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•	 Cognizant Reports
cognizant reports | May 2013
Time for Consumer Goods Companies
to Rethink Digital Marketing
Consumer goods companies must reinvent their digital marketing
capabilities to actively engage consumers and move them along the path
to purchase by consistently delivering highly personalized, authentic
and valuable brand experiences across marketing channels.
cognizant reports 2
U.S. Media Subscriber Base
Figure 1
* Estimates
Source: eMarketer, Nielsen, Newspaper Association of America, Digital TV Research, Audit Bureau of
Circulations and Media-CMI
60
80
100
120
140
160
180
200
2016*2015*2014*2013*2012*201120102009200820072006200520042003
MillionsofUsers
Social Media Smartphone TV Newspaper
Social media and smartphones outgrow TV and newspapers.
Executive Summary
Social media tools and other digital techniques
are transforming approaches to marketing
across industries. Nowhere is this phenomenon
more pronounced than in consumer goods (CG),
where digital marketing is reinventing brand
relationships by enabling a rich dialog between
manufacturers and consumers. By inserting
themselves into the digital conversation, CG mar-
keters can engage consumers along the entire
path to purchase with economical and person-
alized campaigns derived from vast amounts of
customer behavior data collected across numer-
ous touchpoints. However, this approach requires
marketers to acquire new capabilities.
Many leading companies are embracing a new,
enterprise-level marketing capability model.
This model allows them to craft a holistic and
adaptive digital marketing strategy to deal with
ever-shifting consumer behavior, influenced
by traditional online and fast-growing mobile
technologies. It aims to rewire conventional
marketing structures to create a digital market-
ing factory built for speed, scale and efficiency
in place of today’s fragmented agency-centric
approach. The approach also integrates dispa-
rate sets of customer data as the foundation
for new consumer behavior insights. The model
relies on an integrated digital asset management
foundation that provides marketers with tools to
effectively manage marketing collateral and
create a unified consumer experience, regardless
of channel or device.
Criticaltothismodel’ssuccessisthedeploymentof
talent well-versed in digital marketing tools such as
predictive analytics. Also important is a cross-
functional team within the organization to deliver
a consistent yet differentiated and valuable
consumer experience across channels. A common
characteristic among companies with advanced
enterprise-level digital/social capabilities is a high
degree of collaboration between the CMO and CIO.
Marketers of consumer-facing companies should
begin investing in understanding and mastering
the new enterprise-level digital marketing capa-
bilities to enable the next level of relevant and
authentic interactions with consumers, anytime
and anywhere. To do this, CG marketers must tap
into the potential of social media, mobile, analyt-
ics and cloud technologies (the SMAC StackTM
)
to shape consumer perception of their brands
and improve their market reach and reputation.
Marketers who accurately anticipate and quickly
serve consumer needs will improve their chances
of elevating their brands in the increasingly con-
nected and cluttered digital world, building last-
ing customer engagements that influence shop-
ping and retail buying behavior.
Success will be defined by how well compa-
nies manage and deliver relevant and engaging
consumer experiences. CG companies, there-
fore, need effective digi-social strategies that
clearly differentiate them from their competitors.
As consumers become increasingly digital, CG
companies have only two choices: adapt or
become irrelevant.
cognizant reports 3
Consumers Reinvent Marketing
Digital is the single most disruptive force in
consumer marketing since the launch of
television over 50 years ago. It has redefined
how consumers learn, shop, buy, collect and
share their experiences. And the journey has only
just begun. By 2016, users of social media and
smartphones are projected to outnumber TV and
newspaper subscribers (see Figure 1, previous
page). Marketers are rushing to be where their
customers are by increasing spending on digital
media and mobile marketing (see Figure 2).
Embracing a “Digital Life”
Today, there are more active wireless devices
than American citizens.1
Research from Pew Inter-
net reveals that roughly 56% of U.S. cell phone
owners use their devices to access the Internet.2
More than 60% of individual consumers with an
Internet connection in the U.S. visit social media
U.S. Advertiser Spending
Figure 2
* Estimates
Sources: eMarketer and BiaKelsey
High growth estimated for online and mobile.
0
$10
$20
$30
$40
$50
$60
$70
$80
2008 2009 2010 2011 2012* 2013* 2014* 2015* 2016*
Spending(inbillions)
TV Online Newspaper Mobile Social Media
Consumers Moving Toward a Digital Life
•	 75.6% of the U.S. population is online.
•	 Two-thirds of Web users will use social networks.
•	 70.8% of Web users will watch online videos.
•	 88.1% of Web users over age 14 will browse or research products online.
•	 83.9% of these researchers will make at least one purchase.
Average time spent per day with major media by U.S. adults (in minutes)
2009 2010 2011 2012
TV 267 264 274 278
Online 146 155 167 173
Radio 98 96 94 92
Mobile (nonvoice) 22 34 54 82
Print* 55 50 44 38
•	Newspapers 33 30 26 22
•	Magazines 22 20 18 16
Other 44 47 45 36
Total 632 646 678 699
Note: Time spent does not include multitasking; for example, 60 minutes of multitasking online and with TV counts
as 60 minutes for both TV and online.
*Offline reading only
Source: Chief Marketing Officer Council and eMarketer
Figure 3
cognizant reports 4
platforms every day.3
Americans now spend an
average 2.7 hours a day socializing via their mobile
devices.4
This will only increase with the exponen-
tial growth in smartphone adoption, as additional
consumers spend even more time online social-
izing, playing games and researching and buying
products (see Figure 3, previous page).
Growing Digital Spend by Marketers
According to a 2013 Gartner report, “On aver-
age, companies spent 10.4% of their annual 2012
revenue on overall marketing activities,” and, “Digi-
tal marketing budgets total 2.5% of revenue and
will increase 9% this year.”5
Marketers are shifting
more of their spending to Internet and mobile chan-
nels, where consumers are spending more time
than with print, TV and radio (see Figure 4).
This growth is occurring across all interactive chan-
nels. Interactive Advertising Bureau (IAB) reports
that digital advertising revenues in the U.S., across
industries, hit an historic high of $36.6 billion in
2012, with 15.4% year-over-year growth and dou-
ble-digit growth for the third consecutive year (see
Figure 5).6
With 62% of shoppers using at least one
digital deal on over half of their shopping trips, it
is no surprise that investments in traditional trade
promotion are being redeployed to higher-value
digital and shopper marketing7
investments (see
Figure 6, next page).8
Digital Reinvents Brand Relationships
Digital marketing differs from traditional mass
marketing on two critical dimensions (see sidebar,
next page). First, it enables a dialog between
consumers and the brand. However, such a
conversation will only continue if the content
is relevant, timely and authentic. Marketers
must provide consumers with opportunities to
engage with the brand rather than perpetu-
ally “selling” the brand to them. It’s no longer
about features and benefits; rather, consumers
are searching for relevant experiences. Second,
because marketers are able to understand the
Figure 4
Source: Kleiner Perkins Caufield & Byers
Note: Print includes newspapers and magazines. Internet (excluding mobile) advertising reached $30 billion
in the U.S. in 2011 according to IAB, and mobile advertising reached $1.6 billion. The $20 billion opportunity
assumes an equal share of Internet and mobile ad spend.
Percent of time spent in media vs. percent of advertising spending (U.S., 2011)
YOY decrease in spending between 2010 and 2011
%oftotalmediaconsumptiontime
andadvertisingspending
Time Spent Ad Spend
YOY increase in spending between 2010 and 2011
Internet Advertising:
$30B
Mobile Advertising:
$1.6B
7%
15%
43%
26%
10%
25%
11%
42%
22%
1%
0%
10%
20%
30%
40%
50%
Print Radio TV Internet Mobile
~$20B+
U.S.
opportunity
Not In Sync: Marketers’ Ad Spending vs. Consumers’ Time Spent on
Internet and Mobile
No change in YOY spending between 2010 and 2011
Soaring U.S. Digital Advertising
Revenues
•	 Double-digit growth for three consecutive years:
14.5% year-over-year in 2010, 22% year-over-
year in 2011 and 15.4% year-over-year in 2012.
