Wednesday, December 4, 2013

New Era of Digital Marketing

Over the last decade, marketing has been all about segmentation. The key to success was to communicate the most compelling message to the most relevant market segment.  That segmentation started first with some basic demographics such as age, gender, and location and eventually progressed to many more data points gathered about a potential buyer over time: company, role, title, income level, decision-making power, team size, purchase-influencing power, etc. The more the better! The principles are the same in B2C and B2B marketing.

Over time, the gathered data was analyzed and correlated with actual buying behavior which resulted in a more and more granular segmentation. You see the result of that every time you visit a grocery store. The data gathering happens using the “value card” which the clerks at the cash register insist you swipe every time you buy something. The card allows the marketers to collect the data about the mix of products you buy. With that, they can learn that you are buying, say, frozen pizza and beer on a work day at 9 pm. Such data gets correlated over a large data pool which then results in definition of a micro-segment of “personas” such as “stressed and overworked single males with poor nutritional habits”. As a result, they may try to place some healthy looking frozen vegetables next to that pizza to suggest you add some vitamins to your diet and to ultimately make you buy more products.

In the online world, data gathering is simple, there is always a digital trail from purchase requisitions and invoices. Therefore, online marketing has been based on segmentation from its early days. When you look at a book on dogs on Amazon, you will start getting suggestions about other books on dogs because ‘interested in dogs’ has been added to your profile as a result of your action. The system now has you tagged as a dog lover and assumes you need more dog-related products. It won’t stop until you look up a few other items which triggers new cross-promotions that eventually crowd out the books on puppies.

Obviously, this method is effective until the gathered data misguides the marketer. The software doesn’t know that it was really my young child checking out the book on dogs while still logged in as me. I may actually not at all be interested in dogs myself. Yet the “dog interest” tag is taking up space at the cost of my real interests - skiing, race cars, iguanas...whatever it is. The software tries to target me as a member of the smallest possible market segment, but the software doesn’t know me at all.

But that’s changing now. With the advent of digital marketing and software solutions such as customer experience management (CEM), customer relationship management (CRM), and marketing automation, the targeting is done not for a market segment but for a named individual. That individual is known by name and the software collects specific personal and professional information about that individual. This is not the fabled “market segment of one” - that approach was still following the path of finer and finer granularity by adding tags and metadata. The new era of online marketing is about knowing you and addressing you with messages and products that are relevant to you specifically.

This new approach to online marketing is promising to be much more effective for both, the marketers and the customers. The marketer only gets a shot or two before being banned into the spam penalty box and addressing you with the right message is crucial. You, on the other hand, only get exposed to messages and products that really could be of interest. Even if you are not shopping for a new sports car, hearing about the new model is actually fun if sports cars are your thing.

But collecting this kind of personal data is not without some challenges. Security and privacy come to mind right away. When the retailer gets hacked and segmentation data is compromised, the damage is relatively limited. OK, so I belong to the ‘interested in dogs’ market segment. That may or may not be a big deal. But if the compromised data includes the names and ages of my children and my home address, that could be a big deal. It sure would be for me!

Of course that’s why the gathering and use of such personal data is usually regulated by law or by compliance rules. Just think about all the regulations related to selling insurance, cars, or investment securities! The marketers, therefore, have to satisfy the regulators that they adhere to all the compliance rules and regulations that they are subject to. This is new territory for most marketing organizations. Remember how hard it was to comply with the do-not-call list and the double opt-in subscriptions? Satisfying the regulators about how we collect, analyse, and use personal data is a necessary requirement for digital marketing today.

That’s serendipitous, because this is where the worlds of CEM and enterprise content management (ECM) meet again. Giving up on the idea of a single platform for all content applications, web content management (WCM) has split from ECM a few years ago and eventually evolved into what we call today CEM. ECM remained focused on its core strengths - employee productivity and information governance. Yet exactly those information governance capabilities are needed to address the compliance requirements in the new world of digital marketing today. And so the two friends are meeting again to usher in a new era of digital marketing - with compliance.


  1. Hi Lubor,

    Nice Post.

    WCM (now CEM) is used in customer facing applications (used by end consumers). ECM is mainly used in intranet applications at enterprises mostly used by the employees. Can you please tell how the convergence of CEM & ECM will happen ?

    Karthick S

    1. Hello Karthick,
      Thanks for chiming in here. As I am explaining in the last two paragraphs of the artice, the CEM applications require a compliance backbone to ensure that marketers can comply with all the regulations and security requirements that arise when they move towards personalized targetting.

  2. At the present time, almost all the businessmen are totally dependent on the digital marketing channels for marketing of their particular business. Social media is also involving in this digital marketing chain. Almost all the social media websites like Facebook, Twitter, Google +, etc. are making their advertising policies better and much better day by day.