wp the implications of the splinter net and future of web analytics

8/4/2019 WP the Implications of the Splinter Net and Future of Web Analytics

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A Forrester Consulting Thought Leadership Paper Commissioned By Webtrends

The Implications Of The Splinternet And Future OfWeb Analytics

September 2011


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Forrester Consulting

The Implications Of The Splinternet And Future Of Web Analytics

Page 1

Table Of Contents

Executive Summary ................................................................................................................................................................................. 2The Current State Of Digital Marketing ............................................................................................................................................. 2The Splinternet Is An Equal Opportunity Disruptor ........................................................................................................................ 3The Solution .............................................................................................................................................................................................. 7Key Recommendations ......................................................................................................................................................................... 13Appendix A: Methodology .................................................................................................................................................................. 14Appendix B: Demographics/Data ....................................................................................................................................................... 14

2011, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources.

Opinions reflect judgment at the time and are subject to change. Forrester, Technographics, Forrester Wave, RoleView, TechRadar, and Total

Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. For additional

information, go to www.forrester.com. 1-IQATKP

About Forrester Consulting

Forrester Consulting provides independent and objective research-based consulting to help leaders succeed in their organizations. Ranging in

scope from a short strategy session to custom projects, Forresters Consulting services connect you directly with research analysts who applyexpert insight to your specific business challenges. For more information, visit www.forrester.com/consulting.


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Page 2

Executive Summary

In May 2011, Webtrends commissioned Forrester Consulting to study the phenomenon frequently referred to as the

Splinternet. In conducting in-depth surveys with 210 global, senior-level digital marketers across industries, Forrester

found that many marketers are struggling with the fragmentation of technology standards and customer touchpoints

across proprietary digital platforms and devices.

Key FindingsForresters study yielded three key findings:

The Splinternet disrupts the marketing landscape. Technology and channel fragmentation are a very realphenomenon; marketers know that adapting to a multichannel environment is critical and are racing to

understand the effect of the Splinternet.

Marketing strategies need a reboot. Firms must take a fresh look at their foundational strategies to evaluate howthey will create mutually beneficial relationships with customers in light of new channels, technologies, and the

expectations of sophisticated consumers.

Multichannel success requires mastery of multiple disciplines. Firms must take a multidisciplinary approach toharnessing the opportunities that the Splinternet presents. Technology, organization, process, and measurement

are all interrelated contributors to a marketing organizations effectiveness.

The Current State Of Digital Marketing

Marketing is going through a period of rapid and significant evolution. The era of an easily compartmentalized Internet

comprising the web browser, well-defined touchpoints, and open technology architectures has been usurped by

the Splinternet, a large-scale fragmentation of devices, data access, and technology standards. The Splinternet has an

expansive effect because it breaks many of the foundational assumptions upon which digital marketing is based:

Connected devices go beyond the PC. Smartphones, Internet-connected devices, and new devices such as tabletcomputers create a diverse world of connected, overlapping devices. Customers are now capable of being online

24 hours a day, raising the bar for original and creative marketing content, but also providing firms with ample

opportunities to establish a relationship.

Social media inverts data ownership. Consumers generate more data than ever, but they are retaining control ofthat information. Social networks retain control of data based on personal networks and password-protected

sites, ultimately withholding massive sources of insight from digital marketers. This changes the balance ofpower for the control of data.

Marketing standards shift. As touchpoints diversify and platform vendors assert control over access andtechnical standards, marketers must adapt to a strategy of marketing in a world of walled gardens. Each

touchpoint requires its own technology, processes, and measurement strategy.


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Page 3

Everyone is an analyst. As channels and customer touchpoints increase, marketing has become a highlycollaborative environment. More stakeholders in the business need access to marketing insight than ever before.

Firms need to provide marketing stakeholders with relevant and timely reports and analysis to support

decision-making.