•	 CG contributed 7% of revenues in 2012, up from
6% in 2011.
•	 Mobile advertising revenues registered 111%
year-over-year growth, with 2012 revenues
of $3.4 billion.
•	 Digital video, a component of display-related
advertising, grew 29% year-over-year in 2012,
with revenues of $2.33 billion.
•	 Search revenues grew by 14.5% year-over-year,
with 2012 revenues of $16.9 billion.
•	 Display-related advertising revenues grew
9% year-over-year in 2012, with revenues of
$12 billion.
Source: Interactive Advertising Bureau
Figure 5
cognizant reports 5
consumer’s browsing and engagement behaviors
and location/context, they can and must offer
increasingly personalized, geo-location-relevant
messages and promotions.
The intimacy available through digital reso-
nates with consumers. Consider that for the CG
industry, mobile media outperforms online media
in its ability to drive brand favorability (up 85%)
and purchase intent (up 170%), according to
Insight-Express. Meanwhile, a Bain & Co. study
found that consumers interacting with compa-
nies over social media spent 20% to 40% more
with them compared with other customers.9
Social media is also invaluable as a channel to
facilitate innovation (see Figure 7, next page).
Combined with mobility, social media completes
the consumer feedback loop, allowing consumers
to provide input on their experience and decision-
making process in real-time.
In a recent DataXu study, 82% of respondents
said digital marketing provides superior insights
on consumer behavior compared with other
types of marketing. Also, more than 75% of
respondents said consumer data generated by
digital marketing improves their commercial
success.10
Digital also offers marketers the ability
Quick Take
Six Ways Marketers Can Benefit From Shifting To Digital
1.	 Engage consumers by interacting with them along the entire path to purchase.
2.	 Create consumer experiences that redefine brand relevance and value.
3.	 Tailor campaigns cost-effectively to target niche markets and specific audiences with relevant messages.
4.	 Aggressively test promotion concepts, tactics and values to determine which combination of factors
yields the best results.
5.	Leverage new technologies and advanced analytics to distill insights on consumer behavior,
building a digital factory to quickly and efficiently reach consumers and new channels as they emerge
(e.g., Pinterest), to reduce non working spend.
6.	 Variabilize and save money on their marketing infrastructure.
Expected Changes in CG Manufacturers’ Advertising and Promotion Mix
Figure 6
Source: Grocery Manufacturers Association and Booz & Co.
* Digital media is an average of mobile marketing, paid search, Internet brand advertising, social media
and owned media.
** Traditional media is an average of TV, print and other paid media.
Note: The numbers do not add up to 100%, as nonrespondents are screened out, and those who respond
do not necessarily indicate their options for all the choices included for a question.
Response base: Includes the following:
Shopper Survey n=~2,706.
Industry Survey n = 34 (CPG manufacturers with +$200 billion in global sales, retailers and shopper
marketing agencies).
Interviews = 28 (senior executives of CPG manufacturers, shopper marketing technology providers
and agencies).
Shopper marketing and digital media lead, while traditional media and trade promotions lag.
Percent of respondents
Trade Promotions
Traditional Media**
Consumer Promotions
Digital Media*
Shopper Marketing
9
3
36
55
10
16
28
40
28
24
18
10
3
7
13
3
40% 20% 0% 20% 40% 60% 80% 100%
Increase >5%
Increase 0-5%
Decrease 0-5%
Decrease >5%
Average annual increase or decrease
over the next three years:
cognizant reports 6
data to derive both market insights and per-
formance metrics. CG marketers can leverage
these granular consumer insights to enhance
brand awareness by engaging with customers
at the right place and time. Forward-looking
companies use analytics to identify evolving
market niches and consumer needs and serve
them with customized products. CG companies
should also use analytics to identify inefficien-
cies to improve operational performance.
	 Getting to these insights is not easy. There
are three essential capabilities required to
succeed. First, companies need to make
sense of all the data sets required to support
insights. This includes structured shipment
and POS data; semi-structured data such as
shopper card data; and unstructured data such
as social media. They need to define how this
data will be collected, sifted and stored.
	 Second, companies need to determine who
will analyze the data and create new insights.
While analysis is a common capability in CG
companies, advanced analytics is not. A robust
analytics strategy is needed to avoid disjointed
silos, each with individual learning curves.
	 Finally, companies need to define who will
activate the insights to generate value. Indus-
tries such as life sciences and financial services
are adopting new approaches to analytics,
where third parties do the data and analytics
heavylifting, freeing the marketing and sales
teams to act on the insights.
	 Without robust analytical capabilities, market-
ers will find it difficult to effectively use the
How Social Media Helps in the Entire Value Chain
Value Chain Step Case / Example Impact
Product development Procter & Gamble •	 R&D costs: -6% per year
Marketing Old Spice
•	 Sales: +16%
•	 Campaign costs: -80%
Sales Ricardo.ch, Sellaround.net •	 Transactions: +18,000 per month
External communication McDonald’s •	 Stock price: +5%
Human resources
Allianz, Bertelsmann, Henkel,
McKinsey & Co.
•	 Reach: +20%
•	 Cost: -27%
•	 Quality: +36%
Internal applications Mountain Equipment Co-op •	 Efficiency gains: >90%
Source: McKinsey
Figure 7
to precisely track and influence consumer behav-
ior along the entire path to purchase.
Digital Marketing’s New Requirements
Personalization has profoundly changed the
digital marketing landscape. In fact, in the
pre-digital era, marketers could not go beyond
targeting broad customer segments, while in
the digital era, they target individuals. Individu-
als can include specialized groups with unique
interests or an entire emerging middle class
(with the opening of global markets), each with
unique preferences and needs. With the advent
of advanced digital tools and social media, CG
manufacturers can either build or reestablish
brand relevance consumer-by-consumer, in ways
that uniquely appeal to each individual. To fully
exploit this opportunity, CG marketers must
rebuild (or in many cases, build) their capabilities.
•	 Social media: CG marketers must use social
media to build customer communities, feed
them with relevant content and encourage
users to review products and share their
recommendations with friends and peers.
A case in point: Maker’s Mark promised to
restore the original formula for its bourbon
after a weeklong social media backlash from
loyal customers resisting a minor change.11
•	 Mobile: U.S. consumers increasingly use
shopping apps on their smartphones.12
CG
companies can learn from retailers that use
mobile ads and coupons, as well as customized
e-mail alerts, to influence customers’ shopping
behavior by pushing relevant offers and dis-
counts via location-aware services and apps.
•	 Analytics: Analytics plays an important role
in making sense of consumer and marketing
cognizant reports 7
customer data they gather, thus losing the
opportunity to monetize insights that could be
derived from such data.
•	 Cloud: When combined with social media,
mobility and analytics, cloud can help CG
companies become more agile, increase
market share, accelerate innovation and
deepen customer relationships at much lower
costs. Companies can quickly and inexpen-
sively deploy IT infrastructure and computing
resources for marketing, set up direct-to-
consumer storefronts, and provide interfaces
with retailers and suppliers to streamline
demand and supply chains. As mentioned
above, we see cloud-based models and analyt-
ics services providers emerging in other indus-
tries. It’s simply a matter of time before this is
adopted by CG companies of all sizes.
An Emerging Marketing Capability
A first step is often to assess the internal
capability landscape. A beverage company found
over 275 Web sites with duplicate capabilities
across brands. This baseline analysis can help
shape the business case for change. Needless to
say, the full support of top leadership is crucial for
accomplishing such a change in culture.
Rewire the ‘Digital Marketing Factory’
According to the CMO Council survey, only 9%
of respondents had a highly evolved digital
marketing model. Mean-
while, 36% of respon-
dents reported embracing
marketing point solutions
that are not unified or
well integrated.13
The avail-
ability and use of multiple
marketing channels adds
to the confusion. A recent
survey by Aprimo sug-
gests that more than 37%
of CMOs believe that inte-
grating and tracking mul-
tiple marketing channels
is their biggest challenge;
28% find it challenging
to do more with less; and
18% rank measurement
and accountability as a top
challenge.14
According to a recent report by DataXu, a sig-
nificant number of respondents see the lack of a
single cross-channel digital marketing platform as
a significant obstacle to their marketing efforts.15
With agency-driven approaches limiting a brand’s
vision, companies will be better served by an inte-
grated marketing platform that allows brand own-
ers to see how shoppers and consumers interact
with individual brands and across the portfolio.
