The Soda Academy

Modern Marketer

Key Insights:

Marketers have fully embraced digital innovation, changing expectations for ecosystem partners. Anticipate less evangelizing and more strategy, execution, and optimization.

Complexity is inherent to this world of full-on digital and marketers feel ready for it. But is their confidence borderline hubris? Marketers admit only meager skill gaps, a mismatch to today’s inconsistent marketing.

Innovation comes from ideas and ideas from people. While marketers offer attractive talent retention tools, they fall short on promoting programs that build diverse skills and supply challenging projects.


Respondent Overview

Innovation

The Age of Confidence

Key Insights:

More marketers than ever perceive themselves to be innovative. Expect this self-reported identification — be it authentic or biased — to stress future expectations of agencies.

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Orginization Innovation

We’ve entered the age of confidence — at least if you ask a marketer about her own digital innovation efforts. In an incredible 12-percentage-point jump over 2015, 27% of our client respondents feel they are “very innovative” when it comes to digital marketing. This shift in improved self-perception indicates that clients are ready to tackle the complexities of modern marketing, to move from thinking about it to doing it. But caution remains: this year the biggest slice of respondents, 38%, feel only “somewhat innovative,” showing a balance of room to grow but also a sense of accomplishment. Respondents feeling “not very innovative” or “not at all innovative” dropped to a mere 8%, meaning fewer marketers than ever consider themselves neophytes.

We expect a ripple effect throughout the marketing ecosystem as brands push their own innovation boundaries. As our data shows, clients will look for new types of partners for innovation support, including a broader array of internal stakeholders, agencies, consultancies, and digital media partners (reference Qc15). They will seek new services from existing partners. And most importantly, as they traverse the learning curve, clients will get smarter faster, making it harder for partners to stay the step ahead to bring — and charge for — unique value.

Technology is Key to Evolving Brand Value…to a Point

Key Insight:

Marketers appreciate the value technology can bring to brand positioning, but they keep it in check — as the brand promise enabler, not a panacea.

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Early Adoption

While marketers are feeling more innovative, they’re stabilizing in terms of pursuing technology innovation as a part of their brand’s positioning. More than 70% of respondents believe that being perceived as an early adopter of technology is “key” or “important” to their brand positioning, a high percentage but a slight dip from 2015 levels.

Marketers recognize how technologies such as mobile and the internet of things are transforming the concept of brand value. Early adopters of technology seize the first mover advantage to retrofit existing services so that they are faster, easier, and more valuable: Think of an airline that lets you control your flight reservation via its brand app. But more exciting is the chance to rethink your brand’s positioning entirely, such as the sports gear brand whose social-enabled workout app connects enthusiasts for community-driven incentives. For marketers who can reimagine their brand beyond the product on the shelf, technology can help deliver a new brand experience.

We believe the recent leveling off is a good thing: it indicates that marketers understand that technology is not a panacea. A brand’s value proposition starts with understanding the customer’s experience and the unique way(s) the brand can fit into that experience. Technology is the enabler, not the end in and of itself.

Added Complexity is the Price of Innovation

Key Insight:

More marketers than ever expect complexity in their industry, and more than half think they are quite or very prepared for it.

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Level of Complexity

Even in their bullish state, marketers have no illusion that digital transformation is easy. Pacing with their appreciation of technology is the understanding of the complexity that comes with such a world. In just a year, the percentage of marketers who agree that the level of complexity facing their profession over the next five years will be “high” or “very high” jumped from 74% to 84%.

Expect this practical perspective to fuel adoption of new business models, ecosystems, and collaboration processes that cut out unnecessary layers and reimagine how work can get done for better, faster, more cost-effective results. Consider new entrant Tongal, which connects brands to a global community of filmmaking talent for a choice advantage when it comes to producing original video content. Marketers and partners who are open to these new workflows will have a strategic lead in converting complexity to opportunity.

