The Future of Digital Marketing - The Key Is Taking a Data-Driven Approach to People (Part I)

In recent years, companies' marketing approaches have changed drastically due to the explosive diffusion of smart devices and social media. In particular, now that Internet access is available around the clock everywhere, companies have opportunities to dramatically expand the scope of the effects and influences of their digital marketing practices. In the field of digital marketing, which has just started to become widespread among corporate business fields, possibilities still await discovery. Yasushi Kobayashi, General Manager of the Digital Marketing Promotion Department (Business Application Promotion Division, System Product Strategy Headquarters), who is responsible for digital marketing at Fujitsu, spoke with us about the future of digital marketing.

Digital marketing has grown to become an integral part of companies' management strategies. What is behind such growth?

For the past several years, thanks to the continued evolution of information systems and the spread of the Internet, it has become popular to collect, share, and distribute information by making full use of multifunction devices such as personal computers, mobile phones, and various other Internet-ready devices. For managers, conventional mass marketing through mass media such as television, newspapers, and magazines has uncertain ROI, and customer information held by sales representatives has not been sufficiently visualized. However, now Internet connections have become commonplace, and as a result, consumers and company personnel have started leaving footprints in the form of website access records and reactions to push notifications sent from E-mail magazines and smartphone applications. The digital marketing field has been established by identifying and using such data in marketing strategies. Companies conventionally store information on customers, sales, campaigns, and other topics in their databases. By managing and combining such information with customer attributes and contact histories obtained through digital communication, companies can engage individual customers in a fine-tuned manner, enabling them to establish optimal, permanent relationships with customers and implement CRM (customer relationship management) that maximizes LTV (lifetime value).

In Japan, companies are making full-scale efforts to acquire and nurture prospective customers; referred to as "lead generation and nurturing." Companies make full use of digital marketing to make the most appropriate proposals to individual customers at the optimal timing for both seller and customer. By combining the huge amount of valuable information stored in conventional mission-critical systems with information obtained thanks to the advent of the digital marketing era, companies can predict purchase behaviors while deepening customer insights-this is the true value of digital marketing. If companies thoroughly endeavor to provide customers with optimal content according to the customers' interests and levels of purchase consideration, customers who are evaluating a purchase will readily accept the information and take the next action. High CX (customer experience) value may be the greatest value that digital marketing can provide customers.

The epitome of this is the concept of omni-channel, which has caught the attention of customers in the retail industry in recent years. As you may know, omni-channel integrates and manages all contact channels (e.g., a company's own stores, e-commerce sites, and social media) to provide customers with a purchase experience through which they can purchase in their own way when they want and even select the store at which to receive the product they purchased.

In digital marketing, it seems Japan lagged behind Europe and the U.S. However, with the diffusion of Internet connections, including mobile devices and Wi-Fi, Japan has started to gain momentum to catch up. In Japan, smartphones became widespread at an unusually high speed compared to the global average, and consumers' transition to smartphones also went smoothly. With that groundwork already laid, expectations for data-driven marketing practices have been raised in Japan.

Digital marketing is interpreted in a variety of ways based on the business type and category. In promoting digital marketing, how should it be applied to which areas?

When many people hear the phrase "digital marketing," they may imagine a campaign that takes full advantage of advertising technologies. However, first of all, we at Fujitsu regard digital marketing as customer-oriented, human-centric marketing that can be realized by integrating big data, a data management platform (DMP), network and sensing technologies, and ICT. We always place our primary focus on people.

Recently, consumer lifestyles have changed dramatically. The number of consumers who put their smartphones next to their pillows before going to sleep has been rapidly increasing. In other words, now consumers can access Facebook and Twitter as well as company websites linked inside these networks whenever they want, regardless of the hour of the day. Companies cannot miss this business opportunity; it is as if there were cash registers next to the customers' pillow. The number of hours that people can be contacted each day is approaching 24.

Thus far, companies have appealed to customers and markets by distributing flyers on the street to attract customers and using advertisements in mass media and elsewhere to establish their brands. The fact that the time for business opportunities has been extended to 24 hours a day dramatically changes the conventional approach to advertisements and campaigns. We already see that digital marketing, which makes full use of ICT to approach people, will dramatically change budgets as well as a companies' internal and external resources.

What are the challenges in implementing digital marketing?

Customers now have more opportunities to access information to examine products before purchase. From a management perspective, that means right now is a great time to increase the number of business opportunities and sales.

Although the business backdrop is improving, marketing still tends to be recognized as a cost, not an investment. You must arm yourself with theories and prepare facts much more than you might imagine to make a proposal stating "sales will increase by 20% by implementing digital marketing" rather than saying "costs will be reduced by 20% by implementing digital marketing."

Customers in the marketing field often ask me for advice about how to address this problem. I suggest the quickest way is to establish cooperation among departments and share the same KPI among all parties, including the CIO and CMO, without trying to start a new movement in only one department. You may say that is easier said than done, but there is no other way. Anyway, all answers ultimately lie with feedback from customers, and the results will transform the economy, markets, companies, organizations, and stereotypes about people.

The field of digital marketing is quite diverse, which gives it great potential and opens up opportunities for future innovation. In the latter half of this interview, Yasushi Kobayashi introduces case studies based on Fujitsu's approach in this field and talks about future prospects.