These insights will help marketers understand
what motivates that particular consumer, setting
the stage for more relevant future messages.
CG marketers also stand to benefit from an
end-to-end view of consumer behavior, allow-
ing better segmentation and personalization
through greater access to consumer insight and
intelligence, thus improving spend efficiency
and ROI on advanced analytics initiatives. The
good news is that marketers can start small with
highly structured, hypothesis-based experiments
yielding precise outcomes metrics. Ideas that
fall short create new learning at low cost, and
Model
Leading CG companies are challenging conven-
tional wisdom by embracing a new digi-social
operating model. Core elements of this emerging
marketing capability model include:
•	 Reinvent digital: Create a holistic digital
marketing vision.
•	 Rewire: Craft a ”digital marketing factory”
built for speed, scale and efficiency, as well as
integrating data.
•	 Rebuild: Establish integrated digital asset
management processes for a unified
consumer experience.
•	 Retool the team: Include analytics profession-
als and tools to derive insights.
•	 Rethink the organization: Restructure
operations to deliver consumer value vs.
managing brands.
Reinvent Digital
A holistic digital strategy is essential for CG
companies to leverage the full strategic ben-
efit of new channels for innovation, enable
cross-brand promotions and merchandising,
and measure corporate reputation health. CG
companies, therefore, need to quickly formu-
late and then deploy an integrated approach for
contending with continuously shifting consumer
behavior and the onslaught of digital tools and
channels. To succeed, companies must closely
align their enterprise strategy with key business
objectives.
With agency-driven
approaches limiting
a brand’s vision,
companies will
be better served
by an integrated
marketing platform
that allows brand
owners to see
how shoppers and
consumers interact
with individual
brands and across
the portfolio.
cognizant reports 8
promising experiments can be scaled quickly,
particularly on a cloud-based enterprise digital
marketing platform.
Rebuild the Foundation with Integrated Digital
Asset Management
As CG companies and marketers deal with the
continuing digitization of the consumer experi-
ence, they will benefit from robust digital asset
management (DAM) (see sidebar). Without solid
DAM capabilities in place, marketers will find it
challenging to prevent unnecessary duplication,
ensure quality of content, improve interactions
with consumers and control production costs.
DAM also helps marketers manage all assets cen-
trally, thus addressing the collateral fragmentation
that is rife at many CG companies. DAM platforms
have advanced to a level where it is possible to
publish content on social channels directly.
One CG company we worked with leveraged a
DAM solution to support ”brand books” to ensure
its creative, content and marketing functions all
have the same look and feel across traditional
and digital agencies, production companies, social
media outlets and other myriad partners. Simi-
larly, a large sales organization that we advised
replaced its three-inch binders of printed sales
materials with a tablet-based, DAM-enabled solu-
tion that allows marketing to tailor messages by
customer and geography. The sales team appreci-
ated having the latest content at their fingertips.
The changing digital marketing landscape has
had a significant impact on agencies. A recent
CMO Council survey reveals that a majority of
traditional advertising agencies have failed to
evolve their capabilities to service the digital
marketing needs of their clients. Marketers must,
therefore, rethink their approach to media buying
to find partners suited for designing, building and
distributing customized content.
Retool Team Talent
Very few companies understand how to harness
the power of digital marketing, largely due to
the significant shortage of talent16
well-versed
with digital marketing (see Figure 8). Similar
implications exist for analytical capabilities.
DataXu reports that more than half of the respon-
dents (300-plus) it surveyed said their companies
struggle to analyze the large amounts of data
generated from their digital marketing initiatives.
It further identifies the lack of analytic skills and
appropriate software/technology as top factors
affecting respondents’ abilities to develop and
act on insights informed by marketing data in
real-time.17
Companies that build the right talent and analytics
capabilities will find it easier to pull ahead of the
competition. CG companies are looking to indus-
The Top 10 Most Difficult Marketing
Positions to Recruit
1.	 Executive Creative Director
2.	 Partner / CEO / Managing Director
3.	 Chief Technology Officer
4.	 Strategist / Planner
5.	 Director of Technology
6.	 User Experience Designer
7.	 Mobile Developer
8.	 Creative Director
9.	 Account Director
10.	 Chief Sales / Marketing Officer
Source: Society of Digital Agencies
Figure 8
Quick Take
Benefits of Digital Asset Management
•	 Agility: Helps CG companies achieve faster time-to-market schedules by sharing and using
marketing material across appropriate markets.
•	 Efficiency: Enables consistency in marketing-related activities; improves the speed of execution and
efficiency.
•	 Measurability: Makes it easier to track usage of assets across channels and provides data that
enables marketers to understand the effectiveness of the assets.
•	 Cost savings: Marketing materials can be rapidly vetted and approved for campaigns and quickly and
cost-effectively pushed into the market.
cognizant reports 9
tries with deep analytics capabilities, recruiting
from universities with strong analytics programs
and, in some cases, partnering with a third party
to deliver analytics and insights as a service.
Rethink the Organization
Companies must enable partnerships among
cross-functional teams to ensure consistent yet
differentiable and valuable digital experiences
for consumers across channels. However, many
companies lack the necessary talent. Companies
need to build talent well-versed in digital, either
through training or acquisition.
As technology becomes
the key enabler of a
successful marketing
strategy, the case for
symbiotic collaboration
between marketing and
IT is emerging more
strongly. The IT function
should be repositioned as a
strategic partner to advise
on and deploy key mar-
keting technology compo-
nents (see Figure 9).
This collaboration starts
with improved CIO/CMO collaboration. CIOs need
to expand their role from a focus on IT costs or
process enablement to being a thought leader on
As consumers increasingly embrace a “digital
life,” they will continue to seek more convenient,
interactive, personalized and value-added
experiences from digital channels. It is impera-
tive, therefore, for consumer-facing companies
to invest in new digital marketing capabilities,
talent and tools to build nimble, fast and
efficient marketing organizations to deliver such
brand experiences to their customers.
The goal of digital marketing is to create consis-
tently relevant and authentic interactions with
consumers, regardless of time and place. The
emerging marketing capability model is designed
to provide consumers with a seamless experi-
ence across marketing channels, through retail-
ers, in-store and online. In our experience, the
first challenge is to understand current digital/
social activity, investment and metrics across the
business. This can be difficult because spending
data is often held by third-party agencies, and
detail is difficult to achieve. However, conducting
this baseline will provide a fact-based view into
Two Budgets For Marketing Technology
Total enterprise spend
Marketing budgets
(split between marketing
and IT department)
Marketing
budget*
Print
Direct mail, branding
and advertising
IT
budget*
Total
enterprise
spend
Acquisition drivers
Display, e-mail marketing,
online ads, search, affiliation
Digital channels
Social media, mobile marketing,
Web site design
Digital platforms
CRM, collaboration software,
sales force automation
E-commerce
8% of IT budget allocated
to marketing applications**
* Forrester estimates that IT and marketing budgets are approximately 5% of total enterprise spend.
** Forrester estimate
Figure 9
Source: Forrester Research
As technology
becomes the
key enabler of
a successful
marketing
strategy, the case
for symbiotic
collaboration
between marketing
and IT is emerging
more strongly.
using social, mobile, analytics, cloud and big data
to drive top-line sales. As a first step, CIOs could
conduct an assessment of the CMO’s digital mar-
keting landscape, identify areas for scale econo-
mies to reduce nonworking costs and improve
speed to market.
The Goal: Reinvent the Consumer’s
Brand Experiences
cognizant reports 10
The biggest challenge is engaging marketers
and agencies in the change. This is similar to the
level of change experienced when media buying
was pulled from agencies and consolidated into
buying services. That move provided brand own-
ers with reduced nonworking costs and improved
flexibility. The most difficult part of the digital
marketing transformation is getting started.
nonworking spend – something that will likely get
the CMO’s attention.