The Splinternet Is An Equal Opportunity Disruptor

The survey findings make it abundantly clear that the Splinternet is a real and pervasive phenomenon that affects firms

of all sizes, geographies, and industries. As a result of this great equalizer, nearly all firms are affected by technology and

touchpoint fragmentation, and they face a marketing landscape of remarkably similar challenges and opportunities:

Multichannel marketing is critical. Firms reported a high-level understanding that multichannel holds value.This recognition extends to both benefits for companies in terms of sales and profits as well as satisfying

customer expectations (see Figure 1).

Figure 1

Firms Grasp The Importance Of Multichannel Marketing, But Big Changes Are A Bit Harder To Make

Base: 210 North American and European marketers

Source: A commissioned study conducted by Forrester Consulting on behalf of Webtrends, July 2011

To what extent do you agree or disagree with the following statements about multichannel

marketing?

19%

23%

30%

26%

27%

37%

31%

37%

36%

33%

37%

38%

46%

48%

42%

50%

47%

49%

33%

27%

20%

19%

22%

18%

16%

13%

11%

14%

11%

10%

8%

3%

3%

1%

3%

4%

2%

1%

2%

1%

0% 25% 50% 75% 100%

Our organization must change dramatically to enable becoming amultichannel company

A multichannel customer is worth substantially more to us than asingle channel customer

Our company must rethink how it services customers to become a truemultichannel company

In the future, our multichannel strategy will be a key factor in how wedevelop products and services

In the future, our multichannel strategy will be a key factor in how weinvest in technology to support our channels

Being an effective multichannel company will be critical to our long-term success

Customer expectations for cross-channel or multichannel relationshipswith companies and brands have changed dramatically

We will drive more sales and profit by becoming a multichannelcompany

To serve todays customers, we have to improve our multichannelcapabilities

Completely agree - 5 4 3 2 Completely disagree - 1


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Page 4

Customers want everything to be the same across all touchpoints and devices. Customers also expect everything to

be available instantly. They send an email and expect a response within hours not days. (Marketing Executive,

Retail)

It is starting to get to the stage where we offer promos and marketing campaigns to individual people in

organizations. That segmentation becomes incredibly complicated. Some want an email, some want text, some want

to do collaboration sessions online. Channels have become incredibly complicated. If you connect to people through

the wrong channel, it can be a relationship breaker. (Marketing Manager, High Tech)

Social media dominates share of mind and wallet. Emerging channels are a major fixture and cause offragmentation driving the Splinternet, most notably social and mobile. Firms reported that they are most active

in social networks when expanding beyond traditional interactive channels, often at the expense of other

channels such as mobile (see Figure 2).

Figure 2Social Is Soaking Up Marketers Attention



As far as digital marketing, generally I direct digital marketing that supports our stores from [microblogging sites],

[social media sites], email, and website enhancements. We do not do mobile at all currently. Its beyond our current

capacity. We dont have the staffing for it. It is literally beyond our capacity. (Marketing Manager, Retail)

Measurement issues create a self-defeating cycle. Firms reported that measurement is a top challenge foradapting to fragmentation. The failure of measurement to keep pace creates significant barriers to adoption for

Beyond traditional interactive channels such as search and website marketing, in which emerging

channels is your company currently conducting marketing activities?

79%

56%

54%

52%

41%

34%

30%

26%

13%

12%

2%

Company presence in social n etworks

Company advertising in social networks

User generated content such as blogs, reviews, ratings, etc.

Mobile applications

Mobile web browsing

Mobile messaging such as SMS

2d barcodes

Tablet computing

Games

Kiosks

Other


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Page 5

marketers because respondents simultaneously indicated that uncertain ROI is the top barrier to adopting new

channels in their organizations (see Figure 3). The source of this issue lies in the fact that most firms only

measure basic metrics rather than deep, business-oriented key performance indicators (KPIs) (see Figure 4).

Figure 3

Proving ROI And Lack Of Budget Create A Vicious Cycle Of Barriers

Base: 210 North American and European marketers (multiple responses accepted)


"Please indicate the barriers, if any, that prevent your marketing organization from adopting new

channels?"

