “most, some, a few, sometimes” or other vague phrases, then you are not measuring. Marketing is an advanced discipline. It is not something you feel and thinks you know. Sure, experience matters but it should not trump data in today’s operating environment. 

Digital marketing fails because we fail to measure correctly. Other times, we fail to decide what is our objective. A mixed objective campaign will rarely work.

Many of us try to do too much with a limited budget. We want a campaign to reach millions of people for brand awareness, but when it comes to measuring, we measure the campaign against how many sales it generated. To make matter worse, there may be sales originating from the campaign but you have no means to track them.

Before beginning any marketing campaign, decide the objective of the campaign and set the right measurement.

Don’t measure a lead generation campaign by the number of views or impressions. Measure the number of leads received, how many leads can be qualified, how many are converted into sales, how many sales were canceled, and how much is your cost per sale.

Then go back and make the necessary adjustment to improve the numbers. Remember, if your objective is to increase sales, measure against sales. Nothing else matters. 

“I don’t see your ads?”

It is natural to get nervous when you haven't seen the ads that you pay so much money for, and you're not sure if anyone else has either.

When you bring this up to the person in charge, they say that it's just how the targeting works. Without diving into the specifics of audience targeting, they are trying to tell you that you are not the targeted audience. 

You won’t believe how many times I’ve been asked this. The problem starts when we don't personally use digital platforms or social media, we will be skeptical of the effectiveness of digital marketing.

Try explaining to your 80-year-old grandma why there are no longer bank books available today. It is almost impossible to explain when the person is not familiar with even the basics of the platform.

So what does that mean for your business? Surely there's something to cure your anxiety before allocating more resources to it. The cure is simply to focus on the measurement like how you would focus on financial reports.

Conclusion

I intended for this post to be short for the easy consumption of busy senior executives with a million things to do in a day.

I hope this inspires a different perspective on Digital Marketing for you. As someone who went from requesting to approving the budget for digital marketing, my advice would be to measure, measure & measure. If possible, be obsessed with the measurement as you would your customers. 

Talk to your peers in similar roles or perspective. If you’d like to, talk to me. I’d be happy to share my humble experiences.