The Changing Face of Marketing:How the Digital Revolution is Changing Consumer Behavior

Three plugged-in executives discuss the continuing evolution of marketing, consumer behavior and brand relationships in the digital era.

Question 1 – How have consumers’ expectations changed as a result of technology?

ANSWER 1A – Nicki – Consumer behavior is rapidly changing and will continue to. First, we used to produce what was the newspaper; we made decisions what we believed you felt that you needed to know and delivered it to your doorstep the next day. Now, most of today's news is actually broken via us consumers. Most of the major stories are on social media, and it's because someone was right next to something, such as the bombing in Boston at the marathon; that's how news is broken.

I think what we have found is that there's no real sustainable, competitive advantage anymore. If you are good at something today, and you're actually generating revenue from it, the likelihood that you will be two years from now, or even three, or potentially six months, is different. Ultimately staying ahead of that and recognizing that it's transient. Where you have the opportunity today, knowing it could shift in six months, is a really important cultural change that we've had to come to terms with.

ANSWER 1A – Baron – I think what we see is that people will gravitate to whatever is easiest, right? I mean we see it, and you saw it with what happened in the music industry, and you see it with what's happening in TV today. I mean, think about it, people are really disappointed if they can't get the whole season of the show released to them at one time, right? We experience this in my household. If there's a show we really like, and, we have to wait another week to watch the next episode? That is just what's happening in the world.

I think we all have to just be self-aware enough to know that we may not be in touch with what's happening with a lot of segments of our population and how we go to school and understand some of that stuff, and be at the forefront of it, is what's going to determine our success.

ANSWER 1A – Jim –We've moved from brands directing the engagement, (I'm going to prescribe to you when and where you're going to engage with my brand and direct the conversation), to now consumers just taking that on themselves, (saying no thank you, I’ve already had my experience with your brand and I'm going to take it myself. I'm going to tell my own story, or I'm going to simply reject your story and go somewhere else). The brands that are doing well are the ones that are enabling and empowering the consumer adoption of that story; letting them tell it in their own way and letting them share it. The ones that are still trying to prescribe it are, frankly, at risk of being ignored.

Question 2 – How has the evolution of social platforms changed the way brands connect with their audience?

Answer 4A - Jim - What's more important for us, and more forward thinking, is looking at a different metric-- how are you as a brand? How are you at creating valuable experiences for your audience? How many times are you, and in which platforms, creating that experience, right? Set that metric for yourself, and the rest is going to follow. The goal is valuable user experience.

Answer 4B - Baron - I think what's great about digital is it's really easy to measure the ROI. You can do a paid piece of content on there, and you can measure the click-throughs and how many people purchased. You can do all sorts of things that you can't do in a lot of other media outlets.

I think it's pretty easy to measure it all. In the digital world today, sometimes you just have to do a mindset shift about ROI in general. I mean, what's the ROI of not doing it? I'm sure at some point 15 years ago a lot of people stood around an executive boardroom of Blockbuster and said, “What's the ROI of live-streaming movies? We're going to have to invest a ton of money, and blah, blah, blah, and then where is the business case?” Next thing you know, the world changed, and they didn't take action. I think you have to look at this world a little bit differently. I'm sure when Uber started there was abig conversation about what's the ROI at Uber. Then to Jim's point, it came down to what offered the better user experience: ordering an Uber or trying to hail a cab? It requires a mindset shift, and I think with a lot of these things, you sometimes have to just ask yourself what's the ROI of not doing it?

Question 3 – Facebook has led the change in paid vs. organic posting. What does this mean for brands’ advertising plans?

Answer 2A - Jim - Social is a great opportunity for co-created storytelling. The brands that succeed look at it from a standpoint of “I'm going to put valuable pieces of content out there that help tell my story.” They view social media and digital media as a wonderful opportunity to create non-linear, episodic storytelling pieces of content. It fits perfectly with our ADD lifestyle right now, right? We usually don't even sit through a one-hour TV show by ourselves. We have our laptop, phone or tablet in front of us, and we're consuming multiple things simultaneously.It’s a tremendous opportunity for brands. When you look at it and say “Okay, I'm going to offer these opportunities for my audience to engage in my story, to take that story, to shape it, to co-create it, to craft it themselves, and share it with their friends,” the story evolves. The story becomes more powerful. Social platforms, we're seeing, enable that in a way we've never seen before.