49%

31%

31%

23%

22%

21%

19%13%

12%

12%

11%

4%

3%

1%

Uncertain ROI

No budget allocation

Company bureaucracy

Cost is too high

Unfamiliarity with appropriate technologies and vendors

Data security risks

Lack of skills and resourcesDiff iculty working wi th IT or external partners for

Legal issues

Lack of executive support/sponsor

Concern about negative feedback from customers

None. There are no barriers.

Negative feedback from within the company

Other


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Figure 4

Firms Are Measuring But Long-Range Key Performance Indicators Lag



We dont have specific metrics at this point. The driver to our social work is that you know you need to be in certain

places, targeting certain group of consumers, just havent figured out if were reaching them thoroughly and

measuring if impact is turning into sale or brand awareness. Were seeing where our brand awareness is, but it is

hard to break out which part of our marketing dollars are pushing those levers. (Marketing Executive,Manufacturing)

I dont think we know what constitutes success with our social programs. We dont have any traditional

measurement tools beyond measuring activity on pages. We have not been able to link activity to sales in any way.

(Marketing Director, Consumer Packaged Goods)

Online marketing is being used more and more to justify offline marketing. This is a resource drain to the digital

marketing team, and it isnt an exact science, also it creates more arguments over attribution. Brand marketers see

their budgets dropping and are desperate to justify their activities. (Marketing Executive, Retail)

It is easier to buy technology than to develop organization and processes. The survey found that firms are mostlikely to invest in technology and third-party services to support emerging channels, above skills and staff, andfar above creative development (see Figure 5). This data suggests that firms are pushing to enter emerging

channels as quickly as possible, potentially at the expense of long-term success built through the development of

in-house intellectual property and holistic programs.

"What metrics does your organization currently use to measure the success of emerging

channels?"

57

52%

50%

43%

41%

37%

35%

35%

31%

30%

28%

20%

19%

15%

5%

1%

Click-through rate

Conversion rate (orders, leads, application s, etc)

Lift in brand awareness or affinity

Sales or revenue

Overall return on marketing investment (program dollars)

Customer satisfaction

Customer retention

Return on ad spend

Cost per Sale/Customer/Order

Share of customer wallet

Cost per lead

Customer life time value (LTV)

Average order value

Improved internal efficiency/productivity

We do not h ave specific metrics in place

Don't know


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Figure 5

Firms Will Spread The Money Around To Fill Numerous Holes In Their Emerging Channel Capabilities



Our company struggles to recruit the right people who can manage marketing in a fragmented environment.

Traditional marketers lack the skills to succeed. We also need the right data analysts. Our teams need to cope with a

rapidly changing environment. (Marketing Executive, Retail)

The SolutionBy universally disrupting nearly all markets, the Splinternet creates a tremendous opportunity for those organizations

that learn to transform the challenges of fragmentation into productive customer engagement capabilities. Channels

and technology are finally able to support truly mutually beneficial relationships between firms and customers.

Marketers agree that fragmentation presents significant opportunities to firms, spanning the customer life cycle and

providing increased communication relevance (see Figure 6).

"Where will your firm invest to support emerging channels?

53%

51%

47%

47%

37%

35%

28%

27%

1%

Technology to execute activities in emerging ch annels

Third party services such as agencies and consul tancies

Technology to track and measure activities in emerging chan nels

Skills and staff to develop and manage activities in emergingchannels

Creative development to support activities in emerging channels

Technology to manage processes for marketing in emergingchannels

Media placement or messaging

Technology to manage data from emerging channels

Other


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Figure 6

Fragmentation Is An Opportunity For Segmentation And Targeting To Drive A Variety Of Objectives



Rather than ignore or resist fragmentation, firms must take advantage of this opportunity by embracing and aligning

the following components:

Use strategy as a foundation. First and foremost, firms must develop an overarching strategy from which todirect the tools, organization, processes, and measurement capabilities that are necessary to succeed in a

fragmented marketing ecosystem. Survey respondents indicated that strategy is the number one skill they need

in the next five years as media fragmentation occurs (see Figure 7).

