Despite understanding the importance of digital marketing, its contribution has weakened over the past years for many organizations. 30% of marketers reported in the CMO survey that they are getting average to no returns on their digital marketing investments.
Every marketer agrees that interactive marketing, customer engagement and experience are most important for business growth. However, their performance is still poor, which is also called a “Performance Gap.”
In this post, we shall discuss why the performance gap exists and the strategies to overcome them.
What Is Causing the Digital Marketing Performance Gap?
Here are six reasons that may be the reason why the digital marketing gap is widening.
- Companies are yet to fully integrate digital marketing into their organization.
- Marketing teams find it difficult to understand data analytics and convert them into actionable metrics.
- Marketers also find mapping the customer journey complex and more challenging.
- Due to the change of privacy rules, marketers are losing access to third-party data.
- Instead of conducting digital marketing activities in-house, more and more firms are outsourcing them.
How Can Marketers Close the Gap Between Digital Marketing Performance and Returns?
Closing the digital marketing performance gap is a formidable challenge. However, you can do it with the four strategies discussed below.
1. Take Advantage of First-party Data
Using first-party data can help in creating relevant experiences for customers, further increasing revenue generation. Research shows that a single engagement can improve revenue by 2x and efficiency by 1.5x.
With first-party data, you can get a better understanding of your customer base and reach those who can bring profits to your business.
2. Strengthen Strategic Experimentation
Oftentimes, the major focus of marketers lies in investing in digital platforms to determine the efficiency of their marketing materials. Only a few are concerned with online experimentation and A/B testing.
However, they can get breakthrough growth opportunities if they increase their investments in strategic-level experimentation.
Since marketing trends and customer behavior keep changing, strategic experimentation will help marketers to understand new challenges and discover opportunities to overcome them.
3. Intensify Cross-functional Collaborations
Collaborating with leaders and groups is crucial for digital marketing success. However, only a few stick to it.
Most marketing leaders are still going solo and don’t collaborate with important leaders and groups. Cross-functional collaboration is not just about getting support for marketing investments but also understanding the impact and contribution.
Working directly with C-suite will elevate your marketing function, ensure that it improves your business strategy and protect it from cost-cutting initiatives.
4. Embrace AI and Machine Learning
Despite artificial intelligence (AI) and machine learning (ML) being in demand, companies are currently making less use of them. However, marketers must increase their usage if they want to get the most out of data analytics investments.
Integrating first-party data with AI and ML-driven marketing tech will help marketers optimize customer interactions and drive valuable outcomes at an efficient cost.
As marketers, it is crucial indeed to focus on generating and qualifying leads. But now, it’s time to think beyond that. So, start paying attention to closing the digital marketing performance gap by creating audience engagement throughout the buyer’s journey. The digital-first world we live in today demands revenue generation for success more than pipeline creation.