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Level of Preparedness

The good news is that marketers feel more prepared than ever to handle such complexity. Fifty-six percent, over half of marketers polled, feel “quite” or “very prepared,” a jump of 26 percentage points over 2015. This increase further supports the notion that marketers are entering a new mental state in terms of handling digital and will seek different types of digital support compared to the past. Still, 39% are feeling “only somewhat prepared” or less, a group that is likely composed of late entrants into the digital foray.

We see further evidence of burgeoning confidence with digital given that 1 in 5 client respondents feel that their organization is “excellent” at forecasting and adapting to new technology trends, and 41% feel they are “good” at it. (Source: QTk3 – How good is your organization at forecasting and adapting to new technology trends.) As marketers feel more prepared to handle the complexity of their profession, agencies are relieved of that responsibility. Agencies will have to become uber-innovation resources to exceed what clients are now able to do for themselves — a possible but difficult task that requires strategic investment. More importantly, agencies will need to double down on the marketing strategy, creative, and customer-centricity — yes, their original value drivers — that work with these new technology trends. These are areas that new entrants such as consultancies struggle to master.

Minor Innovations Get You Only So Far

Key Insight:

Marketing progress starts with minor innovations, but respondents are split on whether minor or major innovations are sufficient for the future.

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Degree of Innovation

Today, 46% of our client respondents claim that their organization relies on “minor innovations” to innovate their products and services or to engage with customers in new ways, versus 29% of respondents citing “major innovations” for the same goal. The emphasis on minor change makes sense: Organizations are often willing to commit to roadmaps of incremental steps versus risking it all for a massive transformation.

But minor improvements get you only so far. When it comes to projecting the level of change needed to innovate projects and services or to engage with consumers in new ways in the next one to two years, our respondents bifurcated strongly. Thirty-eight percent believe that “minor innovations” are sufficient to survive and grow while a similar number (40%) say “major innovations” are needed for their organizations to stay alive and prosper.

This disagreement speaks to the fact that different businesses need different approaches. Companies burdened with legacy culture, inefficient processes, and antiquated technologies will need radical change to survive and grow. A century-old insurance firm with risk-avoidance baked into its very DNA will struggle to fully embrace the agile “fail fast, fail often” mentality that is pervasive in the start-up community. When the low hanging fruit is gone, brands will have to make difficult decisions regarding change — or be forced into such changes by the market.

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Learning Curve Clients

The Skill Gap Mirage: Digital Confidence Risks Self-Deception

Key Insight:

Marketers acknowledge few internal skill gaps — a questionable mindset given today’s pace of constant change.

But where is the most improvement needed? Again, marketers’ confidence is at an all-time high, with more than 50% stating that they are “Experienced” or an “Expert” across almost every single digital skill set included in the study, with the highest being “use of data to drive digital marketing effectiveness”. The one area showing some self-doubt: place-based digital experiences. Uncertainty here makes sense given that this skill set brings together diverse, cutting-edge disciplines including mobile, design, engineering, architecture, and real-time data.

Q. (Clients) Where are the most significant skill gaps in your organization with respect to digital marketing?

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Talent gaps

Our respondents chose “User Experience” as one of the two areas where they are most likely to be experiencing significant gaps with respect to digital marketing. More than one in five respondents claimed talent gaps in this area. Executive management was the only other area where respondents indicated such a major gap in digital marketing preparedness. But this perceived deficiency is still relatively low. In fact, more than 30% of respondents said they had no gaps at all in any of the categories about which we inquired. The concession of only minor gaps across the board (ranging from 30% to 40% of respondents) further reflects respondents’ confidence in their digital capabilities.

Given the self-reported nature of this data and the inconsistent brand experiences we have all seen as consumers, we have to question whether marketers’ confidence has ventured into hubris. Is it truly possible that a brand would have no gap at all in content marketing? Marketers will be best served by taking a hard look at internal processes, organization, and technology to assess their true skills gaps and avoid being blindsided by their own skill set mirage.

Innovation Relies on Talent and Talent Relies on Inspiration

Key Insight:

Marketers offer a variety of talent retention tools but miss the mark on options that bring skill-building opportunities.

