Why Big Brands Are Bad At Digital Marketing
One thing that continues to confuse me is why big brands are so terrible at digital marketing. In theory, big brands are perfectly positioned to be best in class when it comes to digital marketing.
They have billions in revenue, millions of existing consumers, fantastic distribution, and potentially limitless digital marketing budget. Yet I can think of countless big brands that are a perfect example of what not to do when it comes to digital marketing.
Big Brands And Traditional Marketing Strategies
So why do big brands so often miss the mark when it comes to digital marketing? And why, in my opinion, are they (in most cases) wasting all of their digital marketing spend?
In many cases, large brands, especially if they’re within a portfolio, will hire market research agencies who will conduct both qualitative and quantitative studies — things like market segmentation and brand tracking — to understand where a brand fits within the overall competitive landscape.
What’s really interesting here is I believe the insights that traditional market research produce are really fantastic. The problem is, typically, market research is led by a chief engineer officer or something of that nature. The work is done, and then it is not properly translated to the brands.
The brands, in many cases, then fail to share that market research or the full understanding of that market research with their marketing agency, or the marketing agency just completely ignores that market research.
And, if you didn’t know, the way marketing agencies traditionally win their business is by pitching their best ideas to the brand. And the way they come up with those ideas in many cases is by leveraging freelance creatives.
So, you have marketing agencies pitching ideas from freelance creatives that are not based on market research. And it’s no surprise that there’s a common saying: “You don’t know which half of your marketing budget is being wasted.”
The Wrong Approach
Traditional marketing strategies are often built around a single campaign. And that single campaign is often very broad-reaching in nature because it’s often being leveraged for TV. Where big brands fail when it comes to digital is they take this TV-centric approach, this reach-centric approach, and try to just leverage digital as a reach extender.
So instead of creating digital-specific creative, they’re simply taking their TV creative, which is designed specifically for a large and broad audience. And then they’re just using digital as a reach extender, using that same creative and getting in front of more people or potentially the same people but with a higher frequency.
The reason this is an inefficient strategy is because it completely ignores the strengths of digital marketing. The beauty of digital marketing is the data, and what the data can tell us is where in the consumer-decision journey are consumers. Are they in the awareness phase, the consideration phase, or the conversion phase?
It can also tell me what persona a potential target audience may fit within. So, as an easy example, if I have two product lines — one male, one female — if someone visits the male product page, I’m going to show them creative specific to males and specific to that product.
And on the counter side of that, if someone visits the female product, I’m going to show them creatives specific for that audience and that specific product.
This is where big brands fail. They take their TV assets and show those generalized assets to everybody. And that can work in some capacity. But, again, they’re missing digital strength.
Success In A Digital Environment
What does a big brand need to do in order to succeed in the digital environment? First and foremost, they need to look to startups and digitally native brands. Startups and digitally native brands do a few things very differently than large brands.
First and foremost, they have the talent and resources necessary to execute on a digital strategy. Those who are good at traditional marketing are not necessarily — and often, in most cases — not good at digital.
What does this mean? This means they have digital creatives. This means they have digital marketers. This means they have data and analytics data scientists.
Perhaps additionally, startups and digitally native brands are often much better at leveraging data than big brands, despite the fact that big brands always promote and talk about how much data they have collected.
Data is useless to me if it doesn’t help me better identify potential consumers to allow me to deliver a more accurate message or, better said, to deliver the right message to the right consumer at the right time with the right offer.
Furthermore, big brands are often heavily limited as it relates to technology, their tech stack as compared to a startup. For example, big brands often build their websites on large platforms like Sitecore or Demandware, which require significant investment and significant developer time.
Whereas, if a direct consumer brand is built on Shopify, they don’t have to worry about that at all. And I know I mentioned this one already, but it’s really worth revisiting. Digital brands doing a much better job of creating digital specific assets often buy channels, so specifically created for Facebook and Instagram as compared to YouTube.
Whereas, again, big brands will typically just take their TV assets, put them on every single platform and show those ads to an extremely broad audience.
Big Potential For Big Brands
So are big brands forever doomed to be terrible at digital marketing? I actually think that’s not the case at all.
I’d say they’re in a much better position than a startup or digital-first brand. Because they already have brand loyalty, they already have distribution, they already have an existing consumer base.
If I already have those things, the hard work is done. Then I can leverage digital, I can leverage data, I can leverage different platforms to deliver the right message at the right time to the right consumer with the right offer.
I’m not necessarily changing what I’m selling; I’m just changing how I’m communicating. And if I am able to do that, I will see a significant improvement in terms of my return on ad spend, my ROI, etc.
So even though a big brand may be terrible at digital marketing today, they are in a really good place to revamp their efforts and actually far outcompete these startups and digital-first brands.