Two years ago, Shravan Goli, CEO of the online educational company Dictionary.com, returned from the annual TechCrunch entrepreneurs’ summer conference brimming with ideas about the marketing potential of a new technology called application program interface, or API. “There are all these people [who] are building word games online, and they can use API with our content,” he told Lisa Sullivan Cross, vice president of marketing and development at Dictionary.com, which is a $1 billion subsidiary of the Internet conglomerate IAC.
Cross picked up the ball from there, making “a list of about 30 top-tier partners that we wanted to go after,” she recalls. Over the next several weeks, she and Goli discussed the potential traffic, customers and cost. For instance, after people play the word game Boggle online, Cross said, they would see a list of all the words they used, along with a pop-up ad announcing, “This definition is powered by Dictionary.com.”
Now, while Cross’s staff of four continued to seek e-marketing outlets, she and Goli discussed possible API product extensions and other new strategies at the firm’s monthly executive meeting. With a career spanning nearly 20 years at Microsoft, Yahoo and now Dictionary.com, Goli concedes that “I’m not the typical CEO.” Most of his non-Silicon Valley peers function perfectly well without ever hearing terms like API. They set broad policy and leave it to the marketing team to carry out the details.
But the digital world is so transformative, Goli and others say, that all chief executives need to understand its marketing implications in some detail.
Everyone Is Digital Now
After all, old-line companies are using digital tools as much as anyone. Ford Motor has eight customer service agents dedicated to monitoring comments on Twitter, Facebook and other electronic forums. In 2010, when McDonald’s learned that there were Facebook pages and other Net venues devoted to its McRib sandwich, it began connecting these bloggers. In February, Procter & Gamble announced that it was shifting much of its ad budget away from television and other, traditional outlets and toward social media. “In the digital space, with things like Facebook and Google and others, we find that return on investment of the advertising, when properly designed, when the big idea is there, can be much more efficient,” CEO Robert A. McDonald told Wall Street analysts.
“At the end of the day, the CEO has to learn about this stuff, has to understand why Ford has been so strong in social media, so he or she can hold the marketing chief accountable,” says Scott Galloway, a clinical professor of marketing at New York University’s Stern School of Business.
“Digital marketing” is a term almost as vast as the Internet itself, ranging from the “old-fashioned” types that began in the 1990s—such as websites, pop-up ads, e-mail blasts and search engine optimization—to the newest social media and mobile apps, including Twitter, Facebook, Pinterest and company-sponsored blogs. Most practitioners say usage really expanded about five years ago.
While many tech firms, such as Dictionary.com do all of their marketing electronically, most companies still use a mix of digital and traditional and, thus, they need to figure out how the two strategies can work together. “It really is about integrated marketing these days,” says Eric Berridge, one of two co-presidents (who function as the CEOs) of New York–based management consulting firm Bluewolf, which does about $100 million in annual business. The firm’s marketing vice president, Corinne Sklar, coordinates a staff of six equally divided between those handling traditional events and conferences and those doing digital. The Almond Board of California—a trade association for the nation’s 6,000 growers, with a $51 million budget—uses traditional advertising to direct customers to its website, says CEO Richard Waycott.
Leave It to the CMO
The Almond Board is in the process of hiring a mid-level social media manager, who will report to the vice president of global market development. More often, however, there is no special digital manager, and the marketing chief simply adds this strategy to his or her repertoire.
Waycott is a decidedly hands-off CEO. After he and his market development vice president agreed last summer that the Almond Board should have a Facebook page, Waycott let the marketer decide what to put on the page. “I try not to butt in where I’m not going to add a lot of value,” he says.
Even at a much techier place—the $767 million online travel agency Orbitz, whose founding CEO, Jeffrey G. Katz, has graduate degrees from both Stanford University and the Massachusetts Institute of Technology—the CEO gave the marketing chief plenty of leeway. “He set clear goals for the company, but he trusted the marketing organization and me to execute against that,” says Michael Sands, who was the chief marketing officer and then chief operating officer from 2000 to 2006, before becoming CEO of BrightTag, a Web privacy firm. Indeed, plenty of management gurus warn CEOs against micromanagement in general.
When Things Go Viral
Actually, neither Waycott nor Katz has stayed totally aloof from this new marketing technology. Katz and Sands spent a day at Google in the early 2000s, meeting with then-CEO Eric Schmidt and engineers to understand how the search process worked. Waycott says his PR and ad agencies, his marketing staff, and other CEOs have been educating him about the digital world.
