How Digital Marketing Is Destroying Your Business Comment Now Follow Comments I’m always up for a good Lewis Black-style rant. So pretend that I’m practically shouting this to you in his inimitable I’m-about-to-have-a-stroke way. Digital Marketing, and its current volume-based practices, are just about the worst things you can do for your business—from startups to mature brands, from C2C to B2B. And yet, so many seasoned executives and young entrepreneurs are continuing time-wasting, mindshare-sucking practices that provide little RoI. I’ll admit that I was provoked into this diatribe by a recent conversation with a digital marketing peer of mine at another startup. She laid out her strategic vision for 2015, and everything to me seemed to be about raising “awareness” and other digital marketing pablum of the day. In short, doomed to fail in terms of helping her company’s bottomline. In a world where everyone is digital marketing-crazy there is a certain majesty to being the salmon that swims against the stream. Yes, you may get eaten by a bear, but you also get to spawn. So what are the most prevalent practices afflicting digital marketing? According to Gartner “the four most recognized techniques of digital marketing are social, mobile, analytics and digital commerce.” I would term these “volume-based digital marketing,” meaning that their goal is to appeal to as many people as possible for as low a presumptive cost as possible—quantity over quality. Going a bit more granular, these represent the following three failed techniques: 1) Mobile & Digital Ad Spend (PPC ads)—clickthrough rates are around 1 per 1000 (0.11%) 2) Paid-for SEO & Related Techniques—eBay conducted a thorough study on this and found the “efficacy of SEM is limited” 3) Paid Social Media—again clickthrough rates are around 1 per 1000 (0.11%) So what am I caveating out of this? Specifically, content marketing and inbound-related techniques, websites and brand collateral, email marketing to existing databases, media, partnership and relationship marketing, organic SEO, and event marketing. These elements of marketing still have digital components, of course, but they are based less on volume and more on handing targeted brand stories to users. Ultimately, they may be more expensive as a single unit, but more effective in turning strangers to prospects and prospects to clients—in short, their RoI is better in the long run. English: Comedian Lewis Black performs at the ... Can Lewis Black Save Us from Digital Marketing’s Tyranny? In a separate issue we can discuss the somewhat questionable merits of micro-content and paid-for internal SEO on social media (e.g. paying for higher search rankings or boosting a post to the top of a news feed). Here I remain a bit ambivalent. And while I’m certainly not advocating that you drop digital in favor of going analog, say “billboards,” there is a certain majesty to being the salmon that swims against the stream. Yes, you may get eaten by a bear, but you also get to spawn. N.B. Analytics and data-driven marketing are important back-end techniques for learning how to segment and test effectively and should be part of any marketing set up. So Why Is Volume-Based Digital Marketing So Predominant? Simple. It’s big business. Depending on who you ask, global marketing dollars are expected to crest above $1 trillion in the next few years. And according to a recent Gartner study, overall marketing budgets as a percentage of revenue were 10.7% in 2013 and expected to increase by 8% in 2014. With digital marketing budgets as 3.1% of revenue and expected to increase by 10% in 2014. Digital advertising at 12.2% is the largest percentage of marketing budgets with other spend heading towards mobile marketing, digital commerce, etc. And because it’s big business, those that market the products related to it have influenced those of us (end-users) that it’s what we need to be successful. Older marketers did it to remain current, and younger marketers continue to do it because it’s what they grew up with—table stakes, as it were. But in reality, this grand experiment of digital marketing has failed to provide its promised RoI. To another extent, it’s also optically simpler and less staff-intensive. Yet, marketers spend extensive time strategizing, analyzing and crafting around these volume-based plays. And in the end, this mostly “automated” technique is a handoff to systems out of your control that create a blackhole for your message. And with so little value-add much of that “planning” is wasted effort that ought to be redirected elsewhere. A Quick History Lesson Page 1 / 2 Continue 15 comments, 2 called-out Comment Now Follow Comments Print Report Corrections Reprints & Permissions Post Your Comment Please log in or sign up to comment. Enter Your Comment