APAC PERFORMANCE DASHBOARD 2013 DIGITAL MARKETING. Executive Summary November 2013

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1 APAC DIGITAL PERFORMANCE DASHBOARD 2013 Executive Summary November 2013 Copyright CMO Council. All Rights Reserved. 2013

2 APAC DIGITAL PERFORMANCE DASHBOARD TM EXECUTIVE SUMMARY CONTENTS Abstract Introduction APAC Digital Marketing Performance Dashboard Japan Digital Marketing Performance Dashboard Contributed Commentary From Adobe Affiliate Partners About the CMO Council About Adobe Copyright CMO Council. All Rights Reserved

3 APAC DIGITAL PERFORMANCE DASHBOARD TM EXECUTIVE SUMMARY ABSTRACT In this second annual look into the advancement of digital across the Asia Pacific region, a deepening divide emerges between those markets seeking performance improvements in digital engagements, personalization, measurement and analytics and those markets struggling to make the shift away from digital advertising tactics. This division between more mature markets like Australia, India and Singapore and traditional markets like China, Korea and Japan highlights where and how the very definition of digital is evolving as marketers continue to advance their case for a more measurable, business-focused strategy. The APAC Digital Marketing Performance Dashboard 2013 report highlights where and how senior marketers from across the region are shifting digital priorities and advancing digital strategies, analytics and customer-centric engagements. The study reveals significant struggles in securing budget and approvals from a still-skeptical senior management team, along with significant talent gaps both in-house and at the agency level. Similarly to 2012, mature digital markets like Australia, India and Singapore earn top marks in organizational alignment, mindset and digital readiness while more traditionally focused markets like China and Korea are still struggling to show the value and impact of digital spend. Hong Kong resides in the middle of these two worlds, advancing strategies and cultivating a ready mindset for digital transformation but lacking the talent and budget to actualize the shift. Across the board, marketers in Asia Pacific are hopeful for the customer-centric future that digital can bring to their organizations, but they lack the talent to press forward. Agencies, often managed on an ad hoc or project-to-project basis, have not delivered the business-focused results that marketers have been seeking. Yet in-house teams are also struggling to train or hire talent with deep digital knowledge. While Asia still lags behind North America in overall digital performance and readiness, the speed at which the gap is closing is significant as marketers keenly understand that there is not time to allow this evolution to move slowly. The findings from this report were gathered via an online survey distributed by the CMO Council across the Asia Pacific region. The survey was fielded in the third quarter of 2013, yielding 276 completed responses. Copyright CMO Council. All Rights Reserved

4 APAC DIGITAL PERFORMANCE DASHBOARD TM EXECUTIVE SUMMARY INTRODUCTION Customer adoption and affinity for digital channels are continuing to grow across the Asia Pacific region. According to ComScore, 41 percent of the world s Internet population now resides in Asia. Of that population, some 78 percent of Asia s Internet population is under the age of 45. Social media numbers are also soaring as one-third of the world s socially connected individuals are in Asia. While 46 percent of global consumers use social media to make purchasing decisions, 65 percent of customers in Asia turn to social as a key research and decision-making tool. As broadband becomes more readily available and mobile web gains speed and accessibility, digital engagements across a multitude of channels show no signs of slowing. By 2015, reports estimate that 40 percent of smartphone users and 35 percent of tablet users will reside in APAC. Estimates also point to more than half (57 percent) of all global mobile phones being in Asia, representing 10 times the number in North America. Singapore, as a prime example, will see 90 percent of homes equipped with broadband access by But the most telling statistic indicates that by 2015, digital advertising spend in the U.S. will reach 36 percent of total spend, but in Asia, spend will only reach 29.4 percent. While it is clear that Asia still lags behind North America in its adoption and evolution of digital, what has not yet been clearly understood is the speed and extent to which digital is advancing in the region and closing that gap in spending. This rapid advancement has seen some markets gain the support and often mandate to increase digital investments, yet some markets are still being stymied by corporate mindsets that are averse to change and slow to see as more than a functionary branding role. In the APAC Digital Marketing Performance Dashboard 2013 report, marketers reveal that digital adoption is growing, as is management s desire to test more digital programs to better reach and engage with a more digitally connected consumer. In 2012, when the initial Dashboard report was released, marketers revealed that while they were optimistic and even enthusiastic about what digital held in store for customer engagement and more efficient and cost-effective operations, there was a sense that in these early stages, the days ahead would be filled with trial and error. Many marketers were challenged by shortfalls in budgets, slowing their advancement beyond simple advertising and branding tactics online. Talent gaps also challenged marketers as nearly half of respondents believed their current teams simply did not have the right skills, experience or talent needed to take on an advanced digital strategy. Talent across the region proved hard to find, even for those who turned to agencies to bolster capabilities. One in four respondents says they are unable to find the right staff with the right skills while 34 percent say their agency capabilities are also lacking, limiting their ability to execute effectively. But a year especially in this world of digital advancement can bring a multitude of changes. Channels can come and go. New analytics platforms and solutions have emerged. Big data is a challenge that has left few brands untouched by the velocity and sometimes overwhelming stream of data that has barraged IT systems often unprepared for the melding of structured and unstructured data. But what is most evident is that customers have not slowed in their hunger for unified, connected and synchronized experiences. More than any single factor, the customer is forcing s hand to adapt. The question is: How quickly and effectively are we heeding that call? The second annual online study, fielded by the CMO Council in partnership with Adobe during the third quarter of 2013, updates the view into the state of digital adoption across the Asia Pacific region. The resulting dashboard focuses on four key areas of digital : mindset, organizational alignment that supports digital, readiness and skills required to develop strategies, execute and measure. Copyright CMO Council. All Rights Reserved