For example, the digital marketing officer could give the CEO a tutorial, suggests Mikhail Gershovitz, director of the Bernard L. Schwartz Communication Institute at New York City’s Baruch College. CEOs can also attend conferences, ask savvier CEOs, and—perhaps ironically—peruse online blogs, adds Galloway of NYU. In addition, he says, “Make sure the people they are hiring or already have on staff are exposed to the type of material they need to be up to speed, so they’re not [overly] reliant on vendors.”
For self-protection, if nothing else, “the CEO should have some understanding about what the Internet allows users to do,” Gershovitz adds. “It can keep them from getting [into] trouble, if they have an understanding of how a bad image can go viral.” L’Oreal’s executives certainly learned that lesson the hard way in 2006, after the French company bought the Body Shop chain. When rumors spread across the Web that the new owners would eliminate the Body Shop’s famous practice of not testing products on animals, animal-rights groups called for a boycott, and it took months to repair the Body Shop’s image.
“Every CEO I speak to—every day in his or her life—encounters examples of digital marketing in their smartphone or elsewhere,” says Jonathan Copulsky, a principal at Deloitte Consulting who specializes in branding and marketing. “They’re saying, ‘I need to catch up.’”
- Even non-tech CEOs should know the basics of digital media.
- If you don’t want to micromanage, make sure your staff is digital-savvy.
- Digital and traditional marketing must be integrated.
- CEOs can use real-time e-feedback to tweak marketing strategies.
Should the CEO Blog?
Michael Sands, CEO of BrightTag, a startup focusing on Web privacy, doesn’t contribute to his company’s blog. Partly, it’s due to lack of time, he says, but partly he’d rather have the posts come from his 15 employees. “You want to make sure you’re building the company’s brand and not making it about you as the CEO,” he says.
By contrast, Shravan Goli, CEO of another tech company, Dictionary.com, tweets about a dozen times a week, on everything from an interesting article about online education to the San Francisco Forty-Niners. He also re-tweets customer comments. “Twitter definitely gives you a way to disseminate information that is credible as well as useful, “he says. He thinks it’s fine to “create a personality profile as well as a company profile.”
Such online activity can be a good idea if “the CEO believes that he or she, as a representation of the company, will raise the profile of the brand,” says Caren M. Fleit, the senior partner overseeing marketing at executive recruiter Korn/Ferry International. Of course, blogging can also help CEOs raise their own profiles, in order to lobby for a board appointment or even a new job.
In a recent survey of nearly 3,500 corporate managers, MIT Sloan Management Review and Deloitte found that 11 percent contribute daily to “social software” for business purposes, 19 percent contribute at least weekly, and 24 percent contribute “occasionally.”
If executives have no time or desire for such e-fiddling, there is no problem as long as they approve the basic message. “They don’t have to be the one sitting at the computer writing all the tweets,” Fleit says.
Digital Marketing’s Real-Time Advantage
Because digital marketing offers real-time data and two-way communication with customers, CEOs can massage this medium in ways they never could with a magazine ad.
For example, by using social media, altering an ad campaign is the work of a few minutes. “If we run a blog that our customers aren’t quite understanding, we can tweak it,” says Eric Berridge, co-president of the consulting firm Bluewolf. By contrast, “if we run an ad in The Wall Street Journal and it’s not the right message, it stays there forever.”
That constant attention undoubtedly brings the CEO and marketing chief together much more than in the past; Berridge says he and Corinne Sklar, his vice president of marketing, will talk, e-mail, or even meet in person “multiple” times daily.
At the big online travel agency Orbiz, CEO Jeffrey Katz “was very aware of the performance of each of our individual marketing channels,” recalls Michael Sands, then the chief marketing officer. Throughout the day, Katz would ask Sands about different results: “Was it coming from Google, coming from display ads, coming from pop-ups?” Scott Galloway, a marketing professor at New York University’s Stern School of Business, says CEOs need to know what metrics to look for, including statistics on the number of customers who engage on social media platforms.
Caren M. Fleit of executive recruiter Korn/Ferry International warns of information overload from social media. “You know what customers think about your product, your brand, your service, your competitors,” she says. “It’s tempting to react immediately. You have to sort through a lot of crud.”