"What opportunities does media fragmentation present to your organization?

79%

62%

61%

57%

56%

50%

50%

47%

42%

40%

40%

34%

31%

25%

24%

14%

Abili ty to deliver more targeted or relevant commun ications

Increased customer engagement

New customer acquisition

Increased customer loyalty

Ability to meet customer preferences

Market research and/or customer intelligence

Brand building

Increased revenue

Customer service

Reduced reliance on mass media to drive business

Increased market share

Supporting other channels

Product innovation

Driving traffic to stores

Supporting partners

To main tained parity with competitors


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Page 9

Figure 7

Strategy And Campaign Process Skills Top The Wish List



With these emerging channels you can focus so much better. You can get down to the micro level. You can talk to

consumers at a level you cant engage in when doing mass media. You can send them content or make them aware of

content that is of interest to them. You can segment them. You can find folks that are passionate and followers and

support you along the way. Grassroots campaigns. Question is you have to find it and how to use it, itspowerful.(Marketing Executive, Manufacturing)

Expand your toolkit. Successful adaptation to the Splinternet requires a range of technical capabilities. Firmsshould aim to create a well-balanced, holistic technology portfolio addressing analytics, execution, content, and

optimization.To streamline processes and resources, technology assets must be integrated into a unified

solution where possible. For example, when considering social engagement solutions, marketers should ensure

that their solution of choice combines app creation, content management, and tracking capabilities. Survey

respondents indicated that execution technologies such as content management and campaign management

will be the most critical to their marketing organization over the next five years, followed by analytics

technology such as web analytics, targeting, and mobile analytics (see Figure 8).

As media fragmentation occurs, what skills do you predict will be most critical to your marketing

organization over the next five years? Rank up to 5 in order of importance

50%

13%

8%

4%

5%

6%

3%

3%3%

2%

1%

7%

15%

10%

13%

12%

6%

10%

6%

6%

10%

4%

6%

14%

11%

13%

9%

7%

12%

7%

8%

6%

5%

9%

6%

13%

11%

8%

14%

9%

8%

6%

11%

3%

5%

5%

9%

9%

12%

10%

5%

14%

15%

7%

7%

Strategy

Campaign planning

Technology integration

Campaign analysis

Skill with on line applications

Data management and segmen tation

Communications

Budget management

Cross fun ctional coordination

Creative design

Agency management

Ranked 1 Ranked 2 Ranked 3 Ranked 4 Ranked 5


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Figure 8

Execution And Analytics Capabilities Are Key To Coping With Fragmentation



Build for scale. Marketers are not strangers to substantial amounts of data, but the Splinternets diversity ofdevices, touchpoints, and technologies drives massive growth in data volumes and the number of data streams.

As data output continues to grow at an exponential rate, it is vital that firms focus on managing data

macroscopically. Organizations must adapt their infrastructure and data management strategies to ensure aholistic approach to collecting, processing, and storing data as well as making that information available

efficiently for marketing analytics and operations.

Develop the organization. Adapting to the Splinternet requires a concerted effort to build up organizations withthe skills, structure, and bandwidth to operate in a high-speed, fragmented environment. Along with focusing

efforts internally, firms should consider leveraging the operational and strategic expertise of external agencies

and consultancies. Firms reported that they are developing centralized marketing teams to consolidate

capabilities across channels, lines of business, and products to facilitate multichannel marketing (see Figure 9).

Organizations also extend beyond in-house capabilities, as many firms reported that they employ third parties

to support emerging channels and adopting technology for multichannel marketing (see Figure 10).

As media fragmentation occurs, what technologies do you predict will be the most critical to your

marketing organization over the next five years? Rank up to 5 in order of importance.Note: Top 10 technologies shown.