5 APAC DIGITAL PERFORMANCE DASHBOARD TM EXECUTIVE SUMMARY APAC DIGITAL PERFORMANCE DASHBOARD 2013 This infographic illustrates the state of digital adoption across the Asia Pacific region with respect to four key areas: mindset, readiness, organizational alignment and skills. All ratings are on a scale of one to 10, with 10 being the highest. The overall rating for each category is an average of the four key indicators beneath each measure. The ratings of the individual countries are then depicted below, with the highest rating for each measure appearing in that rating's specified color. As you can see, the mindset around digital adoption is strong across the region as a whole, but talent, readiness to implement and organizational alignment must improve in order to capitalize on these efforts % 68 % Believe digital will drive competitive advantage Believe customer preference and digital dependency drive adoption of digital 80 % Using analytic and reporting technologies 69 % Currently measuring 53 % Strong senior management support; receptive to piloting 38 % Strong digital champion on leadership team 32 % 14 % Dedicated director of digital or interactive Dedicated and experienced in-house digital analysts 64 % 50 % Believe digital better engages and activates audiences Believe mobile device proliferation and appeal drive digital 28 % High or progressive level of maturity 17 % High or reasonable ability to measure ROI 15 % IT is a big contributor and partner in selecting and deploying digital 23 % Channel and sales teams are pushing for more digital spend 12 % Agency is extremely effective across strategy, execution, and measurement 7 % Data is integrated throughout the life cycle HONG KONG KOREA CHINA SINGAPORE APAC DIGITAL PERFORMANCE DASHBOARD AUSTRALIA INDIA Copyright CMO Council. All Rights Reserved

6 APAC DIGITAL PERFORMANCE DASHBOARD TM EXECUTIVE SUMMARY % 68 % Believe digital will drive competitive advantage 64 % 50 % Believe customer preference and digital dependency drive adoption of digital Believe digital better engages and activates audiences Believe mobile device proliferation and appeal drive digital HONG KONG 7.1 APAC DIGITAL PERFORMANCE DASHBOARD % 69 % Using analytic and reporting technologies Currently measuring 28 % 17 % High or progressive level of maturity High or reasonable ability to measure ROI KOREA AUSTRALIA % 38 % 32 % 14 % Strong senior management support; receptive to piloting 15 % Strong digital champion on leadership team 23 % Dedicated director of digital or interactive 12 % Dedicated and experienced in-house digital analysts 7 % IT is a big contributor and partner in selecting and deploying digital Channel and sales teams are pushing for more digital spend Agency is extremely effective across strategy, execution, and measurement Data is integrated throughout the life cycle CHINA SINGAPORE INDIA Copyright CMO Council. All Rights Reserved

7 APAC DIGITAL PERFORMANCE DASHBOARD TM EXECUTIVE SUMMARY JAPAN DIGITAL PERFORMANCE DASHBOARD 2013 The infographic that follows illustrates the state of digital adoption across Japan with respect to four key areas: mindset, readiness, organizational alignment, and skills. All ratings are on a scale of one to 10, with 10 being the highest. The overall rating for each category is an average of the four key indicators beneath each measure APAC COMPARISON APAC COMPARISON APAC COMPARISON APAC COMPARISON 91 % 71 % Believe digital will drive competitive advantage Believe customer preference and digital dependency drive adoption of digital 67 % Using analytic and reporting technologies 41 % Currently measuring 38 % Strong senior management support; receptive to piloting 0 % Strong digital champion on leadership team 20 % 7 % Dedicated director of digital or interactive Dedicated and experienced in-house digital analysts 32 % 35 % Believe digital better engages and activates audiences Believe mobile device proliferation and appeal drive digital 49 % High or progressive level of maturity 13 % High or reasonable ability to measure ROI 9 % IT is a big contributor and partner in selecting and deploying digital 22 % Channel and sales teams are pushing for more digital spend 0 % Agency is extremely effective across strategy, execution, and measurement 0 % Data is integrated throughout the life cycle JAPAN DIGITAL PERFORMANCE DASHBOARD JAPAN Copyright CMO Council. All Rights Reserved