The second challenge is to develop the right
digital/social target capability architecture and
strategy. A wide range of options exists, from
building an on-presence platform, to engaging a
third-party cloud services provider. Each approach
presents pros and cons. Creating a strategy is
straightforward; implementing it is not.
Footnotes
1
	“Mid-Year 2012 CTIA Wireless Industry Indices Report Now Available,” CTIA, November 2012,
http://blog.ctia.org/2012/11/15/mid-year-2012-ctia-wireless-industry-indices-report-available/.
2
	“Cell Phone Activities 2012,” Pew Internet, November 2012, http://pewinternet.org/Reports/2012/
Cell-Activities/Additional-Demographic-Analysis.aspx?view=all.
3
	Chris Barry, Rob Markey, Eric Almquist and Chris Brahm, “Putting Social Media to Work,” Bain & Co.,
September 2011, http://www.bain.com/publications/articles/putting-social-media-to-work.aspx.
4
	Elliott Lemenager, “Tapping into Social Gaming,” Microsoft Corp., September 2011, http://tag.
microsoft.com/community/blog/t/tapping_into_social_gaming.aspx.
5
	The report is based on a survey of 253 marketers from U.S.-based companies. “Key Findings From
U.S. Digital Marketing Spending Survey, 2013,” Gartner, Inc., March 2013, http://www.gartner.com/
technology/research/digital-marketing/digital-marketing-spend-report.jsp.
6
	“Internet Ad Revenues Again Hit Record-Breaking Double-Digit Annual Growth, Reaching Nearly
$37 Billion, a 15% Increase Over 2011’s Landmark Numbers,” Internet Advertising Bureau, April 2013,
http://www.iab.net/about_the_iab/recent_press_releases/press_release_archive/press_release/
pr-041613.
7
	Shopper marketing provides actionable insights into how target consumers behave as shoppers in
different formats and channels all along their path to purchase.
8
	“Shopper Marketing 4.0: Building Scalable Playbooks That Drive Results,” GMA and Booz & Co., 2010,
http://www.gmaonline.org/downloads/research-and-reports/Shopper_Marketing_4.0.pdf.
9
	Chris Barry, Rob Markey, Eric Almquist and Chris Brahm, “Putting Social Media to Work,” Bain & Co.,
September 2011, http://www.bain.com/publications/articles/putting-social-media-to-work.aspx.
10
	“Marketing in the Digital Age; Winning with Data & Analytics,” DataXu, 2012, http://www.dataxu.com/
marketing-in-the-digital-age-the-analytics-advantage-2/.
11
	“Breaking Bourbon News: The Public Spoke, Maker's Mark Listened - Returning To Original Formula,”
Forbes, February 2013, http://www.forbes.com/sites/larryolmsted/2013/02/17/breaking-bourbon-news-
the-public-spoke-makers-mark-listened-returning-to-original-formula/.
12
	“Which Smartphone Apps Do Savvy Shoppers Use Most?” Nielsen, August, 2012, http://blog.nielsen.
com/nielsenwire/online_mobile/top-mobile-shopping-apps/.
13
	“Integrate to Accelerate Digital Marketing Value,” CMO Council, 2012, http://www.cmocouncil.org/
images/uploads/245.pdf.
14
	“New Survey Reveals Biggest Challenges Facing CMOs Today,” Aprimo, May 2010, http://www.aprimo.
com/WorkArea/DownloadAsset.aspx?id=603.
cognizant reports 11
15
	“Marketing in the Digital Age; Winning with Data & Analytics,” DataXu, 2012, http://www.dataxu.com/
marketing-in-the-digital-age-the-analytics-advantage-2/.
16
	“Big Data: The Next Frontier for Innovation, Competition, and Productivity,” McKinsey Global Institute,
May 2011, http://www.mckinsey.com/Insights/MGI/Research/Technology_and_Innovation/Big_data_
The_next_frontier_for_innovation.
17
	“Marketing in the Digital Age; Winning with Data & Analytics,” DataXu, 2012, http://www.dataxu.com/
marketing-in-the-digital-age-the-analytics-advantage-2/.
References
•	Roxane Divol, David Edelman and Hugo Sarrazin, “Demystifying Social Media,” McKinsey & Co.,
April, 2012, http://www.mckinseyquarterly.com/Demystifying_social_media_2958.
•	“Marketing Optimization in the Digital Age,” ThinkVine Corporation, February 2012, http://www.
marketingpower.com/ResourceLibrary/Documents/Whitepapers/ThinkVine%20Whitepaper.pdf.
•	Katharine Sayre, Vaishali Rastogi, Paul Zwillenberg, Jody Visser and Alannah Sheerin, “Marketing
Capabilities for the Digital Age,” BCG Perspectives, January 2012, https://www.bcgperspectives.com/
content/articles/marketing_branding_communication_marketing_capabilities_for_digital_age/.
•	Peter O'Neill, “The Emergence Of The Digital Marketing Service Provider,” Forrester Research, Inc.,
January 2012, http://www.forrester.com/The+Emergence+Of+The+Digital+Marketing+Service+Provi
der/fulltext/-/E-RES61168.
•	Bertil Chappius, Ewan Duncan, Brendan Gaffey and Kevin Roche, “The Next Stage: Six Ways the Digital
Consumer is Changing,” McKinsey & Co., 2012, http://csi.mckinsey.com/Home/Knowledge_by_region/
Americas/Six_digital_trends.aspx.
•	“The 2012 Digital Marketer: Benchmark and Trend Report,” Experian, 2012, http://go.experian.com/
forms/experian-digital-marketer-2012.
•	Pat Conroy, Chris Weitz, Anupam Narula and Alan Langhals, “Rethinking the Role of IT for CPG
Companies,” Deloitte, 2012, http://www.deloitte.com/assets/Dcom-UnitedStates/Local%20Content/
Articles/Consumer%20Business/Consumer%20Products/us_cp_rethinkingtheroleofIT_042512.pdf.
•	“How You Can Meet Your Top Marketing Priorities with Digital Asset Management,” Widen, 2012,
http://www.widen.com/wp-content/uploads/2012/07/Marketing-Priorities-2012-WhitePaper.pdf.
•	“A Marketer’s Guide to Analytics,” SAS, 2012, http://www.sas.com/resources/whitepaper/wp_21118.pdf.
•	Marketing Analytics, IBM, 2012, http://www.ibm.com/smarterplanet/us/en/smarter_marketing/article/
marketing_analytics.html.
•	“The SoDA Report 2012,” The Global Society for Digital Marketing Innovators, 2012, http://www.
slideshare.net/sodaspeaks/the-soda-report-11690932.
•	Matthew Egol, Andrew Clyde, Kasturi Rangan and Richard Sanderson, “The New Consumer
Frugality: Adapting to the Enduring Shift in U.S. Consumer Spending and Behavior,” Booz & Co., 2010,
http://www.booz.com/media/uploads/The_New_Consumer_Frugality.pdf.
•	“CMO Council State of Marketing 2010,” CMO Council, 2010, http://www.deloitte.com/assets/
Dcom-UnitedStates/Local%20Assets/Documents/us_consulting_CMOCouncil_050510.pdf.
About Cognizant
Cognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business process
outsourcing services, dedicated to helping the world’s leading companies build stronger businesses. Headquartered
in Teaneck, New Jersey (U.S.), Cognizant combines a passion for client satisfaction, technology innovation, deep
industry and business process expertise, and a global, collaborative workforce that embodies the future of work.
With over 50 delivery centers worldwide and approximately 162,700 employees as of March 31, 2013, Cognizant is a
member of the NASDAQ-100, the S&P 500, the Forbes Global 2000, and the Fortune 500 and is ranked among the
top performing and fastest growing companies in the world.
Visit us online at www.cognizant.com for more information.
