Bridging the Marketing Confidence Gap | BTalk Australia

(19min 33) Why, when so much time is now spent online, are we not seeing digital media getting its fair share of the total marketing spend? Kent Wertime, Asia Pacific President for OgilvyOne, says it’s to do with our understanding and experience of the medium.

Phil Dobbie talks to Kent in today’s BTalk Australia and asks why we’re not seeing a high degree of creativity in digital advertising. Are agencies as much to blame as clients for missing the opportunity?

What do you think? Why does the Confidence Gap exist? Share your views in the Talkback section at the end of this post.

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• Today’s Transcription

Phil Dobbie: Hello I’m Phil Dobbie and welcome to BTalk Australia. Today: bridging the digital marketing confidence gap. Kent Wertime is the Asian-Pacific President for interactive marketing agency OgilvyOne. He’s worked with dozens of blue-chip clients advising them on their digital marketing and he’s got a couple of books behind him as well. First, Building Brands and Believers and now his new book, which he’s here to talk about, DigiMarketing. Now Kent, digital marketing is still surprisingly an unknown area for a lot of people in business, isn’t it? Why is that do you think?

Kent Wertime: I just think because it’s a vast and growing territory. I mean this is not like the old days of advertising when you had a few channels to think about and you know a number of main issues in focus. Because everyday you have new opportunities. There’re inventions everyday. There’s new technology and I think it’s you know a fairly complicated space. There’s a lot that can be done, which makes it so exciting, but there’s a lot then that needs to be learned and understood. So you know I think it’s not illogical in a way that it takes time to learn about digital and be comfortable with digital marketing.

Dobbie: But are the people in these marketing roles, or in senior management roles, are they really taking the time to learn or are a lot of them stuck in their ways? I mean because it’s too complicated and you know maybe their in the twilight of their career and it’s too much effort?

Wertime: You know, I think there are a lot of people that are very interested and I think most marketing people are by nature curious and want to learn new things. So I often find people that simply are looking for ways to find out how to learn and who to turn to to fast forward that knowledge. You know you do meet a spectrum of people these days. There are people in the business perhaps as you’re suggesting near the end of their career who you know don’t really have much of an interest in this area just because they don’t like it. Perhaps they feel that they’re just out of their depth. But you know the younger people in the business they come in as digital natives so they in fact don’t need to be taught it because they live it. You don’t need to get up and talk to a bunch of 25-year-old marketing executives about the importance of digital because that’s what they do every day already. I think it’s the middle ground of management. People have been in their roles who perhaps grew up in a day when digital was not at the forefront, who are in reasonably senior positions, who need to make this transition and they’re the ones who often feel a bit squeezed and a bit frankly nervous about you know learning new things or getting caught out by not knowing enough in front of their bosses.

Dobbie: And what about ad agencies? I mean often people criticise ad agencies for not moving into the digital space fast enough, perhaps because they’ve got too much vested interest in earning commissions from established media or again because they just don’t understand it. Is that fair criticism?

Wertime: It can be. I wouldn’t say it’s universally fair. I think they’re certain agencies, and I won’t name them because I don’t want to point fingers, that have you know moved slower about this and are not really committed to it or simply see it as a new revenue opportunity rather than really believing that this is the right thing to do or is the wave of the future. But I think there are other agencies that are working very hard to understand it, to share knowledge with clients, to invest behind it. So again I think we’re in a period right now, both on the agency side and the marketers side, where there’s a huge spectrum of interest, knowledge and commitment and I think if you fast forward another five, certainly 10 years, that that shift will by and large have happened simply because it will have to because the market continues to move. But we’re right now in this transitional period and transitions of this size and scope, given the importance of digital and really the size of digital in people’s lives, it takes time. You can’t expect it to happen in sort of a neat 12 to 18 months.