Q. (Clients) What does your organization do to retain talent?

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Talent Retention

Innovation relies on getting and nurturing great ideas. Ideas come from people. To truly be innovative, marketers must find, build, and sustain top-notch teams in a highly competitive talent environment. Marketers have been incredibly bullish on their own innovation profile, skills sets, and learning agenda across this survey. But where the equation does not add up is when we asked about talent retention. While marketers provide a broad array of retention tools, their focus is light on skill-building initiatives such as rotation programs and participation in innovation labs or hack-a-thons. After sabbaticals, these two employee benefits showed the lowest incidence rates at 14% and 16%, respectively. While flexible work schedules (47%) and financial incentives (42%) are key, modern managers must inspire the modern workforce with cutting-edge projects that incite problem solving and a sense of accomplishment if they want to keep the best talent.


Clients Increasingly Bullish on Digital Despite Modest Global Growth

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Spending on digital

The global economy is expected to grow a modest 3.2% in 2016, essentially on par with 2015 and down 0.2% from the January 2016 forecast (Source: IMF, April 2016). However, growth prospects are expected to improve in 2017 and beyond, bolstered primarily by emerging markets. Specifically, the projected recovery in 2017 is predicated on stronger growth in countries contending with harsh economic conditions in 2015-16 (including Russia, Brazil, and some countries in Latin America and the Middle East). The full IMF report is available here.

Despite lackluster growth in many parts of the world (and a contraction of economic output in major markets such as Russia and Brazil), 55% of client-side respondents expect to increase their spend in some way in 2016, either by an increase in overall marketing dollars or an increase in the digital allocation of a steady overall budget.    As Melissa Parrish points out in her introduction to this year’s study, the eight-point rise year-over-year is arguably due to the fact that clients’ expectations are being buoyed by the strong performance of digital programs, rather than being driven by excitement around emerging tech as we’ve seen in previous years.   While we expect new technologies such as VR to drive increased spending on digital in the medium-to-long term (particularly as the requisite hardware becomes more widely available and affordable), large majorities of clients are planning to increase their spending in 2016 in more foundational areas, such as:

  • Digital experiences (e.g., websites, mobile web) (82%)
  • Content development (76%)
  • Digital products (e.g., non-marketing-related platforms, applications, tools and services) (71%)

  A smaller, albeit still sizeable, share of clients is increasing spending on app development. As responsive website technologies continue to advance, more and more clients and agency partners are moving away from OS-specific development.   Globally, 55% of respondents indicated they were either 1) reallocating more budget into digital from their existing marketing spend or 2) increasing digital budgets while also increasing their overall marketing spend. That’s up significantly from 46.9% in 2015.   In the 2015 study, there were larger variances between regions, with a far lower percentage of clients in Europe, for example, projecting increased spending on digital. That has changed in 2016 as the European economic outlook has improved, albeit to a limited degree and not unilaterally across all markets. In the 2016 study, 50% of respondents from Europe expect to increase digital spending (with 27% increasing the share allocated to digital without increasing its overall marketing spend, and 23% increasing both the digital and overall spend). By contrast, only 28% of clients expected to increase digital spending in last year’s study.   Clients in the APAC region and North America are more in line with the global average when it comes to projected spending increases on digital in 2016 (54% and 55% respectively).


Clients Also Prioritizing Content, Digial Products and Data Science

Q. Which of the following best describes your organization’s budget trends for 2016 in the following areas?

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Budget Trends

Increased spending on digital is not limited to campaign buys. In fact, budgets are growing most dramatically for insight-driven content strategy and development that turns audiences into brand advocates.   Digital products outside of the marketing realm (including platforms, applications, tools, and services) ranked second in 2016. Agencies and software development companies who have expertise in digital product creation (both bringing their own IP to market as well as developing digital products on behalf of clients) clearly stand to benefit from the growing budget priority among clients’ organizations.   Social and email marketing rounded out the top five. Digital areas where clients indicated lower spending priorities included: app development, user experience testing, standalone strategy, video, display media, and mobile.