8 APAC DIGITAL PERFORMANCE DASHBOARD TM EXECUTIVE SUMMARY APAC COMPARISON APAC COMPARISON APAC COMPARISON APAC COMPARISON 91 % 71 % 67 % 41 % 38 % 0 % 20 % 7 % Believe digital will drive competitive advantage 32 % 35 % Believe customer preference and digital dependency drive adoption of digital Using analytic and reporting technologies 49 % Currently measuring 13 % Strong senior management support; receptive to piloting 9 % Strong digital champion on leadership team 22 % Dedicated director of digital or interactive 0 % Dedicated and experienced in-house digital analysts 0 % Believe digital better engages and activates audiences Believe mobile device proliferation and appeal drive digital High or progressive level of maturity High or reasonable ability to measure ROI IT is a big contributor and partner in selecting and deploying digital Channel and sales teams are pushing for more digital spend Agency is extremely effective across strategy, execution, and measurement Data is integrated throughout the life cycle JAPAN DIGITAL PERFORMANCE DASHBOARD JAPAN Copyright CMO Council. All Rights Reserved

9 APAC DIGITAL PERFORMANCE DASHBOARD TM EXECUTIVE SUMMARY CONTRIBUTED COMMENTARY FROM ADOBE By Hisamichi Kinomoto, Vice President of Marketing, Japan and Asia Pacific, Adobe I m very happy to share the second annual APAC Digital Marketing Performance Dashboard report, developed by the CMO Council and sponsored by Adobe. This year, the research reveals significant progress in some countries as digital continues to become more sophisticated, accountable, strategic and central to business growth and competitive advantage. However, we also see other countries facing challenges. In-house and agency team members lack the critical skills to take measurement and reporting to the next level, and the budgets needed to hire and retain the necessary headcount to remedy this are not forthcoming. Are we seeing the region start to develop a two-tiered approach to digital? Businesses in Singapore, Australia and India are gaining confidence, taking a more aggressive approach to investment, enjoying higher levels of executive support, measuring more complex and sophisticated metrics and building more dynamic business cases for return on investment. In other countries, however, marketers continue to struggle with low budgets and haphazard agency support, and they are working hard to measure the right elements to convince senior management that their business case for greater investment is water-tight. In spite of these country-by-country differences, all across the region we see positive signs that digital is coming of age and increasingly taking its place at the heart of the mix as a highly accountable, flexible way to generate customer engagement and interaction. In the 2012 report, we learned that executive support for digital investment was being driven by the belief that it would be a cost-effective, efficient channel and deliver a good ROI (65 percent) and that it would be better able to engage and activate audiences (58 percent). In 2013, we see those numbers hold steady at 66 percent and increase to 64 percent, respectively. Marketers and executives remain convinced about the benefits of digital. One of the possible reasons for their increasing certainty about the benefits of digital is the continuing evolution in the art of analysis and measurement in some countries in particular. Sixty-nine percent of APAC marketers are measuring digital campaigns, with 80 percent confirming they are using analytics and reporting technologies. How do they think they are performing? In India, 28 percent of marketers rate their ability to measure the value and return on digital as excellent or very good, and Australia and Singapore also rank highly at 21 percent each. However, in comparison, Korea (3 percent), China (7 percent), Hong Kong (9 percent) and the rest of APAC (12 percent) are not yet as confident in their ability to demonstrate return on investment. The research showed that marketers across APAC are generally lacking the in-house or agency analytic skills to do much more than review these key metrics. Typically, they are measuring standard areas such as web performance data (75 percent), click-through rates (68 percent), conversion (72 percent) and acquisition or lead costs (49 percent). Certainly, these are all excellent and necessary measurements, but to get to the point where it s possible to demonstrate return, more emphasis needs to be placed on critical performance indicators, which are currently low on the list such as customer lifetime value (15 percent), churn rate (9 percent) and market share improvements (12 percent). Marketers are failing to tap into the business-driving metrics that will help convince senior management, and we see the impact of this in current budget allocations. Copyright CMO Council. All Rights Reserved