Forbes writers have the ability to call out member comments they find particularly interesting. Called-out comments are highlighted across the Forbes network. Youll be notified if your comment is called out. Comments Called-Out Expand All Comments Follow Comments Corey Weiner Corey Weiner 1 month ago My favorite part of your article is the history lesson :) I speak about this subject matter all the time here: youtube/teethmarcom You are dead on – but the same reason you have a lot of guts publishing this perspective is the same reason most marketing clubs/associations and magazine editors will not publish such blasphemy – because it’s easily digested by the masses of advertisers. What’s the American way? ‘oh, I can click buttons all day and lease software and make money doing nothing? Where do I sign up for this?” Response rates are awful. Beyond that, as you so brilliantly allude to above – human being decision-making psychology and consumer behavior has NOT changed over the last 40 years. That consumer’s access to cheap electronic widgets and internet has, but their fundamental risk-reward and behavior has not. Marketers selling things will claim otherwise, however, hard science is more truthful and objective. Of course there is a smarter, just as inexpensive idea. Only it takes human brainpower and experience to implement. :) Unfortunately for a lot of orgs, those tasked with managing their advertising like to follow trends and metaphorically “pier fish” for new business/sales demand digitally. Big companies have some much revenue and moving parts, it takes two fiscal quarters or longer for anyone to notice. :) I acquire almost four of five b2b advertising clients only AFTER they invest in some SEO/digital marketing agency and lose money. Then fail at design and implementing their own in-house. Then, finally, they arrive at the conclusion what you speak of is dead on accurate – very hard for most to see return on invested capital for digital advertising. Steve Jobs is a great example. I used to have a YouTube video of him speaking at a tech forum about how many ad/marketing agencies Apple burned through who couldn’t sell computers – because the web is “noisy” as he put it. Great article and I look forward to your follow-up. Corey Weiner, Copy Editor, Advertising Troubleshooter published by Yahoo! Business, Sales & Marketing, Forbes Blogger, AllBusiness by D & B and others. Reply Andre Harrell Andre Harrell 1 month ago Great article Neil…and a controversial one! The point is EVERYONE is trying to find where YOU and I are……in other words “The Customer”. The social media explosion has birthed “Digital Marketing” and has gotten a lot of people rich. I do think there’s utility for “Digital Marketing” is just that our use as CMO’s need to be intelligently “Strategically Targeted”….throwing crap up against the wall doesn’t work and is a waste of money. Bottom line, maybe a pull in the reins approach might be the best decision for all this “Digital Marketing” hype. Thanks for the post! ah2andbeyond/business-inertia-can-lead-business-growth/ slideshare.net/aharrell2000/marketing-value-presentation1 Reply Lisa Becker Lisa Becker 1 month ago Hi Neil – You make some good points about the value of content/demand generation marketing in your article which I applaud. This is an area where we’ve had more difficulty proving value and convincing our clients to run with despite the fact that numerous research studies on the topic have concluded that content such as whitepapers, case studies, etc. are consistently considered to be some of the most useful and impactful sources of information during a user’s research and buy cycle. It’s interesting however that you don’t consider content marketing to be under the same umbrella as digital marketing which in fact it most certainly is. Conventional wisdom and research suggests that content marketing is most effective when used in tandem with other forms of paid media (both digital and offline) that direct users to said content whereas they might not have seen it otherwise. I would hate to see the look on my clients’ faces if I were able to convince them to pursue a content strategy only to find that it was getting little to no traffic. Content marketing is really just the tip of the iceberg; there are any number of both digital and offline channels that it takes to really make it successful and to keep a brand or product top-of-mind and I think your article ignores that completely. Beyond content marketing, which I think you’ll agree is a very top-of-funnel form of marketing, I also wanted to add some clarity to your line of thought about paid digital media which it’s clear you don’t have a full understanding of after reading this article. For reference, PPC (pay per click), SEM (search engine marketing) and paid