Wp Forbes Bringing Foresight to Marketing

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  • 8/6/2019 Wp Forbes Bringing Foresight to Marketing

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    Copyright Forbes 2011

    Bringing 20/20Foresight to MarketingCMOs Seek a Clearer Picture o the Customer

    in association with:

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    Copyright Forbes 2011

    Marketers priorities are customer-centric.More than hal (52%) cited customer retention as their top

    current priority, ollowed by customer acquisition (38%), and customer proftability (29%). These will remain

    top priorities a year rom now.

    Marketing budgets mirror these priorities. About our in ten executives (39%) are dedicating the largest

    chunk o their unds to customer retention; customer acquisition runs a close second (36%).

    Online tactics will see signicant lits in budgets. Over the next year, 56% will increase their online

    marketing spend, 54% will increase their social media spend, and 50% will increase their mobile

    marketing spend.

    Greater emphasis is being placed on data-based decisions.Nearly hal o respondents are increasing

    their spending on business intelligence, and 78% say there is greater scrutiny placed on what works and what

    doesnt than there was a year ago.

    Marketers are challenged to understand the infuence o their campaigns beyond the basic metrics

    o acquisition and conversion.Top perormers are using technology to get at these results and optimize

    their channels.

    Marketers are not always clear on what tools they need to meet their top challenges. Respondents

    admit being concerned about their ability to get a deeper understanding o customer interactions or obtain an

    integrated view o customer behavior. But there appears to be a disconnect in how they solve that issue, as the

    tools that could helpreconciling multiple online marketing applications and lack on an integrated marketing

    suiteare at the bottom o their list o concerns.

    Marketing is moving at light speed, but most marketers are not watching or adjusting their

    campaigns accordingly. Just 9% review their online marketing perormance in real time, and only 9% adjust

    their campaigns in real time.

    Top perormers are more proactive in tracking and adjusting their campaigns. Among companies that

    said their investment in marketing technology was world class, 27% track their perormance in real time, and

    39% adjust their campaign perormance in real time.

    While nearly two thirds o respondents said they segment and target customers based on an

    integrated view o customer behavior, that view is not necessarily complete. Just 30% have a view o

    mobile behavior, and just 34% look at social media behavior.

    Key Findings

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    Todays marketers have a wider range o options available

    than ever beore or reaching their targetsbroadcast and

    print, online marketing, social networks, mobile media,

    ash sales, location-based apps The list goes on with

    more options seeming to emerge daily. Therein lies the

    challenge. In a ragmented marketplace, how can market-

    ers provide a consistent brand experience across multiple

    touchpoints? And just as importantly, what is the impact

    o these multiple touchpoints on giving marketers a truly

    integrated view o their customers behavior? Finally, given

    the continued emergence o disruptive marketing technol-

    ogies, how can companies stay abreast, much less ahead, o

    where consumers will interact with their brands?

    In other words, marketers today need to view the cus-

    tomer with 20/20 oresight, but are caught in hindsight by

    ocusing on whats worked in the past, not what is working

    in the present or will work in the uture.

    To gain a clearer picture o the pr iorities, concerns, and

    actions o major marketers, Forbes Insights, in associati

    with Coremetrics, an IBM company, surveyed 321 mark

    ing executives at companies with more than $250 milli

    in annual revenue in the U.S. and the U.K. These exe

    tives represent companies in industries that traditionally a

    heavy users o Internet marketingretai l, travel/hospital

    nancial services/bank ing, and technology/media/telecom

    Survey respondents were asked about their eorts

    meet their goals using highly granular behavior tracki

    instantaneous data collection, social media channels a

    real-time campaign adjustments. Their answers provide

    insightul glimpse into a ast-paced uture ueled by rob

    and ar-reaching data.

    In addition, the data reveals how top perormerstho

    businesses that rate their marketing technology investme

    as a world class dierentiatordier rom average com

    nies. Marketers may be able to learn rom these dierenc

    and apply these best practices to their own eort s.