10 APAC DIGITAL PERFORMANCE DASHBOARD TM EXECUTIVE SUMMARY Recommendations To advance the adoption of more sophisticated and strategic digital to build stronger customer engagement, reduce the cost of business and drive growth, we need to see a more emphatic commitment by the region s top executives to support digital for long-term success. Among many of Adobe s regional customers, we see the power of a digital champion on the executive team: business leaders with the vision to see customer experience at the heart of the business and the understanding that digital is at the heart of consistent, comprehensive, cross-channel customer engagement. To realise this vision, executives need to encourage cross-functional support from their teams, including the necessary IT expertise and support. For their part, practitioners need to take steps to increase their own skill set and up-skill their teams. Without the ability to deeply analyse data and apply insights to strategic execution, marketers won t be able to close the gap that exists today and start to prove ROI. APAC s marketers must consider digital a necessity, not an additional component or a nice-to-have strategy. The value of digital continues to be recognized, and customer preference and dependence on digital is clear. The advances that some APAC countries have made in the last 12 months are evident, and they are showing the way forward for all marketers to continue to take the steps to broaden their skills, apply business-critical metrics, build an irrefutable business case and create truly digital-centric organisations. Copyright CMO Council. All Rights Reserved

11 APAC DIGITAL PERFORMANCE DASHBOARD TM EXECUTIVE SUMMARY AFFILIATE PARTNERS MARKETWIRED Marketwired is a leader in the evolving category of social communication, with a client base that spans Fortune 500 companies, advertising and PR agencies, government, educational institutions and non-profit organizations around the world. Our solutions, powered by our innovative social intelligence engine Sysomos, are the choice of nine of the top 10 on Interbrand's list of the 100 best global brands. We help clients make sense of social media conversations in 186 languages, and we offer translation services for our distribution clients in 55 languages. An innovator since our founding in 1983, we've changed the way companies do business with breakthroughs like social media releases, embedded multimedia, SEO-enhanced press releases, and the ability to create content shaped by real-time social media insights. Learn more at QUALTRIX For a long time, the only people with access to Qualtrics survey software were our closest friends and a bunch of Scott s MBA students. It was our research clients who pushed us to open up the system and gave us the feedback needed to make it both the easiest to use and most sophisticated research suite on the market. CANADIAN ASSOCIATION With more than 800 corporate members, the Canadian Marketing Association is the largest association embracing Canada's major business sectors and all disciplines, channels and technologies. CMA is the community's leading advocate on the key public policy issues affecting both consumer and business-to-business marketers operating in the Canadian marketplace. The association is also the principal provider of knowledge, intelligence and professional development opportunities for marketers and catalyst for networking and business opportunities within the Canadian community. NORCAL BMA Established in San Francisco in 1938, the Northern California chapter of the Business Marketing Association (Norcal BMA) is the leading B2B organization in the San Francisco Bay Area and Silicon Valley. Norcal BMA offers a robust set of programs to members and the community at large, including a series of regular roundtables on various topics, as well as monthly educational and social events, networking, resources and B2B job listings. MOBILE RESEARCH ASSOCIATION (MMRA) The rapid evolution and increasing use of mobile devices such as smartphones and tablets is creating unprecedented opportunities for the research industry. This fast developing and complex industry needs a unifying body, a single voice and a place to exchange the best and most innovative ideas. Mobile Marketing Research Association (MMRA) exists to unite and serve the industry in developing best practices, professional standards and ethics regarding the use of mobile devices for research. MMRA is building a foundation for education, conducting studies and creating communications to foster this growing industry. For more information on how you can shape the future of mobile research, please visit Copyright CMO Council. All Rights Reserved

12 APAC DIGITAL PERFORMANCE DASHBOARD TM EXECUTIVE SUMMARY ABOUT THE CMO COUNCIL The Chief Marketing Officer (CMO) Council is dedicated to high-level knowledge exchange, thought leadership, and personal relationship building among senior corporate leaders and brand decision-makers across a wide range of global industries. The CMO Council's 7,000-plus members control more than $350 billion in aggregated annual expendituresand run complex, distributed and sales operations worldwide. In total, the CMO Council and its strategic interest communities include more than 35,000 global executives in more than 110 countries covering multiple industries, segments and markets. Regional chapters and advisory boards are active in the Americas, Europe, Asia Pacific, Middle East, India and Africa. The council's strategic interest groups include the Coalition to Leverage and Optimize Sales Effectiveness (CLOSE), Mobile Relationship Marketing (MRM) Strategies, LoyaltyLeaders.org, CMOCIOAlign.org, Marketing Supply Chain Institute, Customer Experience Board, Digital Marketing Performance Institute, GeoBranding Center and the Forum to Advance the Mobile Experience (FAME). Learn more at ABOUT ADOBE Adobe is changing the world through digital experiences. For more information, visit Keep up to date with news and views from APAC digital marketers on the Adobe Digital Dialogue blog at blogs.adobe.com/digitaldialogue/. Join APAC marketers on the Digital Dialogue Asia Pacific LinkedIn group. Follow Adobe Digital Marketing Cloud news and updates and join the conversation about this report via #APDash. Copyright CMO Council. All Rights Reserved