Dobbie: Can digital do everything though that established media does? For some products, you know, you’ve got to agree TV can do a good job. You know you’re not yet at the stage I don’t think where an online brand ad will attract the same attention as being stuck on the sofa in the middle of a compelling TV show with a powerful image ad, which is shown on your big high-definition TV that you’re forced to watch because you’re waiting for the next segment in the show. You know it’s difficult to replicate that power online, isn’t it, as yet?

Wertime: I’m not sure if I totally agree. I mean the starting point is I don’t hate advertising. I did advertising for the first 13, 14 years of my career and I still love a great 30-second TV spot. But today with the Net, in so many places where you have broadband that allows for really rich interaction, you can show a 20-minute video. You can show a mini movie. I mean there’re brands that have come out with amazing involving mini movies that frankly are much more engrossing and intriguing than simply the 30 seconds and you’re out of there. So I think in the sense that people assume that digital still means largely blinky banners or text-driven websites, you’re right. It’s kind of hard to put a page of print in front of somebody digitally and says it’s as exciting as film but it’s not when you say digital today is 20 minutes of video on your screen around a mini movie as compared to 30 seconds on your couch. So I wouldn’t necessarily agree with that today.

Dobbie: I guess part of the problem is though when people do start moving into video online they tend to, rather than being creative and looking at the medium for it’s own merits, look at it as an extension of their mainstream TV campaign and perhaps just run a version of that online, which might make sense in terms of familiarity — you’re getting repetition of the message — but you might not be using the media to it’s best advantage by doing that.

Wertime: I totally agree with you. I think that we’re in a period right now where people are realising they have to commit to video content that is purpose-built for the web rather than simply easy repurposing of TV commercials. But again it takes time. But you’re thesis, I believe, is absolutely correct.

Dobbie: And the other part as well — online is very labour-intensive isn’t it? I mean the hours involved in for example building alternate sites or producing those lengthy videos, different creative executions, maybe creating blogs, twittering, analysing, refining as you go … that takes a lot of time. So you think what we’re doing is we’re transferring the money that’s been spent by media and you know a lot of it’s being transferred to people hours, isn’t it? Do you think that’s the trend?

Wertime: That’s a good point, yes. I think amongst other things what a lot of advertisers and agencies are trying to get their heads around is the pricing of digital in the total sense. So when you do a digital campaign what should it cost? What kind of manpower does it really take and how do the economics play out? I wouldn’t say though that it’s necessarily going to be labour-intensive. It can be. It depends upon what tools you’re using for example in terms of analytics, which may be today obviously most of them are algorithm base and they allow you to do a fair amount of analysis automatically. But there still needs to be that human element though and I think that one of the mistakes people make is assuming that digital is going to be easy and cheap. It’s not necessarily. It can still, even with the various costs involved, be more efficient in the end, depending upon what people are doing. Are they simply trying to create an impression or are they trying to acquire a customer or are they trying to acquire a qualified lead that basically hand-raises up to a certain point? It really depends upon what you’re doing with digital to then work it back to say economically this is a better alternative than some of the other things out there.

Dobbie: I think the point I was trying to make is if you relied purely on TV, ok, you’ve got the expense of making a high-class television production but you tend to only make one or two and you try and pretty much a scattergun approach with that. You’re trying to get to as many people as possible.

Wertime: Sure.

Dobbie: If you’re using the digital medium well then you probably have a number of different creative executions and that all takes a lot of time if you’re going to do it well and it’s hard.

Wertime: It can but equally you may create a content website that requires content updating from some people on a regular basis but actually doesn’t require entire recreating very often at all. So it just depends. It can be very labour-intensive and to do good work is not easy in digital. Just like it’s not easy to do good work in TV. It really requires qualified people spending sufficient time to really look through it and make it good, not just good, make it great and go that extra mile. So there is a misperception at times that you know somehow digital makes it easier. It does require labour but it doesn’t necessarily mean in every case more labour-intensive than some of the things that are required to do. I sat on TV shoots that have involved ultimately hundreds of people so that can be quite involving too, depending upon the nature of the shoot and what you’re doing as a campaign.

