The evolution of digital technology has transformed our lives as both consumers and online users; yet how well have the companies handled this change in offering their products and services? As our lifestyles change, undoubtedly the corresponding marketing strategies should follow suit. This is the first of a series of articles that assess how marketing is shifting in response to the ongoing evolution of digital technology, with reference to the approach and initiatives of Google Japan's marketing team.
What has changed over the years, and what hasn't
Google began offering its services in Japan in 2001. At that time, the norm of digital online services was directory-type search and portal sites, and people didn’t understand either the value or the intention of Google's search engine, which focused solely on search results and didn’t offer any other information at the top of the page. In fact, unlike in the U.S., Google's products and brand offerings did not take off at first. However, ten years later, in 2011, Google ranked at the top in the annual consumer brand category of the Brand Japan Survey; and this year, Google’s YouTube ranked second in the same category. After 14 years, Google is finally establishing itself as a brand, both as a company and a service provider.
The evolution of technology, especially in the increased use of smartphones and the internet, has drastically changed how users behave and live every day. Consequently, this creates a need for companies to reassess their approach to marketing. We, at Google, are no exception. Each day, we are exploring and learning what the new marketing norm looks like. At the same time, Google also plays a role in driving the evolution of the digital marketing platform, which influences how marketers connect and engage with their intended audiences.
Involvement on both sides of marketing, as a marketer of the Google brand and its products as well as pushing our platform innovation, is a very rare and fortunate experience for me. In the following series, we introduce the Google marketing team’s explorations and discoveries and share our insights on the following three points. Hopefully we’ll be able to shed some light on the various marketing challenges and opportunities within the Asia Pacific region.
- Why: Why is it important now for CMOs and other business leaders to understand digital technology? How has digital technology changed consumer behavior?
- What: In what ways will marketing change due to digital technology? What can marketers do to maximize marketing’s value to the overall business?
- How: How can CMOs and business leaders overcome organizational and operational challenges to implement new marketing strategies?
This first article will provide an overview of the rise of digital technology and the impact it has made on marketing so far.
What is the aim of Google's innovations in advertising?
Google's mission is "to organize the world's information and make it universally accessible and useful." The company developed its search engine based on this mission as it innovated online advertising by introducing AdWords. In fact, AdWords was also born from Google's mission. AdWords made ads relevant to a user's interests and became a source of beneficial information for the user. Simply put, AdWords increased the value of an ad's information in a transformational way by organizing the information and giving people an intuitive way to access the products, companies, and services they were looking for.
Another benefit Google offered through AdWords was access to abundant data and thus, opportunities to measure the ad performance using sophisticated metrics. Furthermore, AdWords contributed to the democratization of advertising by creating a system in which ads could be placed for as little as $1. This allows smaller organizations to run advertising campaigns at scale, which can’t happen with relatively more expensive mass media.
"AdWords contributed to the democratization of advertising by creating a system in which ads could be placed for as little as $1. This allows smaller organizations to run advertising campaigns at scale."
Has marketing changed with digital technology?
Has marketing changed due to the rise of digital technology? The answer is both "Yes" and "No." It’s a fact that the rise of new digital advertising, like Google AdWords and access to data has drastically changed many aspects of marketing from understanding user insights to communication and commerce. However, the goal and mission of marketing hasn’t changed: it’s building and strengthening the relationship between the user and the business that becomes the foundation for sustainable business growth. At Google, we call this, "Know the User. Know the Magic. Connect the Two."
What specific changes has digital technology created in marketing? The following three changes are particularly worth noting:
1. The shift to user-centric marketing
The penetration of digital technology, especially the rise of the internet, has fundamentally changed the relationship between the user and the business and hence, the way advertising plays its role within that space. Furthermore, the development of video platforms like YouTube and social network sites has transformed online ads into more than mere pieces of information; now ads can offer more powerful emotional connections with users. In addition, the fragmentation of media and the penetration of mobile technology and devices in users' lives have made it possible to send the right message to the right target at the right time. These are the first notable changes that need to be embraced by marketers and business leaders.
2. The spread of data-focused approaches
Second, marketing campaigns are increasingly based on more sophisticated data. People are spending increasingly more time on the internet, searching information, checking and sharing on social sites, and consuming entertainment. This enables businesses to gain additional insights and deeper insights into a wider population. Furthermore, digital technology has made it possible to measure the return on investment of many marketing activities. John Wanamaker’s reflection, "Half the money I spend on advertising is wasted; the trouble is, I don't know which half,” doesn’t apply in today's marketing world. We have entered an era in which we can measure our return on marketing investment in real time. This allows us to promptly respond to results, change the action plan accordingly, and improve our final results.
"We have entered an era in which we can measure our return on marketing investment in real time."
3. The importance of having a strong, lasting brand
The third change is the emerging importance of establishing a strong, lasting brand. When I started as marketer in the '90s, the notion of “brands” was first gaining attention. However, marketing executives were busy debating the minor details, such as logos and symbols, without understanding the true value of branding for their businesses. This has undergone a major transformation. Many business leaders have realized that a brand that builds a long-term relationship with its users is actually an important and valuable asset to the business. The brand also works as a fundamental factor that defines the strategic direction for business. The infiltration of the internet has consequently accelerated this trend by allowing users to access information regarding every aspect of a business. In an era that values transparency and timely dialog between a business and its users, establishing a strong sense of connection and passion toward the brand, both internal and external, is essential for a business to continuously grow.
Looking at these changes as a whole, "authenticity” could be the word that symbolizes the overall shift in how businesses are changing. Digital technology has enabled businesses to strengthen their unique yet authentic values that marketing is meant to showcase. Now, instead of one-off interactions, marketers can build a stronger and longer-lasting connection with users.
"Digital technology has enabled businesses to strengthen their unique yet authentic values that marketing is meant to showcase. Now, instead of one-off interactions, marketers can build a stronger and longer-lasting connection with users."
A 2014 survey titled “The CMO White Paper” 1 shed light on the main obstacles CMOs in Asia faced as they introduced digital into the marketing mix. Survey results showed CMOs experienced great difficulty keeping up with the pace of constant innovation that the “new” marketing required. With the accelerated growth of digital technology, the diversification of devices and platforms, and the appearance of an assortment of media players and service providers, many CMOs were at a loss as to where to even begin. Many challenges—a lack of interdepartmental coordination, organizational barriers, operational constraints, human resource gaps, and a lack of incentives, among others—ensued as they worked to achieve the flexibility and speed demanded in the digital age.
Thus, in the digital age, with its mountain of challenges, how should businesses and CMOs stay ahead in marketing? In the following articles, we hope to explain the necessity of making these changes (the why), the new approaches (the what), as well as how best to execute the new strategies including organizational and operational changes (the how). In addition, I hope to share Google’s exploratory organizational and operational efforts to constantly innovate our marketing approaches to provide insights to Japanese companies transition their marketing into the new digital era.
This article was originally published on May 8, 2015 in Japanese