search are all one in the same and what you’re referring to as “paid-for SEO” is actually PPC as well. SEO (search engine optimization) consists of various structural, technical and content strategies for a company’s website which in theory increase its search engine pagerank and push its organic web listings higher up on the page when a user searches on relevant terms. There is no such thing as “paid-for SEO”; you cannot simply just pay a search engine to rank your website higher in the organic search results. The only paid results on an SERP (search engine results page) are the paid search ads that appear on the top and side of the page and are clearly marked as ads. So now that we’ve cleared that up, on to your claims that CTR (click-through rate) averages around .11% and that all digital marketing media is focused on the broadly defined goal of “increasing awareness”. First of all, I’d love to see the source of data which pointed you to the .11% average CTR statistic; this sounds shockingly low to me. While it’s true that the industry average for the CTR on a display display ad to average around .06%, I have never seen a paid search campaign with such low click-through rates and I have managed a great many of them. I think the conclusion you’re seeking to draw with this article is actually based more upon digital display media vs paid search though paid search is the channel that you called out in your article as being ineffective. Digital display media consists of text and image ads that appear on pages you surf across the web from news sites to e-commerce and even to those pesky Gmail ads that appear to the top and side of your email now. This is most certainly a top-of-funnel form of advertising as users are more passively seeing your ads and clicking if in fact they are actually interested. While this form of advertising can in fact be hyper-targeted (geo, demo, behavioral, etc), it does still tend to be more top-of-funnel. The goal of display media can be to increase brand awareness as you noted which would be measured and verified by use of an in-market brand study. However, it can and is also commonly used in a direct response (ie lead generation or e-commerce) campaign though by nature the ROI is never as high as its paid search campaign counterparts. Paid search ads, or PPC or SEM, are the paid listings that you see on the SERP to the top and side of the organic listing results. While most people would claim that they “never click those ads/hate ads”, they actually do or I wouldn’t have a job. I would be concerned if one of my paid search clients’ CTR was much lower than 1% which is a far cry from the .11% you cited. The real value that paid search can offer that no other form of digital or offline media really can is that you see these ads after you’ve already searched for the brand, products or services that a company is offering. In a way, this is kind of like inbound marketing because users are seeking out solutions that your company provides and as a result, the ROI we see here for both e-commerce and lead generation is exponential to that of any other form of trackable media. I don’t spend my time fretting over whether what we’re doing is providing value for our clients because it’s right there in our metrics that we’re generating leads and/or sales. For e-commerce, the value is clear but we do have to take that an extra step for lead-gen clients since we want to ensure that the type of leads we’re generating are valuable. Luckily for us, this is becoming easier and easier to do with the help of tools such as Marketo which can track leads all the way through the sales process and can be attributed back to their original sources. Even luckier for us, there are a number of competing attribution platforms that seek to show the value of all media channels in a consumer’s conversion path be it first click, last click or somewhere in the middle. Also worth noting, there have been multiple tests and research studies done on organic vs paid listing results and the incremental results seen when the two are shown in tandem which I would encourage you to seek out and read. All of that being said, I would just encourage you to take a more holistic view of the digital marketing landscape as a whole and how all of the pieces fit together. Branding does have its place and can be measurable whereas demand generation is obviously measurable via performance metrics and ROI. There is no one channel, content marketing included, that is going to reach consumers as effectively as a multitude of channels that reach users on the multitude of devices they use at different stages in the buy cycle. Try to understand how each channel fits into the whole picture before you conclude that they aren’t worthwhile. Reply Author Neil St. Clair Neil