    Bringing 20/20 Foresight to MarketingIn a business environment increasingly dominated by metrics, measurements, and data-driven decision-mak

    ing, marketing executives nd themselves under more scrutiny than ever. Less emphasis is being placed o

    brandingthe traditional realm o the CMOand more on customer acquisition, conversion, and retention

    While top-level marketers agree that the prolieration o customer and campaign data is helping, not hinder

    ing, their eorts to produce ROI, many are at risk o alling behind as expectations and tactics are evolvin

    at a breakneck pace.

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    Customer-CentriC priorities

    With online marketing being driven by transactions, lead

    generation, and conversion, it is no coincidence that mar-

    keters are less ocused on brand building and more ocused

    on customer retention and acquisition.

    Asked about both their current priorities, as well as what

    they believe their priorities will be a year rom now, respon-

    dents clearly had the customer in mind. More than hal

    (52%) cited customer retention as their top current prior-

    ity, ollowed by customer acquisition (38%), and customer

    protability (29%). (Fig. 1) These remain the top priorities

    a year rom now.

    For marketing leaders, this means keeping an active

    ocus on lead generation and maximizing the value o each

    and every customer.

    We track trac and behavior closely, said the vice

    president o marketing at a global media serv ices company.

    We optimize search, email [and] display advertising. We

    even measure and optimize on lead-generation programs.

    Across ve o its 10 brands, this vertically integrated

    company serves up more than 150 million monthly page

    views to eight million-plus unique visitors around the

    world. The ocus is rmly on salessome B-to-C, but

    mostly B-to-B. We probably still dont do as much as we

    would like, the VP added, but we are always optimizing.

    Do buDgets matCh priorities?

    For the most part, marketing budgets mirror these priorities.

    About our-in-ten executives (39%) are dedicating the larg-

    est chunk o their unds to customer retention; customer

    acquisition runs a close second (36%). (Fig. 2) Yet maxi-

    mizing customer protabilitya crucial prioritydoesnot appear to be a key budget item, as just 19% said it was a

    top area o spending.

    Looking ahead to next year, dedication to retention

    and acquisition will remain strong, as more than hal o

    respondents said they intend to increase their spending on

    customer acquisition, customer retention, and customer

    protability. (Fig. 3)

    Online tactics will also see signicant lits in bud-

    gets56% will increase their online marketing spending,

    54% will increase their social media spending, and 50%

    Figure 1: What are your companys top marketing priorities?

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    will increase their mobile marketing spending. Which

    raises an important question: Are these marketers mak ing

    smart decisions by boosting their online marketing bud-

    gets in 2011 or 2012, or should these increased investments

    have occurred earlier, when pre-emptive strikes in these

    areas were more practical?

    Figure 2: What are the top areas in terms o spending in your current

    marketing budget?

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    Interestingly, while marketing needs to move at lig

    speed, marketers appear to be increasing their investme

    only ater theyve been caught o-guard by changes in t

    marketplace. In the survey, respondents were asked abo

    what key developments over the past year surprised th

    most, and many o the most important changessuch as t

    Figure 3: Over the next 12 months, how do you expect your spending in the

    ollowing areas to change?

    13

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    Increase signifcantly (10% or more)

    Increase

    Stay the same

    Decrease

    Decrease signifcantly (10% or more)

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    3

    Figure 4: The pressure to deliver

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    dverg ed.

    29 49 15 4

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    Strongly agree

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    Disagree

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    Dont know

    Twitters strength as a marketing tool, greater use o smart-

    phones and tablets, and the rise o ash-sale sites such as

    Groupontopped the list.

    At the same time, they were asked to predict what mar-

    keting-related developments would occur in the next 12

    months. And while issues such as app overload, growth o

    the tablet market, and the mainstreaming o social media a ll

    were chosen, there was little agreement as to what would be

    most important.

    Creating a uniFieD branD

    Marketings biggest challenge appears to be presenting a

    consistent, unied brand across multiple customer touch-

    pointson the Web, on social media, via mobile devices,

    and through traditional brick-and-mortar. This challenge

    extends to consistent messaging, a consistent customer expe-

    rience, and a consistent, unied view o the customer.

    Its easy to measure disparate behaviors, said the vice

    president o media, digital marketing and social media at an

    internationally known telecom and wireless company, but

    dicult to aggregate to provide a single view across multiple

    digital channels. Its easy to measuredicult to provide

    actionable insights back to the business.

