13/02/2015

Rethinking the business case for investing in digital

BY Neil Gilbert

Last year Gather conducted research which showed that two-thirds of corporates expect to increase their use of digital by 2016. That rings true: digital is now so pervasive companies need to invest just to keep up.

How to think about this investment? Is it a question of spending to spare the blushes or is there a way to frame the business case to find opportunities for real returns?

Most business cases for significant spend on this channel will start with the capital cost, the one-off hit of a new digital platform or the redesign of an existing one. Then the running costs will be factored in. The servers, the software licenses, the IT guy getting a text at 2am to say the memory stack’s unexpectedly full.

This investment might be justified on the grounds of poor user experience (probably because the site’s not responsive) or because the site’s looking tired (probably because the competition’s had a refresh). That’s fine and best case, this cost will be measured against the return that new leads, new sales or enhanced brand reach will give.

What is often missed from the business case is the opportunity cost. Too many companies launch a website or digital presence then sit back, glad that the hard work is over. To paraphrase Churchill, it’s really just the end of the beginning.

The opportunity is to listen to audiences and shape the website or social channel, optimising their experience. This should determine how companies approach their business case.

The truth is out there

Robert McDonald, erstwhile boss of P&G, won’t go down in history as its most successful CEO. His tenure saw sales and profits falling below expectations but he turned the spotlight on data in fascinating ways.

In an excellent interview he talked about how as brand manager for Tide in the 80s he would spend his commute listening to taped conversations from customers that rang the freephone number on the side of the boxes. As data it wasn’t much to go on – but it was the best they had. Compare it to just a few of the innovations we have now: the uptake in smart phones, the genius of Google and the advent of near-field technology. The pieces are there for a near-perfect data picture. The challenge is knowing how to put them together.

At P&G McDonald invested heavily in big data, giving his staff access to real-time information through a series of tools on which they could base decision making. Insight generated allowed improvements in everything from products to the supply chain. Achievements included reducing ‘dead head’ logistics (where a lorry is only full for part of its journey), cutting costs and environmental impact.

Big data’s little brother

The opportunity is for internal and external comms managers to consider this approach to analytics when tackling their digital channels.

P&G committed to data. We know that not every company will, so our advice is don’t wait. Sophocles apparently said that you can kill a man but you can’t kill his idea. Of course ancient Greece had no multinationals. We know better.

P&G empower managers to use analytics to embrace new ideas and shift resources to those who make data-driven decisions. But the truth is that anyone can take the time to understand web and social analytics and use these to build the case for a digital and social presence that is of genuine value to your audiences.

 Mo’ money more problems

Our research showed that only one third of corporates felt they were prepared for the increase in digital and social media spend.

Here are three things they could do to feel more prepared when building a business case:

– Count engagement, not clicks. Start with what you’ve got. Ask who is engaging on digital platforms. Where did they come from? What do they do when they’re there? The tools that tell you this aren’t that expensive. The investment comes from interpreting and acting on the data.

– Embrace audiences into every part of the digital process. Prototyping and iterative development gets their voice and behaviour in early, avoiding the need for costly changes further down the line.

– Get into your audiences heads. Knowing how they behave is fundamental to a great user experience. Knowing why they do what they do it is game changing. It’s what creates great brands and communications which nail their expression. And the intangible value of a brilliant brand expression creates connections worth measuring.