28%

10%

4%

11%

3%

3%

4%

3%3%

3%

9%

7%

3%

10%

7%

9%

5%

4%

7%

6%

5%

9%

10%

3%

8%

5%

5%

5%

2%

7%

5%

4%

10%

3%

8%

9%

6%

6%

5%

3%

6%

8%

6%

5%

5%

4%

8%

8%

4%

2%

Web content management

Multichannel campaign management

Social media analytics

Mobile content management

Web analytics

Social media/online community man agement

Data management and integration

Targeting and personalization

Visitor/Customer database

Data mining or predictive modeling

Ranked 1 Ranked 2 Ranked 3 Ranked 4 Ranked 5


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Figure 9

Multichannel Marketing Requires A Focused Organizational Approach



Figure 10

Firms Rely Heavily On Services To Support Technology



The days when marketers could sit in their own little silo are over. These new touchpoints arent just a marketing

activity, they involve IT and many parts of the organization. (Marketing Executive, Retail )

Because of technology changing so fast, having 1-2 people who are familiar with it is not possible. Its better to rely on

outside resources. (Marketing Executive, Manufacturing)

"Please describe your firms organizational approach to support marketing across multiple

channels.

49%

26%

15%

10%

Centralized marketing team, consolidating all techn ologyand services across ch annels, products, and corporate

groups

Decentralized marketing team, brands, product teams,corporate groups have independent marketing capabilities

Hub and Spoke certain capabilities are centrallysupported but product teams or corporate groups have

some autonomy

Marketing is organized by chann el

"Please describe your firms technology approach to support marketing across multiple channels.

25%

24%

17%

16%

14%

3%

1%

We have a hybrid approach of working with technologyinternal ly and external providers

We have a primary technology platform that supportsmost functions

We have an agency or service provider that provides amanaged service for technology

We have built our own technology to support marketing

We use best-of-breed technology for most fun ctions

We have a hybrid approach of working with third-partysoftware providers and internally developed technology

Other


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Measure the right things, not everything. Fragmentation is a double-edged sword in terms of measurement: Itgenerates massive amounts of data from which to perform measurement, but the sheer volume of potential

metrics can cause paralysis or misdirect unsuspecting marketers. Fortunately, firms do not need to measure all

the data, they just need to measure the right data, shifting from breadth-based approaches to focus on depth in

measurement strategy. This entails defining KPIs at multiple levels: first for channel-specific activities to

determine tactical success, and second, a set of global KPIs to support standardized measurement and

attribution across channels.

Success is really hard to measure. One of the biggest challenges. The vast majority of our measurement is in terms of

inquiries, leads, pipeline driven and its really difficult to measure a social network in that way. How do you measure?

Numbers of members in the community? Or getting the CIO of the biggest company in the country rather than 15

smaller CIOs? Its about quality and quantity of people in the community.(Marketing Director, Consumer Packaged

Goods)

Its being able to attribute all pieces of marketing and sales engagement in one inquiry that leads to opportunity.

(Marketing Manager, High Tech)


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Page 13

KEY RECOMMENDATIONS

Without a doubt, the fragmentation that is central to the Splinternet creates challenges to marketing organizations. But

more than disruption, fragmentation embodies a once-in-a-generation opportunity for marketers to engage with

customers in more ways, and more productively, than ever before. To make the most of this opportunity, organizationsmust take a holistic approach to addressing the Splinternet starting with a cohesive strategy, and then addressing

subsequent technology, organizational, and measurement components. To put a comprehensive approach to harnessing

the benefits of fragmentation into effect, proactive organizations should take the following steps:

Experiment then operationalize.Take a structured, experiment-oriented approach to adopting new channels.Fund a formal test program or support low-cost, minimal resource, informal participation to evaluate new channels

and determine whether to proceed with a full-scale rollout and allocate significant budget and resources. This

approach permits organizations to explore channels while limiting risk.

Dont go it alone.Based on an inventory of your current capabilities, prioritize initiatives to fill in gaps based onyour short- and long term goals and determine if additional skills or bandwidth from third parties is needed.