    The pressure to deliver is greater than ever. Four o ve

    executives (78%) said that, compared to one year ago, more

    scrutiny is placed on their marketing eorts. (Fig. 4) Nearly

    hal (48%) report that short-term results are being priori-

    tized at the expense o long-term goals.

    One-size-ts-all volume marketing may no longer be

    eective. While marketers are getting better at synchro-

    nizing their online and ofine eorts, it is harder than

    ever to measure the sales-eectiveness o digital market-ing. Increasing the challenge, barriers to entry have allen or

    competitors, thanks in part to cheaper, accessible technology.

    Two-thirds o executives (64%) agreed its harder than ever to

    cut through the noise and be noticed. This could portend

    greater narrowcasting, as marketers target their messages to

    highly specic segments with high ly specic interests.

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    a thirst For Data

    Nothing convinces a CEO more than a clear demonstra-

    tion o returns and positive nancial outcomes, said the

    CMO o a $3 billion agency whose client list includes

    national and international retailers.

    Data has always had its place in the marketing depar t-

    ment, but the numbers are no longer being used to just

    conrm (or reute) decisions. Instead, data is increas ingly

    driving those decisions. The vast majority o those sur-

    veyed plan to dedicate resources to collecting business

    intelligence to aid data-based decision making. Nearly

    hal (45%) will increase their spending in the next 12

    months; just about everyone else (47%) will spend at

    least the same amount.

    There is, o course, a risk to having so much inorma-

    tion at ones ngert ips. Some marketers slam headrst into

    so-called analysis paralysis. As the agency CMO warned,

    there are ew enemies to knowledge as great as having

    too much inormation. The survey results conrm this.

    Two-thirds o executives are chal lenged by the prospect o

    converting data into action.

    Top-perorming marketing executives need more than

    numbers. They need connections. Measuring and moni-

    toring may have become something o a science, he said,

    but connecting dots, interpreting results, and synthesizi

    meaning is still high art.

    Theres also the risk o creativity being stied in the in

    est o sure thing data-based decisions. Six in ten o tho

    surveyed (60%) ear that a reliance on metrics preclud

    breakthrough ideas. Nearly the same percentage o exe

    tives (58%) said they spend more time analyzing than creati

    One marketing vice president summed it up: All t

    data can be addictive and can be a crutch. There is a dang

    in being too data-dependent, she said. Its about knowi

    when and where its worth optimizingrather than o

    mizing every thing or the sake o it.

    Todays best-in-class marketing executives know th

    properly interpreted data can actually drive inspiration. F

    one senior vice president at an international travel webs

    breakthroughs come when an anomalous data set provi

    some insight that we werent looking at beore.

    investing in tomorrows teChnology toDay

    Retention and acquisition may be top online marketing p

    orities, but marketers are challenged to understand th

    campaigns inuence vis--vis customer behavior. Th

    also have trouble obtaining an integrated view o custom

    across multiple touchpoints.

    leveraging short-term Data For long-term suCCess

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    Figure 5: What are your organizations top challenges related to online

    marketing?

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    26

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    While retention and acquisition are the top online mar-

    keting priorities o survey respondents, many indicated they

    were challenged to understand the inuence o their cam-

    paigns beyond the basic key perormance indicators (KPIs)

    o acquisition and conversion. (Fig. 5)

    Top-perorming marketers are taking a dierent ta

    Theyre addressing the oundation that underpins all

    these: technology. Others may be acing more o a techn

    ogy disconnect, as they are challenged to gain an integrat

    customer view, but are less concerned with reconciling m

    tiple applications or a lack o an integrated marketing suit

    Multi-source attribution just wasnt possible ten, or ev

    ve, years ago, said the senior vice president o a U.S.-ba

    consumer website with strategic partnerships on just abo

    every continent. The technology required to capture b

    ing patterns over multiple channel interactions over a 90-d

    period was too expensive. Today, even large data sets c

    be analyzed in a timerame short enough to yield actiona

    results. With todays cloud-scalable systems, distribut

    processing and columnar databases, making sense o the d

    around an individua l is possible.

