Omniture summit: Don't waste a good recession on traditional marketing

The Omniture summit kicked off this week with an emphasis on developing an analytics-driven culture to better understand customers and send the right marketing messages to them, both online and offline. Stuart Lauchlan finds out more...

By Stuart Lauchlan, news and analysis editor

It's a downturn, yes, but there are still plenty of opportunities out there - that was the underlying theme at the Omniture Summit in London this week as the web analytics and optimisation firm set out its stall for the third time.

CEO Josh James opened proceedings by reflecting on the increased interest in the whole area of web analytics, noting that whereas the first event three years ago had pulled in around 200 attendees, this year's conference played host to five times that many. It was, he argued, testament to the importance of web technologies and to the need for marketing people to play an increased part in the fate of their organisations in troubled times.

"We all know that if we don't have a strategy for the mobile web, if we're not taking advantage of that then we're going to be left behind," he told delegates. "The evolution of technology is no respecter of the health of the economy. There are not a lot of fun things going on with the economy right now but we can be the bright spot inside our organisations. There are new ways to interact with our customers. It's a real opportunity. We are all driving this change together. If you think of yourself only as a search engine marketer, then you limit what you can do for your organisation. Think of yourself as the quarterback who is orchestrating everything that's taking place inside our organisations."

James introduced Mark Read, CEO of WPP Digital (part of the WPP global media giant), which has signed a partnership deal with Omniture to have 500 of its staff trained up in the firm's technologies – and also took a stake in the company. Read said that the growth of digital marketing was driving change in his business sector as in many others. "There are two main drivers of change in our business – China and the internet. And that's not going to change despite the economic turmoil," he said.

"Digital now makes up about 26% of our business around the world, up from 15% about five years ago. We started WPP.com as it was then in 1998. We thought the [digital] problem had gone away around 2002 when the dot com collapse happened. But really, no-one suggests today that the kind of things that Omniture is talking about are going to go away. In fact, the shift towards digital media is just going to accelerate.

He also claimed that every client the company speaks to wants to spend more money on digital marketing. "That's where customers are spending time and where consumers are spending time," Read continued. "It's not just about reaching more customers through marketing, it's about their businesses now operating both offline and online. All of the growth in the UK retail sector is online but the barrier to growth is analytics and making sense of the data."

Read said there were additional burdens heaped on the chief marketing officer. "CMOs are looking for more and more accountability," he explained. "Every CEO wants to see quantification for their marketing spend. We have metrics for some of that but they often don't exist online. In the current environment, firms are looking for increased productivity and reduced cost.

"If you look at the phases of the business, the 1980s was the decade of the 'big idea', the 1990s were about media consolidation and the current decade is about technology. Now, you've still got to have a good idea or marketing won't work, so we still need the creative people, but it's now also about the application of technology."

Read reckons that Europe has taken a lead in online marketing. "The European market is tough, not as tough perhaps as the US which has been hit very badly since September," he said. "But in the UK, 29% of all ad spend is on the web compared to 14% in the US. It's the same in Scandinavia. Over here it may have something to do with the fact that the BBC is so powerful and things to do with that mean that online spending is higher in the UK."

An analytics-driven culture

Another Omniture customer on show was John Lewis Direct. "We launched as JohnLewis.com in 2001 following the purchase of Buy.com," said David Walmsley, head of web selling at John Lewis Direct. "We now have 45,000 products online, with 2007 sales reaching £268 million. We were set up as a stand alone business inside John Lewis and we are very focused on customers and how to create a seamless customer experience so that you have the same experience online as you do in the store. We want to have existing John Lewis customers shop with us online.

"Developing an analytics-driven culture is the most important thing as change must come from the analysis. We want to genuinely understand what our customers are doing and what they want. The most boring number that I see every week is our weekly traffic number – that means nothing to me. Drilling down into that is what matters. We need to test and learn. If we change this message or that message, what will happen? We need to take the hypotheses on what customers are doing and act on it." Read more about his thoughts on bringing the high street shopping experience to the web.

But back to the recession and how to thrive. As Ed Thompson, distinguished analyst at Gartner, noted when kicking off his presentation, you don't want to waste a good downturn! "It's a tough economic situation and there has been a switch away from traditional marketing to digital marketing," he said. "All organisations today are in one of three categories: panickers, worriers and attackers. The panickers are in the bottom 10% and are easy to recognise - they are a shambles. The worriers are the 80% majority where the budgets have been cut and people have been laid off, but if you perform you will still have a job.

"It's the attackers category where your organisation should be. As the cliché of our times goes, it's a terrible thing to waste a good recession. Deeper sales and marketing strategies are what will sort the winners from the losers. All the big guys have realised that they win the most market share during a downturn. CEOs do see value in sales and marketing technologies and data-driven analytics, even if they say you can't have a pay rise and that they don't believe in all this digital nonsense. Well, they do really."

But he added that marketing is made up of a lot of fragmented people who don't talk to one another, some inside the organisations and some external. "It's just a mess," said Thompson. "There is a struggle at the moment to transition budget steadily from traditional marketing towards digital. If you went back two years and asked organisations how many of them had integrated traditional and digital marketing, maybe only 40% had the two in the same structure. Now digital marketing is getting more funding than traditional forms."

Related articles

Omniture summit: CEO Josh James on what the future holds