St. Clair, Contributor 1 month ago Lisa, I appreciate your thoughtful response. Your articulation that I should parse between e-commerce and “lead-gen” businesses is well-taken. I’d add that paid-for SEO does exist internally on many sites (esp. e-commerce sites) where you can pay to appear higher in search results. Agreed it doesn’t appear in, say, Google, but you certainly can pay for adwords, display ads and utilize SEO firms that optimize these techniques. I’d counter on one point though: that paid areas of digital marketing support content and help produce greater results. Yes, it may give you more eyeballs, but ultimately, what you really get are a lot of low-quality referrals. I define marketing success in one simple metric–how did this campaign drop to the bottom line. If I pay $25k or more to get a piece of content viewed more often I can maybe get a few “lead gen” conversions from that…maybe. But the reality is, if I produce a piece of content with proper SEO on the back-end that follows the true organic search patterns of most individuals, namely, most folks (in non-ecommerce situations) sit down at a computer and do a google around a specific search string. e.g. “Best Practices for Financial Advisors.” They’re looking for information and education to make an informed choice. Especially true of B2B clients. What this means is that you’ve had to create thoughtful content that will show up on their radar and that has proper back-links, media and other SEO elements around it to ensure it’s top of the Google rank. I’d say that paying for adwords and Google display ads, etc. is a huge waste of money that kills RoI. You can get the same organically from being a thoughtful and meaningful content producer. The rest is just gossamer without validation. Called-out comment Reply Stelios Moudakis Stelios Moudakis 4 weeks ago SEM is a lot more valuable than you give it credit for. Yes, quality content creation is very important; pivotal to organic SEO. And the best content is targeted around a keyword strategy. But how do you know you’re creating the right type of content that’s going to give you then best ROI? Relying on Google’s Keyword Planner to figuring out the right keywords to target your content around is limiting, and often highly inaccurate. Adwords is not my trade, SEO is, but I appreciate the metrics and see the value an Adwords campaign can provide; if you’re dismissing them completely, you’re not fully utilising the tools at your disposal. An SEM data-enriched content strategy is the sure way to get your winnings. Not only do you get an idea on real geographically segmented search volume from Impression/Impression share data, but you can figure out which keywords convert best and then develop rich content for best results; you’ll get just as poor ROI producing content that it’s reaching the wrong audience. Digital is all about experimentation and Marketing is all about integration and intelligent decision making. SEM offers you some great insights that no good marketer should turn down. Also, your Adwords are only going to convert as well as the page your driving your traffic to. If you’re planning on developing quality content for organic SEO, why not experiment on these pages with SEM? Split test them, apply conversion optimisation, find the best converting keywords and you’ve got a solid piece of content that’s tested, backed by data and setup for maximum ROI potential. Reply Alan Brocious Alan Brocious 1 month ago Neil, I enjoyed your rant about digital marketing, the expectations are way off for a lot of customers. Typically those are the ones that read a headline or go with the #7 horse in the 5th race because they know a guy. One thing that is often missed with digital is what do you want them to do when they click? Small, medium and large companies miss that. With any advertising you have to define the goal and standing on a soapbox trying to get noticed (aka awareness) can’t be a goal. Reply iPAS3.COM iPAS3.COM 1 month ago Your Statement is Stupid: Because Traffic is Key. When you master traffic, all that other B.S. you have talked about is NOT valid … I prefer to say “Without Digital Marketing You Have No Business” Digital Franchising is the key to your success online, Because it cuts out the guesswork, and you don’t get sucked into that PPC, SEO and Paid Social Media SCAM! Reply Mike Searles Mike Searles 1 month ago Neil – you hit the nail on the head so loud I heard it all the way down-under in Australia! Let’s hope those big agencies spending their clients big budgets on digital-marketing that is not measurable in sales and profits reads this… Reply Alex Rodriguez Alex Rodriguez 1 month ago I don’t think you don’t know what you’re doing, as I think your concerns are very well grounded in solid business practices; however, I do think you have some foundational misunderstandings of the topic you chose to write about. The main three I see are: 1) Treating CTR as a primary KPI, when the discussion at that point in the article revolved around PPC ads. This shows that you are measuring one aspect of a campaign with an irrelevant rule. 2) Ignoring that awareness can — and often does — have an essential place at the top of a well-structured funnel. 