    This makes sense to the COO and CFO o a national me

    wear retailer. Todays multi-channel consumer is neither of

    nor online, he said, but all-line. His company is lever

    ing technology to gain a broader view o customers, optimiz

    retail and direct channel media to stimulate demand bas

    on customers preerenceas shown by measur ing resu lts.

    And yet, when asked to rate their companys technologi

    support o online marketing, the vast majority (87%) see roo

    or improvement, and about hal o those eel they are eith

    just adequate or need some signicant improvements. (Fig. 6

    Figure 6: How would you rate your companys investment in technology to

    support online marketing, compared to your competitors?

    World class, a clear

    competitive dierentiato

    Strong in some areas, bu

    we need to improve in

    some areas

    Adequate or our industry

    but we need to improve

    We are getting by, but

    signifcant improvements

    are needed

    We are underperorming

    and radical improvement

    are needed

    13%

    42%30%

    14%

    2%

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    personalization DemanDs immeDiaCy

    Marketing is moving at light speed, but ew executives

    are watching or adjusting their campaigns and con-

    tent accordingly. O those surveyed, the majority either

    reviews their metr ics weekly (28%) or monthly (24%). Just

    two in 10 review online marketing perormance daily

    a good start, but insucient or todays demanding (and

    savvy) consumers. Fewer than one in 10 reviews peror-

    mance in real time.

    Thats overall. But those who are top perormersthose

    that say their companies investment in marketing technol-

    ogy is world classare much more proactive in tracking

    and adjusting their campaigns. More than hal o world

    class marketers review their campaign perormance in real

    time (27%) or daily (32%). (Fig. 8)

    Figure 8: How oten is your online marketing perormance reviewed within

    your organization?

    Rel-me

    Dly

    weekly

    Mly

    Qurerly

    aully

    n ll

    27

    9

    32

    19

    29

    28

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    24

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    World class

    All respondents

    Similarly, these world-class marketers are using this d

    to adjust their campaigns39% adjust in real time and 29

    indicated they adjust their campaigns whenever they revi

    the metrics. (Fig. 9)

    But just as collecting data in a vacuum is pointless,

    too is immediacy or its own sake. The true value o inst

    eedback, analysis and adjustment is presenting a person

    ized experience to the user.

    The CMO or the Americas at a major global ho

    chain understands this. Real-time one-to-one marketi

    is doable provided you have a dynamic system to custo

    ize oers on the y, he said. We typically do custom

    clustering where we provide oers based upon city or bra

    interest, then tailor creative Our insight and analytics te

    are a critica l and strategic part o our marketing activity.

    Figure 9: How oten do you adjust your online marketing campaigns based

    these reports?

    Rel-me

    Every me e reve e mer

    a regulrly deed ervl (mly, qurerly, e)

    i mer ll bel er reld

    D dju

    39

    9

    29

    29

    0

    5

    0% 50% 100%

    World class

    All respondents

    10

    5

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    when Does personal beCome private?

    top perFormers have a uniFieD view

    According to the survey data, marketing executives value

    broad, comprehensive views o their customers. Indeed,

    many respondents say theyre ocused on customer activity

    across multiple touchpoints.

    Yet, many dont actually have a handle on how their

    customers are using these dierent channels. Too many

    executives are producing data in silos, and then ailing to

    connect that data to related inormation. This lack o unied

    view is hindering eorts to deliver brand messagingand

    thereore eectively attract, convert, and retain customers.

    In the survey, nearly two thirds o respondents (65%) said

    they segment and target customers based on an integrated

    view o customer behavior. (Fig. 10)

    Asked what this includes, the top responses were cus-

    tomer service behavior, historical behavior, and online

    behavior. Just 30% have a view o mobile behavior, and just

    34% look at social media behavior. (Fig. 11)

    Marketers with a unied view o both online and ofine

    activity nd it easier to interpret data rom individual

    channel perormance. Theyre also more adept at analyz-

    ing vendor perormance and per-visit/per-session customer

    behavior. Perhaps most crucially, a unied view makes it

    Figure 10: Do you segment and target your customer marketing based o

    an integrated view o the consumers behavior?

    Yes

    No

    65%

    35%

    easier to interpret longer-term customer behaviorp

    ticularly in socia l media and mobile channels.

    We are real ly increasing our investment in this are

    said the vice president o marketing or a global IT servi

    company. We are now designing an extremely comp

    hensive 360-degree approach/system to understand o

    target customers.