Leverage agencies, consultancies, and vendor professional services to complement internal core competencies

where needed. When considering external support, always ensure that potential partners have a perspective on

multichannel marketing that is consistent with that of your organization.

Prioritize measurement.To avoid uncertain ROI and to develop performance benchmarks, no activity should beexecuted without a measurement plan in place. In addition to channel specific metrics, utilize business-oriented

KPIs across all channels to ensure that tactics are delivering suitable performance within the context of the entire

marketing plan and support the firms strategic goals.

Make analytics actionable.To take full advantage of the data generated by interacting with customers acrosschannels and devices, take analysis beyond static reporting and translate insights into actionable strategies.

Feeding the output of marketing analytics back into content and execution strategy allows firms to proactively

drive the customer experience with tactics based on user behavior and preferences. Leverage data-driven

techniques such as online targeting, triggering, and segmentation to optimize marketing activities.

Democratize data insights. Beyond the expansion and fragmentation of channels, the Splinternet also reducesdependence on discrete channels in favor of multichannel marketing. To excel in this environment, marketers needvisibility to the entire engagement funnel. When developing the measurement strategy, consider how analysis will

be distributed to marketing and business stakeholders beyond channel owners and analysts to ensure that they

have a comprehensive view of customers and prospects.

Get ready for mobile now. Social is very popular with consumers and marketers today, but the mobile revolutionis under way. Begin evaluating mobile channels and establishing benchmarks to ensure that your organization is

ready to expand into mobile once it hits the tipping point with your target customers.

Market your presence in emerging channels.The social and mobile ecosystems may be emerging but they arerapidly getting crowded. Simply creating a presence in these channels is no longer enough to ensure adoption.

Firms need to market their emerging channel presence to create awareness. Promoting participation in digital

channels via the website is an obvious tactic but also consider referring to social and mobile capabilities in print,

additional interactive media, and via customer-facing staff. Successful firms must also undertake specific

promotional campaigns to notify customers and prospects about online channels and emerging media.


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Appendix A: Methodology

In this study, Forrester conducted interviews with five marketing decision-makers along with an online survey of 210

North American and European marketers to evaluate the industry pain points, trends of the Splinternet, the future of

web analytics, and recommend strategies for optimizing marketing within this rapidly evolving environment. Survey

participants included decision-makers in marketing and management-level practitioner and managers and above.

Questions provided to the participants asked about the benefits, trends, and opportunities that face marketers today

around the fragmentation of the internet and best practices on what marketers are doing today to measure and analyze

their consumers and brands. The study was completed in July 2011.

Appendix B: Demographics/Data

Figure B1Revenue And Company Size



28%

21%

20%

18%

14%

$10 billionor more

$2 billion to$4.9 billion

Less than

$1 billion

$1 billion to$1.9 billion

$5 billion to$ 9.9 bill ion

"What is the total annual revenueof your company?

"Using your best estimate, how many employeeswork for your company worldwide?

36%

36%

14%

10%

3%

1,000 to 4,999employees

20,000 employees ormore



Less than 1,000employees


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Figure B2

Region



Figure B3

Job Level And Decision-Marking



"Where is the primary market you are targeting with your marketing efforts?

United States,50%

United Kingdom,25%

France, 5%

Germany, 20%

"Which of the following best describesyour job level at your firm?

51%

34%

8%

7%

Manager

Director

C- level or senior-mostexecutive

Vice president, seniorvice president, or

executive vicepresident

"Which of the following most closely describes your role inyour organizations interactive and multichannel

marketing? "

41%

24%

18%

18%

Im directly involved in myorganizations interactive and

mul tichannel marketing strategy

Im the key decision-maker inmy organizations interactiveand mul tichannel marketing

strategy

I manage a team that is directlyinvolved in my organizationsinteractive and multichannel

marketing strategy

Im indirectly, but signi ficantly

involved in decisions around myorganizations interactive and

multichannel marketing strategy

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