To keep it simple, think of digital marketing transformation as a way to reconsider existing marketing models, to experiment more with new online tools and technologies, to become more agile in your ability as a marketing/business leader to respond to growing customer demands, competition and corporate pains.
In the digital era, online marketing transformation is imperative for all organizations, from startups to enterprises, operating on the competitive markets. This idea comes from seemingly every article, panel discussion, or study related to how modern organizations can remain competitive and sustainable as digital marketing becomes increasingly technology- and data-driven.
However, what remains not clear to many CMOs and business leaders is what digital marketing transformation means and how to benefit from it. Lack of the right understanding of transformations in online marketing prevents leaders from making smart decisions regarding what to do about it.
Another issue is that CMOs feel the very term “marketing transformation” has become so widely used, even propagandistic, that it appears to be ambiguous and misleading.
In this article, we answer some of the common questions around marketing transformation and digital technologies like AI, and provide clarity, specifically to CMOs and marketing professionals.
What is digital marketing transformation?
At a glance, it looks hard to pinpoint a common definition of digital marketing transformation because every single organization builds and implements a unique marketing mix. However, their marketing efforts spin around one and the same set of digital technologies like customer sentiment analysis and predictive analytics, so transformations in that technology landscape will inevitably disrupt their marketing efforts.
With this idea in mind, we define digital marketing transformation as the integration of emerging technologies into the marketing framework of an organization, fundamentally changing how this organization operates in the market and delivers value to customers. Marketing transformation is caused by any technological change in the business landscape that forces the organization to carry out significant changes in their marketing initiatives, as opposed to incremental changes.
As a process, digital marketing transformation relies on the combined usage of digital technologies and data such as predictive analytics, real-time bidding and customer intents to generate new or improved marketing-related processes, solutions, and experiences to satisfy ever-evolving business and customer demands.
What about digitization?
Digitization comes close with marketing transformation. Digitization in marketing refers to the use of digitized information or data such as customer profiles, advertising assets, emails, etc., for the purpose of driving marketing efforts through digital means and channels. Software operating systems are used to operate digital marketing assets.
Digitization in marketing proposes businesses a new way of working with prospects and customers in the digital age. It redefines traditional views on lead generation, sales, customer experience, and customer service. This change involves data and digital technology adoption within not the marketing department itself but the entire organization, profoundly transforming the way the company operates and manages its business development and customer relationships management activities.
An organization may take on marketing disruption for several reasons. But survival is the most likely reason. In the wake of the COVID-19 crisis, an organization’s ability to adapt to rapid shifts in both demand and supply as well as time-to-market pressures and changing consumer behavior has become critical. International Data Corporation (IDC) reported that in 2022 global spending on marketing innovation will grow by 12.5 percent to $0.5 trillion. Marketing transformation will remain among the few brightest spots in a year characterized by dramatic reductions in overall technology spending across industries.
The importance of digital marketing transformation
We identify several major reasons an organization may want to shift to digital marketing. For example, to survive in the digital age. Another reason is to experiment with target audiences and to test banners and messages in digital advertising campaigns. Or, to use a mix of mobile, display, social, email, SEO and PPC channels to reach prospective customers through digital.
Digital transformation is important to marketing success because it allows to discover whether or not a given business development initiative brings the company’s potential for power and speed to life through digital.
Customer experience (CX) improvement is a key component of digital marketing transformation. In fact, digitization in marketing has changed customer service and CRM forever, by enabling flexibility, speed and easiness in administering digital interactions (through the web, mobile, social etc.) with customers and prospects, analyzing their behaviors, and making predictions of future outcomes. In addition, customer intelligence and analytics has also become much more efficient, compared to traditional CX and CRM tools.
AI drives marketing transformation
When marketing continued its transformation to digital, CMOs began to formulate strategies for using advanced technologies such as artificial intelligence (AI). Sentiment analysis, natural language processing, recommender systems and other AI technologies have made it easier for marketers to incorporate and assimilate to drastic changes in the digital world.
The leading use of AI in the current digital marketing shift is in helping integrate customer data, digital tools, and human effort to form a comprehensive view of how to satisfy create, maintain and improve customer value through various digital channels.
For instance, AI-enabled marketing predictive analytics capabilities generate customer insights that are used to prioritize leads for sales, create personalized messaging, define performance goals and measure campaign results. As customers increasingly use social media to research product or service options, marketers utilize sentiment analysis and social listening tools like SparkToro and Latana to discover what content prospects watch, follow and share.