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    Figure 11: What inormation does this integrated view include?

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    The VP is not alone. Other executives reported simi-

    lar eorts. And not a moment too soon. Marketers with a

    unied view are more likely to easily interpret multi-visit

    data. Theyre also more able to assess the value o a cam-

    paign based on inuence and interaction, and nearly twice as

    likely to nd it easy to interpret customer data across mul-

    tiple touchpoints.Not surprisingly, companies that rated their marketing

    technology investment as world class were most likely to

    target their marketing based on an integrated view o cus-

    tomer behavior. Nearly nine in ten (88%) said they do this

    kind o segmentation and targeting.

    At the hotel chain, its CMO is ahead o the curve.

    Weve consolidated our agencies globally or both creative

    and media. This has allowed us to leverage our scale more

    eectively, and provides a rich knowledge base or what

    works by market and customer segment in dierent parts o

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    methoDologyte rm repr bed e reul urvey d e--e erve dued by Frbe ig Mr d aprl 2011.

    Frbe ig, e cremer, iBM mpy, urveyed 321 exeuve vlved mrkeg r rpre mgeme lrge bue

    e U.s. d e U.K. all rked r mpe dure re yplly mjr le mrkeer, ludg rel, rvel/ply, fl erve,

    elgy/med/elem.

    Mre ree qurer e mpe (77%) d ul reveue $1 bll r greer, d e remg 23% d reveue le $250 mll. Mre

    qurer repde eld c-level le, ludg cEo (15%) r cMo (11%), d e re d er le ludg er ve prede, ve prede, dre

    mrkeg, d mrkeg mger.

    Christiaan rizy

    DiREctoR

    stuart Feil

    EDitoRiaL DiREctoR

    brenna sniDerman

    REsEaRch DiREctoR

    JeFF Koyen

    REPoRt aUthoR

    works by market and customer segment in dierent parts o

    the world. As a global company, he said, it must serve cus-

    tomers reacting with the brand in dierent channels, with

    dierent needsand rom dierent countries.

    Brand consistency and continuity are critical or deliv-

    ering the best guest experience to drive engagement.

    too late to play CatCh-up?

    To succeed in the marketing, executives must have oresight.

    Yet they seem to have vastly better hindsight.

    Marketers can be orgiven or not jumping oni not

    oreseeingradically new platorms, channels, and opportu-

    nities. How can someone predict the impact o ash sales or

    social gaming?

    The point isnt that marketers cant agree on the uture.

    I there are no longer one-size-ts-all solutions or reach-

    ing audiences, why should there be any or the marketers

    themselves? The point is, progressive marketers are relatively

    ewbut theyre the ones pushing the envelope, sett

    dialogues, and dening the industry. Theyre willing

    commit, experiment, and adjust. Aided, o course,

    robust data collected at every step in the process.

    Has the ship sai led, then? Is it too late or the lateco

    ers to play catch-up?

    No, said one SVP. Its never too late. Even bran

    that have a head start will need to constantly innov

    in order to keep pace with the ever-changing landscap

    The upside o instantaneous data collection is its imme

    ate availability; investments in technology can essentia

    be made overnight; and the industry is lling up w

    uture executives who have never known a world wi

    out data.

    Whats more, he added, Brands just getting into t

    game have the advantage o learning rom the success a

    ailures o its pioneers.

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    Q: What do you see as the key diferenti-ators between world-class online marketersand the laggards?

    Squire: World-class marketers have donea better job o mapping out a longer-term

    vision o how they are going to reach cus-tomers with a one-to-one message. Teyrebenchmarking where they are today and

    where they want to be, and thinking aboutthe progression pathwhat technology,what processes, what unique messagesto reach the customer do I need to use tomove to being world-class and ahead othe competition. Te laggards are trying todo a lot o things all at once without a clearpath and without clear measurement owhat theyre good at, where they have op-portunities, and where they should ocustheir eorts. World-class marketers have areally defnitive set o benchmark data that

    helps them pinpoint how they measure upagainst the rest o the best and where theyneed to improve.

    Q: Only 13 percent characterized them-selves as world-class marketers. Nearly

    hal said their perormance was only ade-quate or worse. What do you make o that?