World Headquarters
500 Frank W. Burr Blvd.
Teaneck, NJ 07666 USA
Phone: +1 201 801 0233
Fax: +1 201 801 0243
Toll Free: +1 888 937 3277
Email: inquiry@cognizant.com
European Headquarters
1 Kingdom Street
Paddington Central
London W2 6BD
Phone: +44 (0) 207 297 7600
Fax: +44 (0) 207 121 0102
Email: infouk@cognizant.com
India Operations Headquarters
#5/535, Old Mahabalipuram Road
Okkiyam Pettai, Thoraipakkam
Chennai, 600 096 India
Phone: +91 (0) 44 4209 6000
Fax: +91 (0) 44 4209 6060
Email: inquiryindia@cognizant.com
­­© Copyright 2013, Cognizant. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, transmitted in any form or by any
means, electronic, mechanical, photocopying, recording, or otherwise, without the express written permission from Cognizant. The information contained herein is
subject to change without notice. All other trademarks mentioned herein are the property of their respective owners.
Credits
Author and Analyst
Aala Santhosh Reddy, Senior Research Associate, Cognizant Research Center
Subject Matter Expert
Johan Sauer, Assistant Vice-President, Cognizant Business Consulting, Consumer Goods Practice
Design
Harleen Bhatia, Design Team Lead
Suresh Sambandhan, Designer

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Consumer Goods Companies Must Reinvent Digital Marketing

  • 1. • Cognizant Reports cognizant reports | May 2013 Time for Consumer Goods Companies to Rethink Digital Marketing Consumer goods companies must reinvent their digital marketing capabilities to actively engage consumers and move them along the path to purchase by consistently delivering highly personalized, authentic and valuable brand experiences across marketing channels.
  • 2. cognizant reports 2 U.S. Media Subscriber Base Figure 1 * Estimates Source: eMarketer, Nielsen, Newspaper Association of America, Digital TV Research, Audit Bureau of Circulations and Media-CMI 60 80 100 120 140 160 180 200 2016*2015*2014*2013*2012*201120102009200820072006200520042003 MillionsofUsers Social Media Smartphone TV Newspaper Social media and smartphones outgrow TV and newspapers. Executive Summary Social media tools and other digital techniques are transforming approaches to marketing across industries. Nowhere is this phenomenon more pronounced than in consumer goods (CG), where digital marketing is reinventing brand relationships by enabling a rich dialog between manufacturers and consumers. By inserting themselves into the digital conversation, CG mar- keters can engage consumers along the entire path to purchase with economical and person- alized campaigns derived from vast amounts of customer behavior data collected across numer- ous touchpoints. However, this approach requires marketers to acquire new capabilities. Many leading companies are embracing a new, enterprise-level marketing capability model. This model allows them to craft a holistic and adaptive digital marketing strategy to deal with ever-shifting consumer behavior, influenced by traditional online and fast-growing mobile technologies. It aims to rewire conventional marketing structures to create a digital market- ing factory built for speed, scale and efficiency in place of today’s fragmented agency-centric approach. The approach also integrates dispa- rate sets of customer data as the foundation for new consumer behavior insights. The model relies on an integrated digital asset management foundation that provides marketers with tools to effectively manage marketing collateral and create a unified consumer experience, regardless of channel or device. Criticaltothismodel’ssuccessisthedeploymentof talent well-versed in digital marketing tools such as predictive analytics. Also important is a cross- functional team within the organization to deliver a consistent yet differentiated and valuable consumer experience across channels. A common characteristic among companies with advanced enterprise-level digital/social capabilities is a high degree of collaboration between the CMO and CIO. Marketers of consumer-facing companies should begin investing in understanding and mastering the new enterprise-level digital marketing capa- bilities to enable the next level of relevant and authentic interactions with consumers, anytime and anywhere. To do this, CG marketers must tap into the potential of social media, mobile, analyt- ics and cloud technologies (the SMAC StackTM ) to shape consumer perception of their brands and improve their market reach and reputation. Marketers who accurately anticipate and quickly serve consumer needs will improve their chances of elevating their brands in the increasingly con- nected and cluttered digital world, building last- ing customer engagements that influence shop- ping and retail buying behavior. Success will be defined by how well compa- nies manage and deliver relevant and engaging consumer experiences. CG companies, there- fore, need effective digi-social strategies that clearly differentiate them from their competitors. As consumers become increasingly digital, CG companies have only two choices: adapt or become irrelevant.
  • 3. cognizant reports 3 Consumers Reinvent Marketing Digital is the single most disruptive force in consumer marketing since the launch of television over 50 years ago. It has redefined how consumers learn, shop, buy, collect and share their experiences. And the journey has only just begun. By 2016, users of social media and smartphones are projected to outnumber TV and newspaper subscribers (see Figure 1, previous page). Marketers are rushing to be where their customers are by increasing spending on digital media and mobile marketing (see Figure 2). Embracing a “Digital Life” Today, there are more active wireless devices than American citizens.1 Research from Pew Inter- net reveals that roughly 56% of U.S. cell phone owners use their devices to access the Internet.2 More than 60% of individual consumers with an Internet connection in the U.S. visit social media U.S. Advertiser Spending Figure 2 * Estimates Sources: eMarketer and BiaKelsey High growth estimated for online and mobile. 0 $10 $20 $30 $40 $50 $60 $70 $80 2008 2009 2010 2011 2012* 2013* 2014* 2015* 2016* Spending(inbillions) TV Online Newspaper Mobile Social Media Consumers Moving Toward a Digital Life • 75.6% of the U.S. population is online. • Two-thirds of Web users will use social networks. • 70.8% of Web users will watch online videos. • 88.1% of Web users over age 14 will browse or research products online. • 83.9% of these researchers will make at least one purchase. Average time spent per day with major media by U.S. adults (in minutes) 2009 2010 2011 2012 TV 267 264 274 278 Online 146 155 167 173 Radio 98 96 94 92 Mobile (nonvoice) 22 34 54 82 Print* 55 50 44 38 • Newspapers 33 30 26 22 • Magazines 22 20 18 16 Other 44 47 45 36 Total 632 646 678 699 Note: Time spent does not include multitasking; for example, 60 minutes of multitasking online and with TV counts as 60 minutes for both TV and online. *Offline reading only Source: Chief Marketing Officer Council and eMarketer Figure 3
  • 4. cognizant reports 4 platforms every day.3 Americans now spend an average 2.7 hours a day socializing via their mobile devices.4 This will only increase with the exponen- tial growth in smartphone adoption, as additional consumers spend even more time online social- izing, playing games and researching and buying products (see Figure 3, previous page). Growing Digital Spend by Marketers According to a 2013 Gartner report, “On aver- age, companies spent 10.4% of their annual 2012 revenue on overall marketing activities,” and, “Digi- tal marketing budgets total 2.5% of revenue and will increase 9% this year.”5 Marketers are shifting more of their spending to Internet and mobile chan- nels, where consumers are spending more time than with print, TV and radio (see Figure 4). This growth is occurring across all interactive chan- nels. Interactive Advertising Bureau (IAB) reports that digital advertising revenues in the U.S., across industries, hit an historic high of $36.6 billion in 2012, with 15.4% year-over-year growth and dou- ble-digit growth for the third consecutive year (see Figure 5).6 With 62% of shoppers using at least one digital deal on over half of their shopping trips, it is no surprise that investments in traditional trade promotion are being redeployed to higher-value digital and shopper marketing7 investments (see Figure 6, next page).8 Digital Reinvents Brand Relationships Digital marketing differs from traditional mass marketing on two critical dimensions (see sidebar, next page). First, it enables a dialog between consumers and the brand. However, such a conversation will only continue if the content is relevant, timely and authentic. Marketers must provide consumers with opportunities to engage with the brand rather than perpetu- ally “selling” the brand to them. It’s no longer about features and benefits; rather, consumers are searching for relevant experiences. Second, because marketers are able to understand the Figure 4 Source: Kleiner Perkins Caufield & Byers Note: Print includes newspapers and magazines. Internet (excluding mobile) advertising reached $30 billion in the U.S. in 2011 according to IAB, and mobile advertising reached $1.6 billion. The $20 billion opportunity assumes an equal share of Internet and mobile ad spend. Percent of time spent in media vs. percent of advertising spending (U.S., 2011) YOY decrease in spending between 2010 and 2011 %oftotalmediaconsumptiontime andadvertisingspending Time Spent Ad Spend YOY increase in spending between 2010 and 2011 Internet Advertising: $30B Mobile Advertising: $1.6B 7% 15% 43% 26% 10% 25% 11% 42% 22% 1% 0% 10% 20% 30% 40% 50% Print Radio TV Internet Mobile ~$20B+ U.S. opportunity Not In Sync: Marketers’ Ad Spending vs. Consumers’ Time Spent on Internet and Mobile No change in YOY spending between 2010 and 2011 Soaring U.S. Digital Advertising Revenues • Double-digit growth for three consecutive years: 14.5% year-over-year in 2010, 22% year-over- year in 2011 and 15.4% year-over-year in 2012. • CG contributed 7% of revenues in 2012, up from 6% in 2011. • Mobile advertising revenues registered 111% year-over-year growth, with 2012 revenues of $3.4 billion. • Digital video, a component of display-related advertising, grew 29% year-over-year in 2012, with revenues of $2.33 billion. • Search revenues grew by 14.5% year-over-year, with 2012 revenues of $16.9 billion. • Display-related advertising revenues grew 9% year-over-year in 2012, with revenues of $12 billion. Source: Interactive Advertising Bureau Figure 5