Answer 2B - Baron - I think that if you look at what's happening with mobile, I think even Facebook and Twitter would tell you that probably 75 or 80 percent of their content is consumed on a mobile device. What that's done to consumer behavior is justcrazy. The grocery and drugstore industry have a term they use: “mobile-blindness.” A couple of years ago, they started seeing magazine sales fall through the floor. Their natural assumption was that this was because people were consuming content on their iPad or mobile device. Then suddenly, the sale of gum and candy started dropping as well. They discovered that people, when they're waiting in line at the grocery store or the drugstore, instead of them looking around and adding more stuff to their cart, they're pulling out their phone and looking at Facebook and Twitter. Mobile-blindness. You have to be on top of all of this kind of stuff.

Answer 2C - Nicki - When was the last time you went and typed in DallasNews.com and went to that website, to that homepage? Instead, you probably got there via a particular story or an article-level page that you may have seen in social media.The revenue that we generated from just content that is linked back from social media, is in the seven figures. It is a revenue-generating distribution channel for us. It's also a marketing vehicle for us. As we build products, new sites like Guidelive.com, we have to get the word out about the products on the social media channels as well.

Question 4 – Many brands question the ROI of social media efforts. What is your perspective?

Answer 3A - Nicki – The objectives of Facebook, and Twitter, and most of these are not to put publishers out of business, are to give a sort of best-in-class experience to the consumer.

When a publisher, such as Facebook, produces that kind of change, I don't look at it and say we've got to stay away from that because they're going to control and own the consumer. The consumer is going to do what the consumer is going to do, and, as you mentioned, whatever is easiest. We have to embrace the improvements technology brings, whether we bring it or a partner brings it, and figure out how we ultimately work together to get to the best, optimal revenue in that channel.

Answer 3B - Baron - We have a lot of organic posting, because we have so many fans who are waiting to hear from us. At the end of the day, I think what's important is that sometimes you can get fascinated. I see brands get fascinated about the number of fans they have. Really, what you should be really focused on, is when you do post content, how many times is it shared, right? That's what's compelling; when people find your content compelling and they share it with their friends. That's how they get the exponential message out. If you have a million fans, and they all share it with 200 friends, that's the power of scale, and that's what you should really be focused on: Is the content engaging, or is it just another bi-product of what you threw on TV. Consumers today see through that stuff. Is it really authentic and genuine, or are you just trying to sell me something?

Question 5 – With new social platforms emerging daily, how should brands approach these new opportunities?

Answer 5A - Jim - Every time a new one comes out, we get in and play around with it. This is part of our culture: we talk about the new platforms, and the evolution within platforms, every week, together as a group. We talk about what it means for our brands and how we are going to leverage this new innovation. First and foremost, we have to experience it as a consumer ourselves, so we get in and play around with it. Just like we speak to our brands about understanding their audience, we try to get in and understand the platforms from the consumer's perspective.

Answer 5B - Baron - I think a lot of these emerging ones you can put on the back burner until you've mastered the basics of the big ones, right? The Facebook, Twitter and Snapchat.

Answer 5C - Nicki – We’re constantly looking at new channels. Fortunately, we have a diverse set of journalists in terms of age-range. We'll get folks in a room and say, “Tell me everything you know about this channel and your experience with it? A lot of times we will make the decision to be a fast follower, instead of being on the cutting edge. Oftentimes investments need to be made if you're going to open up a channel, and you need to make sure you're dedicated to it. Just opening it and saying you're there without engagement provides no real value back, and it's just a resource drain.

Question 6 – How has your company culture changed due to digital trends?

Answer 6A - Nicki – As a 130-year-old legacy brand, change is a big issue for us. We are challenged with facilitating people who are avoiding change. Really sitting down and educating is probably the number one thing we can do, and recognizing from the business perspective where the business is going and the impact of that. We used to sit back and set digital goals, and they looked more like a checklist, such as make sure you tweet seven times. Make sure you blog about this. Ultimately, we were losing people because they'd say why? What's the advantage of this?

Until I was able to go back and build out the financial picture of the company and show them the referral clicks from social were generating millions of dollars for the company, they didn't begin to understand the impact of that and how critical it was. It wasn't just about a brand or us having a desire for them to be more digital, it was absolutely driving what is the breath of the company.

Answer 6B - Baron - I can't remember the saying, but the first way to make progress is to admit you have a problem. I think, for most companies, the first step is to come to the realization that you are not your customer. A lot of times ideas get killed because we're like “I wouldn't do that.” What kids who are 18 and younger in today’s day and age do is completely out of touch with our values. If I left my son, if he's up to his own devices, he would sit and watch a video of other guys playing video games, for 24 hours straight. Think about that.

