New research from Adobe and the CMO Council confirms skill shortages and budget constraints are holding back digital and business transformation in Australia and across Asia Pacific.
While the research shows confidence in the value of digital marketing is growing, marketers are struggling to validate investment and build a business case.
The Adobe APAC Digital Directions report is a deep-dive into strategies, mandates and challenges in digital marketing and is a companion piece to Adobe’s ongoing Digital Marketing Performance Dashboard. The new research reveals findings based on data collected from 648 respondents in Australia, South Korea, China, Hong Kong, Singapore and India.
At a time when marketing is fast becoming the catalyst for business transformation and customer engagement optimisation, Australia’s marketers are still largely focused on single vector metrics that measure past success or single campaign performance only. They are typically not measuring the impact of harder business metrics such as sales pipeline performance or customer lifetime value.
Instead, in Australia, few respondents said they measure business value metrics, with just 16 per cent measuring revenue per customer (a significant drop from 36 per cent in 2013), 15 per cent measuring customer lifetime value and 16 per cent measuring market share movements. Instead, they are focusing on more basic metrics with 70 per cent of Australian respondents measuring click-through rates, 49 per cent measuring campaign ROI, and 73 per cent measuring response rates.
The research showed marketers who measure business value metrics spend a higher proportion of their marketing budget on digital, and are almost twice as likely to allocate more than 50 per cent of their budget to digital than marketers who don’t measure the same metrics (19 per cent vs 10 per cent). Similarly, marketers who track business value metrics have higher levels of confidence in digital than their non-measuring peers (75per cent vs 59 per cent), are more likely to say that digital can grow a profitable business faster (45 per cent vs 33 per cent) and are less likely to say they struggle to make a business case for digital spend (31 per cent vs 40 per cent).
“Adobe and CMO Council have been tracking the digital journey of APAC’s marketers since 2011. We have also worked with many companies to successfully transform their operations, teams, technologies and strategies as they consolidate digital channels to deliver unified, exceptional customer experiences,” said Paul Robson, president, Adobe Asia Pacific.
“Digital and business transformation is a complex and challenging task, but the rewards are great. Early adopters in Australia are leading the region in digital marketing proficiency and are able to prove value to their organisations and industries. These companies are using customer intelligence in an insightful way and are leading with data. They are raising the bar by measuring, predicting and using insights across multiple channels to create relevant and personalised experiences to satisfy customers.”
Liz Miller, vice president of marketing at CMO Council, agreed. “Digital has truly come of age. Australian respondents are confirming that digital enables additional touchpoints (68 per cent), delivers more cost-effective customer acquisition (51 per cent), improves customer loyalty (41 per cent) and improves the overall customer experience and responsiveness (34 per cent). The challenge now, is to turn our attention to extracting greater value and insights from data to provide ideas and knowledge that improve product, services and customer engagement and provide the foundations for a stronger internal pitch to boost investment and resourcing.”
The report recommends three digital imperatives for APAC marketers to adopt to accelerate their digital journey.
- Optimise strategies for engagement and enablement by diving deeper into intelligence, insights and customer analytics. Best practice leaders in the region are demonstrating this by integrating tools that help streamline operations, and rolling out new strategies that leverage online and offline data to create smarter experiences.
- Boost team performance and skills. The talent gap consistently manifests as a major obstacle to digital advancement. In 2013, 37 per cent of marketers across Asia Pacific said their agency’s capabilities and experience were holding them back. In this latest survey, that number has jumped to 47 per cent of respondents, which is especially problematic when you consider that 74 per cent of respondents said they were working with one or more digital agencies across the region.
“Digital Directions clearly underlines the growth and importance of digital marketing not only within our clients, but across the broader range of APAC companies that are serious about their future marketing needs,” said Doug Chapman, managing director, Razorfish.
“Increased investment in skills development will ensure the APAC marketing community can better leverage the data they are collecting and drive business transformation.”
- Allocate around a customer-centric business case. Digital budgets are slowly increasing in Asia Pacific, with 78 per cent of respondents saying they have increased budgets over the last 12 months. Marketers who leverage metrics tied to the bottom line, profitability and growth, are having greater success persuading internal stakeholders to increase their investment in digital.
“The data is there; now it’s up to the marketers of Asia Pacific to apply it to drive business growth, and demonstrate the value of their function,” said Robson.