  • 5. cognizant reports 5 consumer’s browsing and engagement behaviors and location/context, they can and must offer increasingly personalized, geo-location-relevant messages and promotions. The intimacy available through digital reso- nates with consumers. Consider that for the CG industry, mobile media outperforms online media in its ability to drive brand favorability (up 85%) and purchase intent (up 170%), according to Insight-Express. Meanwhile, a Bain & Co. study found that consumers interacting with compa- nies over social media spent 20% to 40% more with them compared with other customers.9 Social media is also invaluable as a channel to facilitate innovation (see Figure 7, next page). Combined with mobility, social media completes the consumer feedback loop, allowing consumers to provide input on their experience and decision- making process in real-time. In a recent DataXu study, 82% of respondents said digital marketing provides superior insights on consumer behavior compared with other types of marketing. Also, more than 75% of respondents said consumer data generated by digital marketing improves their commercial success.10 Digital also offers marketers the ability Quick Take Six Ways Marketers Can Benefit From Shifting To Digital 1. Engage consumers by interacting with them along the entire path to purchase. 2. Create consumer experiences that redefine brand relevance and value. 3. Tailor campaigns cost-effectively to target niche markets and specific audiences with relevant messages. 4. Aggressively test promotion concepts, tactics and values to determine which combination of factors yields the best results. 5. Leverage new technologies and advanced analytics to distill insights on consumer behavior, building a digital factory to quickly and efficiently reach consumers and new channels as they emerge (e.g., Pinterest), to reduce non working spend. 6. Variabilize and save money on their marketing infrastructure. Expected Changes in CG Manufacturers’ Advertising and Promotion Mix Figure 6 Source: Grocery Manufacturers Association and Booz & Co. * Digital media is an average of mobile marketing, paid search, Internet brand advertising, social media and owned media. ** Traditional media is an average of TV, print and other paid media. Note: The numbers do not add up to 100%, as nonrespondents are screened out, and those who respond do not necessarily indicate their options for all the choices included for a question. Response base: Includes the following: Shopper Survey n=~2,706. Industry Survey n = 34 (CPG manufacturers with +$200 billion in global sales, retailers and shopper marketing agencies). Interviews = 28 (senior executives of CPG manufacturers, shopper marketing technology providers and agencies). Shopper marketing and digital media lead, while traditional media and trade promotions lag. Percent of respondents Trade Promotions Traditional Media** Consumer Promotions Digital Media* Shopper Marketing 9 3 36 55 10 16 28 40 28 24 18 10 3 7 13 3 40% 20% 0% 20% 40% 60% 80% 100% Increase >5% Increase 0-5% Decrease 0-5% Decrease >5% Average annual increase or decrease over the next three years:
  • 6. cognizant reports 6 data to derive both market insights and per- formance metrics. CG marketers can leverage these granular consumer insights to enhance brand awareness by engaging with customers at the right place and time. Forward-looking companies use analytics to identify evolving market niches and consumer needs and serve them with customized products. CG companies should also use analytics to identify inefficien- cies to improve operational performance. Getting to these insights is not easy. There are three essential capabilities required to succeed. First, companies need to make sense of all the data sets required to support insights. This includes structured shipment and POS data; semi-structured data such as shopper card data; and unstructured data such as social media. They need to define how this data will be collected, sifted and stored. Second, companies need to determine who will analyze the data and create new insights. While analysis is a common capability in CG companies, advanced analytics is not. A robust analytics strategy is needed to avoid disjointed silos, each with individual learning curves. Finally, companies need to define who will activate the insights to generate value. Indus- tries such as life sciences and financial services are adopting new approaches to analytics, where third parties do the data and analytics heavylifting, freeing the marketing and sales teams to act on the insights. Without robust analytical capabilities, market- ers will find it difficult to effectively use the How Social Media Helps in the Entire Value Chain Value Chain Step Case / Example Impact Product development Procter & Gamble • R&D costs: -6% per year Marketing Old Spice • Sales: +16% • Campaign costs: -80% Sales Ricardo.ch, Sellaround.net • Transactions: +18,000 per month External communication McDonald’s • Stock price: +5% Human resources Allianz, Bertelsmann, Henkel, McKinsey & Co. • Reach: +20% • Cost: -27% • Quality: +36% Internal applications Mountain Equipment Co-op • Efficiency gains: >90% Source: McKinsey Figure 7 to precisely track and influence consumer behav- ior along the entire path to purchase. Digital Marketing’s New Requirements Personalization has profoundly changed the digital marketing landscape. In fact, in the pre-digital era, marketers could not go beyond targeting broad customer segments, while in the digital era, they target individuals. Individu- als can include specialized groups with unique interests or an entire emerging middle class (with the opening of global markets), each with unique preferences and needs. With the advent of advanced digital tools and social media, CG manufacturers can either build or reestablish brand relevance consumer-by-consumer, in ways that uniquely appeal to each individual. To fully exploit this opportunity, CG marketers must rebuild (or in many cases, build) their capabilities. • Social media: CG marketers must use social media to build customer communities, feed them with relevant content and encourage users to review products and share their recommendations with friends and peers. A case in point: Maker’s Mark promised to restore the original formula for its bourbon after a weeklong social media backlash from loyal customers resisting a minor change.11 • Mobile: U.S. consumers increasingly use shopping apps on their smartphones.12 CG companies can learn from retailers that use mobile ads and coupons, as well as customized e-mail alerts, to influence customers’ shopping behavior by pushing relevant offers and dis- counts via location-aware services and apps. • Analytics: Analytics plays an important role in making sense of consumer and marketing
  • 7. cognizant reports 7 customer data they gather, thus losing the opportunity to monetize insights that could be derived from such data. • Cloud: When combined with social media, mobility and analytics, cloud can help CG companies become more agile, increase market share, accelerate innovation and deepen customer relationships at much lower costs. Companies can quickly and inexpen- sively deploy IT infrastructure and computing resources for marketing, set up direct-to- consumer storefronts, and provide interfaces with retailers and suppliers to streamline demand and supply chains. As mentioned above, we see cloud-based models and analyt- ics services providers emerging in other indus- tries. It’s simply a matter of time before this is adopted by CG companies of all sizes. An Emerging Marketing Capability A first step is often to assess the internal capability landscape. A beverage company found over 275 Web sites with duplicate capabilities across brands. This baseline analysis can help shape the business case for change. Needless to say, the full support of top leadership is crucial for accomplishing such a change in culture. Rewire the ‘Digital Marketing Factory’ According to the CMO Council survey, only 9% of respondents had a highly evolved digital marketing model. Mean- while, 36% of respon- dents reported embracing marketing point solutions that are not unified or well integrated.13 The avail- ability and use of multiple marketing channels adds to the confusion. A recent survey by Aprimo sug- gests that more than 37% of CMOs believe that inte- grating and tracking mul- tiple marketing channels is their biggest challenge; 28% find it challenging to do more with less; and 18% rank measurement and accountability as a top challenge.14 According to a recent report by DataXu, a sig- nificant number of respondents see the lack of a single cross-channel digital marketing platform as a significant obstacle to their marketing efforts.15 With agency-driven approaches limiting a brand’s vision, companies will be better served by an inte- grated marketing platform that allows brand own- ers to see how shoppers and consumers interact with individual brands and across the portfolio. These insights will help marketers understand what motivates that particular consumer, setting the stage for more relevant future messages. CG marketers also stand to benefit from an end-to-end view of consumer behavior, allow- ing better segmentation and personalization through greater access to consumer insight and intelligence, thus improving spend efficiency and ROI on advanced analytics initiatives. The good news is that marketers can start small with highly structured, hypothesis-based experiments yielding precise outcomes metrics. Ideas that fall short create new learning at low cost, and Model Leading CG companies are challenging conven- tional wisdom by embracing a new digi-social operating model. Core elements of this emerging marketing capability model include: • Reinvent digital: Create a holistic digital marketing vision. • Rewire: Craft a ”digital marketing factory” built for speed, scale and efficiency, as well as integrating data. • Rebuild: Establish integrated digital asset management processes for a unified consumer experience. • Retool the team: Include analytics profession- als and tools to derive insights. • Rethink the organization: Restructure operations to deliver consumer value vs. managing brands. Reinvent Digital A holistic digital strategy is essential for CG companies to leverage the full strategic ben- efit of new channels for innovation, enable cross-brand promotions and merchandising, and measure corporate reputation health. CG companies, therefore, need to quickly formu- late and then deploy an integrated approach for contending with continuously shifting consumer behavior and the onslaught of digital tools and channels. To succeed, companies must closely align their enterprise strategy with key business objectives. With agency-driven approaches limiting a brand’s vision, companies will be better served by an integrated marketing platform that allows brand owners to see how shoppers and consumers interact with individual brands and across the portfolio.