Challenges of AI-driven marketing disruption
As mentioned above, artificial intelligence provides marketers critical information needed to make more informed decisions about marketing strategies and customer relationship management (CRM) tactics. However, the use of data in AI marketing is the main concern that needs to be carefully addressed in order for marketers to not only need to adapt to change but also actively seek out new opportunities for development.
There are several key challenges facing all organizations in their efforts to develop and implement AI-driven digital marketing disruption strategies, including but not limited to:
- sustainable success.
This list is long but the two biggest issues that every organization must address today are privacy and security.
Privacy and security are among the areas of confusion and concern for marketing shifts. Security is one of the major concerns for marketers because 55% of companies surveyed by O’Reilly report that they regard information security as their biggest challenge today.
Marketers want to be able to trust their digital solutions and tools, but they also need to know that information is being used strictly for legitimate marketing purposes and not accessed by retailers or other entities without their consent.
In 2014, Google announced it would stop offering personalized search results based on previous searches undertaken by a user. The personalization of search results can be quite intrusive as it gives marketers the ability to compare shopping preferences across different audiences. If an shopper has an interest in buying something from one retailer, then other retailers will often show results that include content that is related to the same products, which is not the right approach to generating recommendations and understanding customer behaviors.
Deep learning for smart marketing strategies
Marketing transformation is taking place as a result of the development of new technologies as well as the improving capabilities of artificial intelligence. Particularly, deep learning powers CRM and marketing strategies through:
- data discovery;
- data integration and analysis; and,
- data visualization and report generation.
Deep learning is a natural language processing method that uses the collective knowledge of data to automatically improve predictive models. It has been developed by using large amount of pre-existing data, which enables it to build complex statistical models on the basis of human-made rules about previous relationships.
Deep learning is used in many fields, including medical diagnosis, security systems, automatic translation (for example, the Google Translate system), and automated driving.
The use of AI deep learning technology in digital marketing helps analyze a large amount of text data in a way that is much more efficient and accurate than was previously possible. Previously marketers had to hire third-party consultancies that would perform the analysis, but now they can use AI to do it themselves.
There are several ways that marketers can use this technology to improve their strategies:
- Creating personalized content for each lead based on the text from the lead’s social media posts, emails, blog posts and other available textual information. This also helps automate data entry when compared to manual processes.
- Analyzing the feedback of clients about the marketing campaigns, which allows for a deeper understanding of what customers think about a particular campaign.
- Using machine learning to predict future behaviors and reactions from customers, so that marketers can alert them to products or services that have been successful in the past or those that have not.
- Creating a dialogue with their customers and build relationships based on shared interests. This type of marketing is referred to as conversational marketing or chatbot marketing. It combines AI and chatbots in order to optimize prospecting and CRM processes.
- Automating marketing campaigns that are not likely to be successful. This can be achieved through the use of machine learning that suggests the most appealing messaging, based on historical success rates.
Checklist: Accelerating transformations in marketing departments
The main messages that can be extracted from the disruption of digital marketing are that companies must use AI-driven approaches, they need to focus on creating experiences for their customers rather than simply selling products, they must collect data in order to understand their customers better and they must train the organization around the artificial intelligence domain.
Here are the checklist to help you accelerate the shift of your marketing toward AI-driven approaches in these three steps:
1) Start with your strategic planning stage. Explore the possibilities for using AI in your company by driving down the following questions:
Q) Where are there opportunities to use AI?
Q) What areas of your business need to be strengthened with AI tools?
Q) Which of your competitors use artificial intelligence?
Q) Where can you get reliable information about how other organizations are using AI?
2) Use change management. Change management is necessary for optimizing the transformation process. The following are the 3 main challenges to face when implementing change management:
Q) To implement change management, you must create a culture of experimentation. This is crucial because it allows employees to experiment with new ideas that may ultimately prove useful for the company. This ultimately means that employees must be willing to take risks in order to innovate, but they need to know that they will not suffer any consequences for failure.
Q) The second challenge is making time for ideation. Your employees need time to develop new ideas, but they also need to know that their superiors will support them in implementing these ideas.
Q) A company must support the change management process by communicating the importance of innovation across the organization. This is important because employees may be resistant to change. They need to know that AI can help them do their jobs better and not take over the responsibilities of their jobs.
3) Train employees on AI technology. Employees must be trained on new technology so that they understand the opportunities and the risks.
Marketing transformation is an ongoing process, which requires a constant evaluation of what works and what does not. Researching the best approaches to marketing is a good idea, for example, looking at current marketing trends and applying them to the organization will help improve processes such as CRM and data visualization.
New technologies such as natural language processing and deep learning have the potential to transform processes in marketing departments. However, marketers should not be afraid of artificial intelligence, but rather embrace it and use it to improve their marketing practices.