    Squire: Only the paranoid survive, toquote Andy Grove. Tirteen percentseemed a little high to me in terms oworld class, i they really rated them-selves airly across all measurements. Iyoure in that upper echelon, its not likeyou just woke up one day claiming to beworld class. You actually worked reallyhard at it, and you realize what the ruitso those labors areyou can see what yourbrand looks like, how your customers

    embrace the brand, how e ciently yourbusiness runs. You know that to stay there,youve got to continue that hard work.

    Q: Consumers are moving aster than

    ever. How can marketers stay ahead othe pace and avoid being blindsided by

    such trends as mobile devices, witterand Groupon?

    Squire: Companies that want to keep upwith their customers, attract new custom-ers, and steal customers rom competitors

    are going to have to think about whethertheir marketing and services move asast as consumers. We as consumers arebeing provided with technology we neverhad beoreways to engage we neverimagined. I saw a perect example theother daya 13-year-old kid riding hisbike down the street and hits the brakesand pops out what looked like a Droid o

    some sort. He was sitting there stoppedon his bike, tapping away. When I was akid, the only thing that stopped me wasbeing stung by a bee or getting a at tire.Youd never just stop in the middle o thestreet and bend over and start looking atsomething. But that device had stopped hisorward momentum. Tere are so manyways that consumers can be disrupted andengage. A marketer wants to be there andmoving at the same speed.

    Q: What would you say is the next big

    thing thats going to change consumerbehavior?

    Squire: One big area is the move towardtouch-screen commerce with tablets andmobile devices, going rom typing towardssomething that has a richer and moretactile eel. One example is Nordstromannounced theyre going to give tablets totheir in-store personnel to help customerswith the shopping experience. Weve had thisconcept that consumers are going to needmobile devices, well yes, but store associatesare also, in helping customers have a richexperience. ake the concept o theNordstrom catalogits a beautiulcatalog. It displays products wonderully.Now put that into a digital mode and itsa vivid and interactive representation o

    products and brand and service. Anotherexample is the iPad application called Flip-board, which is a brilliant way o providingnews and photos and video in the traditionalmagazine and catalog ormat we love. Andmobile commerce is going to go rom 5 or 6percent in the U.S. right now to 15 or 16 per-cent by the holidays. In the U.K., its alreadyrunning at 12 or 13 percent. We as marketersneed to get our arms around that. And withmobile comes geo-location data, so you knowwhere everyone is at any given moment andcan add elements relevant to that.

    Q: So i Im a marketer and Ive read thereport and understand its ndings, whatshould I do next?

    Squire: Marketers are going to have tobalance short-term activitieshow are yougoing to creatively tell the story o yourbusiness, how to attract and retain morecustomerswith how they architect mar-

    keting organizations or the uture. Tatmeans understanding how to reach cus-tomers today, while working with a trustedadvisor who has a longer-term view owhat technology pieces and processes canhelp an organization get to best in class.Te next step is looking or a team that canhelp you down that path, most importantlywith a measurement system that tells youwhether youre headed in the right directionor wrong direction and where you need toplace investments.

    World-class marketers have a really defnitive set o benchmark data

    that helps them pinpoint how they measure up against the rest o the bestand where they need to improve.

    IBM Coremetrics Perspective on Forbes 2011 Marketing Study

    About Coremetrics, an IBM Company

    Coremetrics, an IBM Company, a leading providero web analytics and marketing optimization solu-tions helps businesses relentlessly optimize theirmarketing programs to make the best oer, everytime, anywhere, automatically. More than 2,100online brands globally use Coremetrics Sowareas a Service (SaaS) to optimize their online marketing.

    Corporate Headquarters

    1840 Gateway Drive, San Mateo, CA 94404

    Phone 866.493.2673 www.coremetrics.com

    Youve read the report.

    Youve read this interview.

    Now what?

    Visit www.Coremetrics.com/

    Forbes2011 and hear directly

    from the marketing pros that

    are keeping ahead of their

    customers ever-changing needs.

    Visit www.CoremetricsVoice.

    com to hear the Voice of Reason,

    and understand why you should

    change your marketing behavior

    to keep up with your customers.

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