Dobbie: Now you mentioned the area of expertise and I know with programs like Photoshop, software programs like Photoshop started to decrease in price then all of a sudden everyone believed that they could design their own print ads. And I think there’s a lot of people who think you know well we can design our own online campaigns as well. Do you think that’s holding back a lot of companies? They really have you know a fairly amateur approach to what they’re putting out there.

Wertime: Yeah, I think so, because part of the problem is that they really look at the cost of creation of content or material as compared to total effectiveness. So you can say well I’m going to save myself a certain amount of money by doing it on my own but you may be you know 50 percent less effective at acquiring the customer you wanted to acquire than if you paid somebody a bit more to do it. So it depends upon which lens you’re using in evaluating cost. Is it the cost simply of production or is it the total cost in effectiveness of the program that you’re doing?

Dobbie: So what would you say the key points you should be considering for any business who wants to get more out of building customer relationships using online? What are the strengths of online that you can really leverage?

Wertime: The central strength really is the whole notion of addressability. The fact that digital channels allow you, if you are looking and keeping track and doing the right things, to understand individual customers, to be able to collect data, to be able to collect their preferences which they self-indicate sometimes through choice and they also self-indicate through action and to then be able to better tailor offers material relationships to those individuals. That’s really the central benefit of a one-to-one media or medium versus you know traditional broadcast media. The efficiency comes now today through the digital technology which means incident response. It means cost to service is quite low. It means the data capture and the data analysis can be very, very fast because you’re using technology to deal with technology. I think at the centre of it is really the understanding of consumers and data because data is both the fuel and the byproduct of digital marketing. And what I find very interesting because again I’ve spent years of my early part of my career doing TV advertising, doing brand advertising, is that a lot of marketers who never did traditional direct marketing or direct mail don’t realise that as they’re doing digital marketing today they are doing direct marketing. They are direct marketers. But they don’t think of themselves that way. They think of themselves as you know perhaps people who’ve made a transition from doing TV advertising to doing some digital as compared to realising they’re now in the direct marketing area when they’re dealing with their customers. And that means understanding more than just technology. It means understanding one-to-one and how you actually deal with individual customers.

Dobbie: My observation coming to Australia (might have changed now because it was a long time ago) is that Australia really was a little bit behind the eight ball when it came to direct marketing. You know there was perhaps it was a factor the size of the population here. Do you think, so it would make sense logically that perhaps that skill sense is not transferring as it might to digital marketing as well. Are you seeing that?

Wertime: I think it’s a possibility. I’d have to really turn to the professionals that have lived in this market for years and years to make that determination whether it’s been slower than others. I think in some ways obviously Australia is very sophisticated and is doing a lot of interesting things so I wouldn’t say it’s necessarily behind. I do know that some marketers believe that there’s more that the Australian marketers can do than they’re currently doing with digital. And the truth is that’s the challenge everywhere, even in leading markets. I mean I work across the region so I travel frequently to places like Korea and Japan and you’d be surprised even in a place like Korea which is incredibly digital in terms of the use of technology and the sophistication. It doesn’t necessarily mean that the marketers are sophisticated in digital marketing. In a lot of cases they do vary but now offer driven marketing and they don’t necessarily use the full power of the technology. So you know it’s interesting today, again because things are moving so quickly in digital, to see how marketers in different nations are at deploying that technology to do better marketing as compared to just using technology for technology’s sake.

Dobbie: I guess people are finding it hard to get that balance between the analytics that you spoke about earlier and the creativity as well. You know one could stifle the other, can’t it?