3) Claiming to critique the concept of a funnel, when no rational marketer would ever consider just increasing metrics at the top of the funnel as a success. I’m not affirming that there aren’t any really bad cases of digital marketing practices out there, because there are; but in order to cast aspersions on digital marketing as a whole, I think your argument first needs to be a bit more solid and wider in perspective. (I’ve posted my longer rant in response to this article here: creativestrategytips/digital-marketing-destroying-business/) Reply luke smith luke smith 1 month ago I am staggered that a well regarded title such as Forbes would run such nonsense. Neil St Clair you clearly do not have the slightest idea about marketing, let alone digital. Please read about ‘Cost-Per-Acqusition’ marketing and ‘online attribution’ before submitting further articles. Its not about volume based, it’s about what works. Simple as that. Reply Author Neil St. Clair Neil St. Clair, Contributor 1 month ago Now, now. Rather than spout off half-cocked with ad hominem attacks let’s be constructive. You site CPA. Show me the study where CPA for the types of marketing you’re defending is lower than the types I’m promoting, and I’ll gladly review it. Save for e-commerce sites where the acquisition bar is lower, you will acquire very few customers via the types of digital marketing tactics I’ve described. You’ll spend a lot of money and perhaps get more views or newsletter subscribers, but not much more. Digital marketing is about giving you the optical illusion that you have more customers, when in fact you have more disengaged low-quality eyeballs. The problem is that, say for a media site, they sell ad space based on a number of eyeballs to that site. So the media site focuses solely on getting more eyeballs so they can get more advertising dollars. But the advertiser doesn’t realize those eyeballs are worthy next to nothing in terms of conversion. And in turn the media site creates crappy “clickbait” content to draw in eyeballs. And on attribution, I’m pretty sure I addressed that. Humans are influenced by their peers and reference groups (family, co-workers, etc.). Fritz Heider would likely agree. So show me where you can attribute a marketing target’s actions to online ads or paid social media. As I said, proof is in the pudding. Grand pronouncements don’t make an argument. I fear you’ve read too many textbooks or have worked at too many big digital marketing companies. Don’t drink the Kool Aid. These tactics are purely about volume, and still, decades on, have failed to prove their worth to all but a few uninspired marketers. Called-out comment Reply Lisa Radin Lisa Radin 3 weeks ago Think you need to look at this w fresh eyes. Social media and digital marketing are the new supply chain, supplying communications to accounts, customers and prospects. If you ready almost any annual report, there will be a mission ‘line’ of: We will make our supply chain efficient. Companies just don’t know how to make this ‘new’ supply chain efficient -> therein lies the problem. Can’t argue w you re your article, but companies spend a large percent of their operating budget on merchandising/planograms/POP/sales support and new digital strategies really falls within that genre. Companies have a long way to go. Reply tom tom 3 weeks ago IT IS SO GOOD! I LIKE IT.0ab05kllta1gcob1p6jg2imfke.hop.clickbank.net/ Reply Rajat Kapoor Rajat Kapoor 2 weeks ago Neil your observations echo the truth. Digital marketing comes across as a myth which has been most labouriously concealed thus far by big business. In India and elsewhere globally the ROI and sales have been abysmally low yet the digital marketing phenomena is on the rise ! Please share more such insights with us in future so that small and mid level business enterprise may also get a view in this highly competitive and saturated Indian corporate landscape. Reply diepak benie diepak benie 2 weeks ago I consider digital marketing as icing on the cake. Of course it functions as a well oiled machine, having excellent content, sharing on social sites and in the best case involve relevant people and have a discussion started. In that case you will have a living subject, opinionated and growing larger. Reply Follow Comments Share
Posted on: Wed, 19 Nov 2014 04:55:33 +0000
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