  • 8. cognizant reports 8 promising experiments can be scaled quickly, particularly on a cloud-based enterprise digital marketing platform. Rebuild the Foundation with Integrated Digital Asset Management As CG companies and marketers deal with the continuing digitization of the consumer experi- ence, they will benefit from robust digital asset management (DAM) (see sidebar). Without solid DAM capabilities in place, marketers will find it challenging to prevent unnecessary duplication, ensure quality of content, improve interactions with consumers and control production costs. DAM also helps marketers manage all assets cen- trally, thus addressing the collateral fragmentation that is rife at many CG companies. DAM platforms have advanced to a level where it is possible to publish content on social channels directly. One CG company we worked with leveraged a DAM solution to support ”brand books” to ensure its creative, content and marketing functions all have the same look and feel across traditional and digital agencies, production companies, social media outlets and other myriad partners. Simi- larly, a large sales organization that we advised replaced its three-inch binders of printed sales materials with a tablet-based, DAM-enabled solu- tion that allows marketing to tailor messages by customer and geography. The sales team appreci- ated having the latest content at their fingertips. The changing digital marketing landscape has had a significant impact on agencies. A recent CMO Council survey reveals that a majority of traditional advertising agencies have failed to evolve their capabilities to service the digital marketing needs of their clients. Marketers must, therefore, rethink their approach to media buying to find partners suited for designing, building and distributing customized content. Retool Team Talent Very few companies understand how to harness the power of digital marketing, largely due to the significant shortage of talent16 well-versed with digital marketing (see Figure 8). Similar implications exist for analytical capabilities. DataXu reports that more than half of the respon- dents (300-plus) it surveyed said their companies struggle to analyze the large amounts of data generated from their digital marketing initiatives. It further identifies the lack of analytic skills and appropriate software/technology as top factors affecting respondents’ abilities to develop and act on insights informed by marketing data in real-time.17 Companies that build the right talent and analytics capabilities will find it easier to pull ahead of the competition. CG companies are looking to indus- The Top 10 Most Difficult Marketing Positions to Recruit 1. Executive Creative Director 2. Partner / CEO / Managing Director 3. Chief Technology Officer 4. Strategist / Planner 5. Director of Technology 6. User Experience Designer 7. Mobile Developer 8. Creative Director 9. Account Director 10. Chief Sales / Marketing Officer Source: Society of Digital Agencies Figure 8 Quick Take Benefits of Digital Asset Management • Agility: Helps CG companies achieve faster time-to-market schedules by sharing and using marketing material across appropriate markets. • Efficiency: Enables consistency in marketing-related activities; improves the speed of execution and efficiency. • Measurability: Makes it easier to track usage of assets across channels and provides data that enables marketers to understand the effectiveness of the assets. • Cost savings: Marketing materials can be rapidly vetted and approved for campaigns and quickly and cost-effectively pushed into the market.
  • 9. cognizant reports 9 tries with deep analytics capabilities, recruiting from universities with strong analytics programs and, in some cases, partnering with a third party to deliver analytics and insights as a service. Rethink the Organization Companies must enable partnerships among cross-functional teams to ensure consistent yet differentiable and valuable digital experiences for consumers across channels. However, many companies lack the necessary talent. Companies need to build talent well-versed in digital, either through training or acquisition. As technology becomes the key enabler of a successful marketing strategy, the case for symbiotic collaboration between marketing and IT is emerging more strongly. The IT function should be repositioned as a strategic partner to advise on and deploy key mar- keting technology compo- nents (see Figure 9). This collaboration starts with improved CIO/CMO collaboration. CIOs need to expand their role from a focus on IT costs or process enablement to being a thought leader on As consumers increasingly embrace a “digital life,” they will continue to seek more convenient, interactive, personalized and value-added experiences from digital channels. It is impera- tive, therefore, for consumer-facing companies to invest in new digital marketing capabilities, talent and tools to build nimble, fast and efficient marketing organizations to deliver such brand experiences to their customers. The goal of digital marketing is to create consis- tently relevant and authentic interactions with consumers, regardless of time and place. The emerging marketing capability model is designed to provide consumers with a seamless experi- ence across marketing channels, through retail- ers, in-store and online. In our experience, the first challenge is to understand current digital/ social activity, investment and metrics across the business. This can be difficult because spending data is often held by third-party agencies, and detail is difficult to achieve. However, conducting this baseline will provide a fact-based view into Two Budgets For Marketing Technology Total enterprise spend Marketing budgets (split between marketing and IT department) Marketing budget* Print Direct mail, branding and advertising IT budget* Total enterprise spend Acquisition drivers Display, e-mail marketing, online ads, search, affiliation Digital channels Social media, mobile marketing, Web site design Digital platforms CRM, collaboration software, sales force automation E-commerce 8% of IT budget allocated to marketing applications** * Forrester estimates that IT and marketing budgets are approximately 5% of total enterprise spend. ** Forrester estimate Figure 9 Source: Forrester Research As technology becomes the key enabler of a successful marketing strategy, the case for symbiotic collaboration between marketing and IT is emerging more strongly. using social, mobile, analytics, cloud and big data to drive top-line sales. As a first step, CIOs could conduct an assessment of the CMO’s digital mar- keting landscape, identify areas for scale econo- mies to reduce nonworking costs and improve speed to market. The Goal: Reinvent the Consumer’s Brand Experiences