Wertime: It can if you set them in opposition but if you go into it with a fundamental belief that great creative is more effective and that by understanding what people are responding to you can get insights about better creative, then the two don’t have to be seen as being at odds. In fact within agencies today I’d say you’ve got traditional advertising people who grew up believing that the idea was central to everything and you’ve got perhaps younger digital people who focused much more on the analytics than the numbers. And both sides tend to offset each other and feel that the other side doesn’t fully understand. And I think the reality is it’s both. It’s not a matter of one side versus the other. In today’s world great creative still very much matters in a digital realm. You still have to charm people and fascinate them. Creative ideas and stories are what people love. I mean whether it’s in a digital format or an analog format it’s irrelevant. It’s what people respond to. At the same time you do have the ability today to say, well, what stories get human response? Because I think at the end of the day this isn’t about watching. It’s about participating and engaging. It’s about clicking, behaving, adding to, commenting, sharing and you can use that analytical power to see which types of humans and which type of creative do that best, but I don’t see them as being at odds.

Dobbie: That creativity I don’t mind personally if I don’t see the creativity that we see attached to TV campaigns. Most of the time I don’t see that creativity coming out in the digital world. I think we’ve still got, for whatever reason it might be whether it’s with a client or with the agency, there’s a big opportunity there which is just being wasted, isn’t there?

Wertime: You could say it’s wasted or you could say it’s the opportunity of the future that will be exploited. I mean if you look at the sweep of time, go back 10 years. I mean 10 years ago of course there was digital and there was the internet but you know search marketing really wasn’t known and wasn’t used. You had basically, 12 years ago, you had about two-thirds of the people on the internet were just in the United States. It wasn’t even a truly global phenomenon as compared to today where you know only 17 percent of people online are actually in the US and the rest is all around the world in huge numbers. So you know the world has changed dramatically in 10 years and I look for in another 10 years, I project out 10 years where today again people 3.3, 3.4 billion people have mobile devices, many of which now are starting to be able to use video. So you know project that forward 10 years and you’ve got 10 years of amazing opportunity to create great new things and do great works. So I sort of feel more that we’re at the cusp of a real creative revolution in digital rather than feeling that it’s underwhelming. I think we’re going to see a lot of interesting stuff over the next five to 10 years.

Dobbie: Ok, very briefly, you’ve been using this term at OgilvyOne: the marketing confidence gap. Can you give us a definition of what the marketing confidence gap is?

Wertime: Well, it’s very simple. It’s just the gap between the amount of money advertisers are spending online and the amount of time people are spending online and what we see is because the shift of people’s time has been so fast and so dramatic you know really large chunks of their time and their day to digital channels that you would say it deserves to have much larger chunks of the advertising spend. In truth around the world over the last five, six years there’s been a very constant growth of a percentage of digital as part of the overall advertising mix. However, that percentage hasn’t kept up with the movement of consumers so that gap between the two is really what we’ve called the confidence gap, in the sense that in a perfect world there shouldn’t be a gap. Marketers would say if this is where people are spending, you know, 50 percent of their time, gee, maybe I should be thinking about spending more of my budget to reach these people because that’s where they are. And in truth marketers haven’t, and this is not universal again for all marketers. There’re some marketers who have been making much more dramatic shifts in their funding and their focus on digital but as a whole we still have that gap. And I think that gap will close over time. Again back to the earliest part of our conversation as more young marketers come through the ranks that just instinctively understand and believe in digital and as more marketers who perhaps are more senior also realise as they look at these numbers that it’s simply too provocative a story to be funding with you know a very small portion of their budget as a kind of experiment as compared to massive mainstream which is today.

Dobbie: Kent, thanks so much for your time and good luck with the new book which is, it is a book isn’t it? It’s published in old fashioned paper and ink. You’re letting the side down, aren’t you.

Wertime: It is, but you can also go to the website so, as with most things today, it’s both.

Dobbie: I’m pleased to hear it. And we should say that just in case everyone is thinking, gee they’re a noisy bunch at OgilvyOne we’ve actually caught you at Sydney airport just about to fly back to Bangkok.

Wertime: Sadly I’m leaving, but I look forward to returning sometime soon.

Dobbie: Thanks for your time, Kent.

Wertime: Certainly. Thank you.