t he future of marketing is the internet of things

The Future of MarketingElana AndersonVice President, Enterprise Marketing Management

Our world is undergoing a profound change driven by technology

Massive amounts of addressable data

RFID, GPS, intelligent sensors, network data, etc.

Consumer generated data will result in 80 Exabytes by 2014

Affordability, analytics, and automation

Affordably manage, apply advanced and predictive

analytics, and Watson-style guidance to massive amounts of

New forms of interaction2.4B people on line

2.1B smartphones in 2015Social media

Businesses that harness these trends have an unprecedented opportunity to know their customer

and interact in a truly informed and personalized way.

Customers are more informed, empowered, demanding of and less patient with the brands they

interact with.

The Result?

Marketing’s universe is changing

Customers know more

Customers demand more

Your business expects more

… and so CMOs must re-imagine their profession

As we look to the future role of marketing, we must remember the timeless responsibilities of the function.

Marketers have always been responsible for knowing the customer.

Marketers have always been responsible for defining what to market, and how to market.

Marketers have always protected the brand promise.

The timeless responsibilities of our marketing profession

Today, these fundamental responsibilities provide the foundation for the three imperatives of a new profession.

Marketers have always been responsible for knowing the customer.

The three imperatives of a new profession

Understanding each customer as an individual.

Creating a system of engagement that maximizes value creation at every touch.

Designing your culture and brand so they are authentically one.

Marketing organizations in outperforming companies embrace these imperatives

Revenue Growth / Gross Profit Growth3-year CAGR, 2008-2011

Engage:optimize

experienceacross all channels

Analyze: sophisticated and cross company marketing analysis

Low High

Low7% / 6%

10 % / 12% Outperformers

Source: IBM Center for Applied Insights: analysis of 100 public companies and their responses to the 2012 IBM Global Marketing Survey.

Imperative 1: Understanding each customeras an individual

Let’s start with a story…

Have you ever felt that a company is grouping you with a population thatyou don't relate to?

Meet my mom, Iris

72 years old

Loving grandmother of two

Professor of Marine Science, William & Mary

Our customers are demanding that we know them as more than a transaction, more than a demographic, more than a segment.

What do they hunger for?

What is the deeper need we are trying to address?

What do they want that they can’t quite express yet?

What is not just their next best action, but their next possible aspiration?

The best brands are very strategic about which touchpoints get instrumented and what data about individuals emerges as a result.

What is your instrumentation strategy to learn more about customers as individuals?16

Transactions

Orders

Paymenthistory

Usage history

Purchasestage

Email / Chat

Call center notes

Web click-streamsIn-person

dialogs

Opinions

Preferences

Desires

Characteristics

Demo-graphics

Attributes

Demographicdata

Transactiondata

Interactiondata

The great leap is into all the data that lies outside our enterprise—and into the new insights that data offers.

What is your strategy for attracting data from beyond our borders?

Behavioraldata

How predictive must your insights about customers be?

Transactiondata

Interactiondata

Descriptive analyticsPredictive analyticsPrescriptive analytics

Email / Chat

Call center notes

Web click-streamsIn-person

dialogs

Opinions

Prefer-ences

Desires

Character-istics

Demo-graphics

AttributesArmed with new analytics, we are able to enter the world of predicting the next best offer, action or need.

Transactions

Orders

Paymenthistory

Usage history

Purchasestage

Demographicdata

Behavioraldata

Imperative 2: Creating a system of engagement that maximizes value creation at every touch

How our customers behave today

Online

Mobile

Call center

Social

Kiosk, ATM

Point of sale

Postal mail

Marketer

One person behind all the

channels, guiding the dialogue

and relationship

How our customers expect us to behave

Online

Mobile

Call center

Social

Kiosk, ATM

Point of sale

Postal mail

In reality, here’s what our customers experience

Online

Mobile

Call center

Social

Kiosk, ATM

Point of sale

Postal mail

agenda

strategy

agenda

strategy

agenda

strategy

agenda

strategy

agenda

strategy

agenda

strategy

agenda

strategy

agenda

strategy

Marketing

Leading Marketers are working to create systems of engagement that…

Satisfy and delight customers because they deliver experiences:–that are personalized and relevant–which feel like a service

Facilitate “hyper personalization” across millions of customers and interactions

Enable constant testing and adjustment of tactics

When this is done well, your employees naturally deliver on your brand promise, your customers become your advocates,

and they cascade the positive effect

1:1 Marketing Continuous Customer Engagement

Marketing All customer interactions

Controlled and planned (campaign focused) Agile (customer focused)

Loyalty programs Inferred loyalty

Opportunistic and reactive Sensory, real-time, and location aware

Micro segment personalization Contextual hyper-personalization

Owned (addressable) media Paid, earned, and owned media

Business concept shift from “1:1 Marketing” to “Continuous Customer Engagement”

“Continuous Customer Engagement” means systematically interpreting and evolving a comprehensive understanding of an individual in order to engage that individual in a productive manner in any brand interaction

Is my product delivering value to the customer?

Does the customer need help now?

Is the customer in market now?

What is the right product for this customer?

How does the customer perceive my brand?

Does the customer have enough information to make a

decision?

Will the customer act if we make an offer now?

What price should I charge?

Is the customer using my product effectively?

Is the customer willing to advocate for my brand?

What is the potential of this customer?

How should I differentiate my treatment of this brand advocate?

Systems of engagement matter because when you get it right every interaction becomes valuable.

Marketing becomes so natural that it’s experienced as a service.

Imperative 3: Designing your culture and brand so they are authentically one

In the past, when someone had a bad experience with a company, only the individual would experience it.

Now, the world can know instantly.

THE TWEET THAT KILLED MY COMPANY

Now, we have to pay equal attention to every employee and to everyone in our supply and distribution network—each one is now a touchpoint.

Customers

In a world of total transparency, that task is on a much different scale.

We must build authentically great companies and, therefore, great brands. And that starts with culture.

Employees Customers

An internal memo is leaked to the media

An influential blogger has a bad customer experience

Advocacy groups reveal an unethical practice in the supply chain

Every day, millions of actions driven by our culture influence what others think of our brand.

Now, we must become skilled at understanding how our institution is being discussed in the public realm.

Marketing has an opportunity to be an integrating function and also a force for transformation. 33

Designing your culture and brand so they are authentically one.

The Future practice of Marketing – the CMO + CIO Partnership

60% growthin marketing analytics spend over the next three years

$1.5 trillionspent on marketing in 2011

$148 billionin IT-related spend influenced by CMOs

The C-Suite will demand that the CMO produce both a strategy and a plan for how market-driven data will significantly contribute to corporate objectives. – 2013 IDC CMO Predictions

New Marketing Machine Has Powerful Engine, But Bad Drivers, Few Mechanics

Here’s to the future.

Elana AndersonVice PresidentIBM Enterprise Marketing Managementandersel@us.ibm.com

@elanaERA781-472-6800

t he future of marketing is the internet of things

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