The Talent Revolution in Digital Marketing

The Talent Revolution in Digital Marketing

          
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The Talent Revolution in Digital Marketing

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    Digital marketing is not only the future, it’s the present. But do today’s marketers have the skills they need to operate in a digital world?

    New research by The Boston Consulting Group shows that they do not—and that the gaps and shortfalls are bigger than companies assume. The signs for the future are even more troubling, as many marketers seem focused on catching up on yesterday’s needs rather than embedding into their organizations the capabilities and expertise that will be required tomorrow. The companies that act now to transform their marketing capabilities will be much better positioned to connect with their customers in the years to come.

    Marketers know that digital channels are critical to engaging today’s consumer. Global spending on digital advertising will reach $178 billion in 2016, almost 30 percent of total ad spending, according to eMarketer. Digital advertising already represents a third of all ad spending in the U.S. today, and many forecasts see digital reaching parity with TV in a few years’ time. In the UK, almost 60 percent of consumers use social media each week for an average of 52 minutes per day. In Germany, about 13 percent of all commerce is now transacted online or via mobile devices; online sales are growing at more than 20 percent a year. Worldwide, a quarter of consumers use smartphones, a percentage that will rise to a third, or some 2.5 billion people, by 2018. In developed economies, of course, the percentages are much higher.

    Marketing organizations are feeling the pressure created by these shifts. And while still important, traditional skills such as creativity and brand building no longer suffice in a digital-first reality. Marketing has become much more of a science requiring technical, data-crunching abilities. With new digital channels and tools constantly emerging, marketing organizations must become more agile—to borrow a term from the world of software development—iterating much more quickly in order to adapt to rapidly changing conditions. (See The Agile Marketing Organization, BCG Focus, September 2015.)

    But before companies can address the gaps, they need to know where and how large they are. To address this challenge, BCG joined forces with Google and a team of marketing industry experts to form the Talent Revolution Initiative. Our first undertaking was to survey some 1,100 marketers (including digital specialists, brand managers, customer marketers, and public relations practitioners) at 57 companies in the UK and Germany on their organizations’ digital-marketing capabilities, learning and development efforts, and future requirements. (See “About this Report.”)

    About This Report

    With the rapid growth in digital spending and the expanding impact of digital channels on consumers’ behavior, it’s more important than ever for marketing organizations to understand where and how they can most effectively influence consumer behavior and whether they can do so efficiently.

    Google commissioned BCG, supported by digital-training experts The Knowledge Engineers and a team of marketing industry organizations (see the Acknowledgments for a list of the organizations involved), to assess the current state of digital skills in marketing organizations. The findings outlined herein were discussed with Google executives, but BCG is responsible for the analysis and conclusions.

    We surveyed some 1,100 marketers at 57 companies to understand how they rate their marketing organizations against digital-marketing best practices. Participating companies were from the retail, consumer products, financial services, and technology, media, and telecommunications industries, as well as from public-sector, education, and not-for-profit organizations. We focused the survey on companies in the UK and Germany, two highly developed economies that are following different trajectories with respect to digital’s economic impact but that together broadly represent the current state of the digital market in developed Western nations.

    We asked marketers to assess their organizations’ capabilities across a digital-marketing framework that includes nine categories of skills. (See the exhibit below.) The first three categories are related to planning: marketing and brand strategy, partner management, and critical organization enablers. The next three involve execution: digital targeting, digital-content development and distribution, and expertise in seven digital channels (search, websites, display media, mobile advertising, mobile Web and applications, social media, and video). The final three sets of skills relate to measurement: metrics and measurement, marketing analytics, and testing.

    exhibit

    Marketers rated their teams’ current capabilities and performance in each skill and in each of the seven digital channels on a scale of one to six. Responses were turned into an index with 100 equaling best practice. We also asked respondents to list the capabilities that are critical for business success in the medium term (three years) and the skills in which they need learning and development support in the next 12 months.

    The results are eye-opening. On BCG’s 100-point Digital Capabilities Index (DCI) (with 100 indicating best practice), the average digital-skills score for all marketers was 57. While a few companies ranked higher than 70, the majority fell squarely into the 55-to-60-point range. (See Exhibit 1.) Industries such as retail and financial services were particularly weak.

    exhibit

    On the one hand, these scores should be a wake-up call for CEOs and CMOs of any customer-facing organization. On the other, the current state of play is not that surprising, given the relative youth and rapid development of digital marketing in general.

    Companies face the biggest shortfalls in some of the most important capabilities—skills related to mobile, video, testing, partner management, and organizational enablers, for example—which will only increase in importance in the next several years. At the moment, at least, marketers are not singling out these skills as immediate or longer-term learning and development (L&D) priorities for their teams. Moreover, in many instances, companies do not see these critical skills as top near-term business priorities.

    The scale and nature of the skills gaps suggest that companies need to do much more than tinker with their recruitment and training programs. Most require a transformation in their marketing functions: making the development of digital capabilities a top business priority, rewiring the organization accordingly, and significantly boosting L&D programs to produce the needed skills. In addition to championing digital engagement, top management must deliver resources, support for new initiatives, and investment in capabilities and platforms that capitalize on the opportunities digital technologies offer. In L&D specifically, companies ought to shift their focus to support an agile marketing organization characterized by self-learning (in addition to more traditional training), an adaptive strategy based on the test-and-learn approach, and much more calculated risk taking.

    This is a big undertaking—and an equally big opportunity for those that seize it first. The playing field is mostly even; research shows that most companies face broadly similar gaps and needs. Since the DCI rates companies against best practice, there’s plenty of room for improvement. Even companies at the top of their industries have major gaps in critical capabilities.

    Better talent will lead to better business performance. Moving now and moving quickly can deliver long-lasting improvements in both skills development and the marketing organization’s ability to drive top-line results. Given the shortage of digital talent, and the time it takes to revamp L&D programs and push the results through large, multilayered organizations, those companies that get a head start will have a huge opportunity to accelerate ahead of their peers and build sustainable long-term advantage.

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