Abstract

Internet usage continues to explode across the world with digital becoming an increasingly important source of competitive advantage in both B2C and B2B marketing. A great deal of attention has been focused on the tremendous opportunities digital marketing presents, with little attention on the real challenges companies are facing going digital. In this study, we present these challenges based on results of a survey among a convenience sample of 777 marketing executives around the globe. The results reveal that filling “talent gaps”, adjusting the “organizational design”, and implementing “actionable metrics” are the biggest improvement opportunities for companies across sectors.

Introduction

Wharton Professor George Day identified the widening gap between the accelerating complexity of markets and the capacity of most marketing organizations to comprehend and cope with this complexity. Although the forces of market fragmentation and rapid change are everywhere, we believe that Internet usage is the main driver behind the widening gap (Day, 2011). The 1990s being the decade of e-commerce, the early part of the 21st century has become the era of social commerce (Fader & Winer, 2012). The role of ‘‘digital marketing’’ is confirmed in a study by IBM consisting of interviews with CMOs (IBM Institute for Business Value, 2011). These CMOs formulate the following four biggest challenges: (1) explosion of data (sometimes also called big data), (2) social media, (3) proliferation of channels, and (4) shifting consumer demographics.

Three of these four biggest challenges correspond to digital marketing developments. The Internet has become one of the most important marketplaces for transactions of goods and services. For example, online consumer spending in the United States surpassed USD 100 billion (already in 2007), and the growth rates of online demands for information goods, such as books, magazines, and software, are between 25% and 50% (Albuquerque, Pavlidis, Chatow, Chen, & Jamal, 2012). Other anecdotic evidence that stresses the importance of the Internet as a transaction channel comes from Amazon where on the peak day, November 26, 2012, customers ordered more than 26.5 million items worldwide across all product categories, which is a record-breaking 306 items per second (Cheredar, 2012; Clay, 2012). Digital music sales in 2011 exceeded physical sales in the United States for the first time in history (Fisch, 2010). Besides B2C and B2B markets, online C2C markets have emerged with considerable success. Examples are LuLu, eBay, and YouTube. The rise of online use for communication is also quite substantial from around 10% in 2008 to over 20% in 2013. Newspapers and magazines have lost share in this period (Marketing news, May 2013, p. 16).