Answer 6C - Jim - We're primarily a social media agency. Coincidentally, we've been around just about as long as Facebook has, and we've evolved at much the same pace. Five or six years ago we were very much a pre-packaged, one-size-fits-all kind of a sales model. You get X number of tweets a day and X number of Facebook posts a day. That was comfortable for brands that were getting into this new social media channel, who didn't understand it or understand why you should be doing it. It was an attitude of “Well, I guess I should be doing it, because somebody else is, and I see that the kids are doing it.”

We've really moved to more of a model around what's possible, understanding your audience, creating custom digital experiences across those channels and looking at the new platforms that are available. Our culture is less about those shifts and more about what we are going to do tomorrow? What don't we know now that we're going to need to know tomorrow? What are the skills, the capabilities and expertise that we don't have today that we're going to need tomorrow? We're constantly looking at how we're going to build that.

Question 7 – What do you see digital behavior going?

Answer 7A - Jim - Videos continue to drive social content. We like to say that nobody wants to read the internet, they want to watch the internet, so video content is a big portion of what we do. Facebook is north of four billion daily video views. The video consumption, the opportunity for co-creation with video is going to drive that. I think we're also moving from what's been an attitude lately of mobile first, to mobile period. People aren't apart from their cell phones for more than a minute a day. The rate at which they pull it out to check on anything, in whatever experience they're in, whether they're in a movie theater, watching a TV show, or at a store standing in front of a product they might purchase, their phone is tied to them. How do you create experiences around that?

Answer 7B - Nicki - I think that we will continue to see this evolution of distributed platforms and content that exists everywhere. Two and a half years ago, a good friend of mine worked for Viacom, and I looked over his shoulder at his ChartBeat panel (a tool we use to look at concurrent users on any particular story). I looked over his shoulder at his homepage for MTV News, and the number was 43. I said, “What is that?” He said it was the number of active people on the homepage of MTV News. I went, “Are you freaking out? 43, I think I have more than 43 friends.” I started thinking about it though, and of course their audience wouldn't be onsite. When I think about how I produce products into the future, often it is, “Is it a headless site? Does it even have a homepage?” This is absurd to think about today, because the volume of unique visitors that I have coming to the site every single day, but that's the type of future I think that we're evaluating.

Answer 7C - Baron - I think a couple of things. I think we're seeing a sort of Uberization of all businesses. I think a lot of times people think Uber transformed the transportation industry, but really they kind of transformed commerce as we know it. They've set a new bar of easy. I don't have to pull out anything to pay, there's no awkwardness of “what do I tip this guy?” It’s an easier process. I think what we're seeing is a lot of companies, big companies such as ApplePayand GoogleWallet, are really struggling because the consumer's not willing to do it, because it's harder than what they already know.The other thing we're seeing is that there's a consolidation of how people are using their mobile devices. 95 percent are probably driven by three things: social, email and text. People are sort of becoming, in the spirit of what's easy, unwilling to go install your app or download something else in order to do what they want to do. We see, and some companies are already doing this, how you engage with consumers in those three formats, social, email and text, to let them do what they want to do.Imagine a world where you can text Pizza Hut and reorder. Then it says this is your last order, press five to confirm. That order is automatically placed. You can private message Pizza Hut on Twitter or Facebook and ask what the best deals are today. You get an automatic response with the top three deals today. The question is: How do you engage with the eyeballs, and what are they already looking at?

Question 8 – What’s one piece of advice for companies that are really trying to grow?

Answer 8A - Baron - We implemented something in my company which I think is really useful. We implemented the concept of reverse mentoring. Every executive member has a 20-something who is their reverse mentor, who really has a conversation about how they run their life every day. It's really enlightening for a lot of people from a culture perspective, people who really have no idea how millennials lead their life. We hire a lot of kids out of college on my team in particular. One of the first questions I ask is if they have cable. Half of them don't, and they're like “Why would I have a cable? I've got Netflix YouTube and Amazon, so why in the world would I have cable?” For a lot of people, it's really enlightening to see.

Answer 8B - Nicki - To experiment & be willing to fail fast and then learn from it. Also, don’t be afraid of self-cannibalization. When I learned yesterday that Etsy opened up a brand new service, which is helping entrepreneurs set up their own websites, it seems counter-intuitive, because what they created was an opportunity through their website, for people to come sell their goods. Why would they do that? It's an entirely new revenue stream. It’s embracing the fact that things move. It’s getting ahead of change.

Answer 8C - Jim - I'll stick with Baron's theme of reverse mentoring. Learn how to earn their loyalty. What are you doing to create a valuable experience that’ll earn you their loyalty?

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