  • 10. cognizant reports 10 The biggest challenge is engaging marketers and agencies in the change. This is similar to the level of change experienced when media buying was pulled from agencies and consolidated into buying services. That move provided brand own- ers with reduced nonworking costs and improved flexibility. The most difficult part of the digital marketing transformation is getting started. nonworking spend – something that will likely get the CMO’s attention. The second challenge is to develop the right digital/social target capability architecture and strategy. A wide range of options exists, from building an on-presence platform, to engaging a third-party cloud services provider. Each approach presents pros and cons. Creating a strategy is straightforward; implementing it is not. Footnotes 1 “Mid-Year 2012 CTIA Wireless Industry Indices Report Now Available,” CTIA, November 2012, http://blog.ctia.org/2012/11/15/mid-year-2012-ctia-wireless-industry-indices-report-available/. 2 “Cell Phone Activities 2012,” Pew Internet, November 2012, http://pewinternet.org/Reports/2012/ Cell-Activities/Additional-Demographic-Analysis.aspx?view=all. 3 Chris Barry, Rob Markey, Eric Almquist and Chris Brahm, “Putting Social Media to Work,” Bain & Co., September 2011, http://www.bain.com/publications/articles/putting-social-media-to-work.aspx. 4 Elliott Lemenager, “Tapping into Social Gaming,” Microsoft Corp., September 2011, http://tag. microsoft.com/community/blog/t/tapping_into_social_gaming.aspx. 5 The report is based on a survey of 253 marketers from U.S.-based companies. “Key Findings From U.S. Digital Marketing Spending Survey, 2013,” Gartner, Inc., March 2013, http://www.gartner.com/ technology/research/digital-marketing/digital-marketing-spend-report.jsp. 6 “Internet Ad Revenues Again Hit Record-Breaking Double-Digit Annual Growth, Reaching Nearly $37 Billion, a 15% Increase Over 2011’s Landmark Numbers,” Internet Advertising Bureau, April 2013, http://www.iab.net/about_the_iab/recent_press_releases/press_release_archive/press_release/ pr-041613. 7 Shopper marketing provides actionable insights into how target consumers behave as shoppers in different formats and channels all along their path to purchase. 8 “Shopper Marketing 4.0: Building Scalable Playbooks That Drive Results,” GMA and Booz & Co., 2010, http://www.gmaonline.org/downloads/research-and-reports/Shopper_Marketing_4.0.pdf. 9 Chris Barry, Rob Markey, Eric Almquist and Chris Brahm, “Putting Social Media to Work,” Bain & Co., September 2011, http://www.bain.com/publications/articles/putting-social-media-to-work.aspx. 10 “Marketing in the Digital Age; Winning with Data & Analytics,” DataXu, 2012, http://www.dataxu.com/ marketing-in-the-digital-age-the-analytics-advantage-2/. 11 “Breaking Bourbon News: The Public Spoke, Maker's Mark Listened - Returning To Original Formula,” Forbes, February 2013, http://www.forbes.com/sites/larryolmsted/2013/02/17/breaking-bourbon-news- the-public-spoke-makers-mark-listened-returning-to-original-formula/. 12 “Which Smartphone Apps Do Savvy Shoppers Use Most?” Nielsen, August, 2012, http://blog.nielsen. com/nielsenwire/online_mobile/top-mobile-shopping-apps/. 13 “Integrate to Accelerate Digital Marketing Value,” CMO Council, 2012, http://www.cmocouncil.org/ images/uploads/245.pdf. 14 “New Survey Reveals Biggest Challenges Facing CMOs Today,” Aprimo, May 2010, http://www.aprimo. com/WorkArea/DownloadAsset.aspx?id=603.
  • 11. cognizant reports 11 15 “Marketing in the Digital Age; Winning with Data & Analytics,” DataXu, 2012, http://www.dataxu.com/ marketing-in-the-digital-age-the-analytics-advantage-2/. 16 “Big Data: The Next Frontier for Innovation, Competition, and Productivity,” McKinsey Global Institute, May 2011, http://www.mckinsey.com/Insights/MGI/Research/Technology_and_Innovation/Big_data_ The_next_frontier_for_innovation. 17 “Marketing in the Digital Age; Winning with Data & Analytics,” DataXu, 2012, http://www.dataxu.com/ marketing-in-the-digital-age-the-analytics-advantage-2/. References • Roxane Divol, David Edelman and Hugo Sarrazin, “Demystifying Social Media,” McKinsey & Co., April, 2012, http://www.mckinseyquarterly.com/Demystifying_social_media_2958. • “Marketing Optimization in the Digital Age,” ThinkVine Corporation, February 2012, http://www. marketingpower.com/ResourceLibrary/Documents/Whitepapers/ThinkVine%20Whitepaper.pdf. • Katharine Sayre, Vaishali Rastogi, Paul Zwillenberg, Jody Visser and Alannah Sheerin, “Marketing Capabilities for the Digital Age,” BCG Perspectives, January 2012, https://www.bcgperspectives.com/ content/articles/marketing_branding_communication_marketing_capabilities_for_digital_age/. • Peter O'Neill, “The Emergence Of The Digital Marketing Service Provider,” Forrester Research, Inc., January 2012, http://www.forrester.com/The+Emergence+Of+The+Digital+Marketing+Service+Provi der/fulltext/-/E-RES61168. • Bertil Chappius, Ewan Duncan, Brendan Gaffey and Kevin Roche, “The Next Stage: Six Ways the Digital Consumer is Changing,” McKinsey & Co., 2012, http://csi.mckinsey.com/Home/Knowledge_by_region/ Americas/Six_digital_trends.aspx. • “The 2012 Digital Marketer: Benchmark and Trend Report,” Experian, 2012, http://go.experian.com/ forms/experian-digital-marketer-2012. • Pat Conroy, Chris Weitz, Anupam Narula and Alan Langhals, “Rethinking the Role of IT for CPG Companies,” Deloitte, 2012, http://www.deloitte.com/assets/Dcom-UnitedStates/Local%20Content/ Articles/Consumer%20Business/Consumer%20Products/us_cp_rethinkingtheroleofIT_042512.pdf. • “How You Can Meet Your Top Marketing Priorities with Digital Asset Management,” Widen, 2012, http://www.widen.com/wp-content/uploads/2012/07/Marketing-Priorities-2012-WhitePaper.pdf. • “A Marketer’s Guide to Analytics,” SAS, 2012, http://www.sas.com/resources/whitepaper/wp_21118.pdf. • Marketing Analytics, IBM, 2012, http://www.ibm.com/smarterplanet/us/en/smarter_marketing/article/ marketing_analytics.html. • “The SoDA Report 2012,” The Global Society for Digital Marketing Innovators, 2012, http://www. slideshare.net/sodaspeaks/the-soda-report-11690932. • Matthew Egol, Andrew Clyde, Kasturi Rangan and Richard Sanderson, “The New Consumer Frugality: Adapting to the Enduring Shift in U.S. Consumer Spending and Behavior,” Booz & Co., 2010, http://www.booz.com/media/uploads/The_New_Consumer_Frugality.pdf. • “CMO Council State of Marketing 2010,” CMO Council, 2010, http://www.deloitte.com/assets/ Dcom-UnitedStates/Local%20Assets/Documents/us_consulting_CMOCouncil_050510.pdf.
  • 12. About Cognizant Cognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business process outsourcing services, dedicated to helping the world’s leading companies build stronger businesses. Headquartered in Teaneck, New Jersey (U.S.), Cognizant combines a passion for client satisfaction, technology innovation, deep industry and business process expertise, and a global, collaborative workforce that embodies the future of work. With over 50 delivery centers worldwide and approximately 162,700 employees as of March 31, 2013, Cognizant is a member of the NASDAQ-100, the S&P 500, the Forbes Global 2000, and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world. Visit us online at www.cognizant.com for more information. World Headquarters 500 Frank W. Burr Blvd. Teaneck, NJ 07666 USA Phone: +1 201 801 0233 Fax: +1 201 801 0243 Toll Free: +1 888 937 3277 Email: inquiry@cognizant.com European Headquarters 1 Kingdom Street Paddington Central London W2 6BD Phone: +44 (0) 207 297 7600 Fax: +44 (0) 207 121 0102 Email: infouk@cognizant.com India Operations Headquarters #5/535, Old Mahabalipuram Road Okkiyam Pettai, Thoraipakkam Chennai, 600 096 India Phone: +91 (0) 44 4209 6000 Fax: +91 (0) 44 4209 6060 Email: inquiryindia@cognizant.com ­­© Copyright 2013, Cognizant. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the express written permission from Cognizant. The information contained herein is subject to change without notice. All other trademarks mentioned herein are the property of their respective owners. Credits Author and Analyst Aala Santhosh Reddy, Senior Research Associate, Cognizant Research Center Subject Matter Expert Johan Sauer, Assistant Vice-President, Cognizant Business Consulting, Consumer Goods Practice Design Harleen Bhatia, Design Team Lead Suresh Sambandhan, Designer