How prepared are Brand, Agency and Media organisations to meet digital marketing challenges? What are the differences between Brand, Agency and Media

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1 How prepared are Brand, Agency and Media organisations to meet digital marketing challenges? What are the differences between Brand, Agency and Media organisations in terms of digital marketing preparedness? How do Brand, Agency and Media organisations stack up in terms of Online Advertising, Social Media, Content Marketing and Data & Analytics expertise?

2 Executive Summary: Despite a growing shift of resources and budget to the development of digital marketing strategy, platforms and channels, the actual skill levels to effectively manage and execute digital marketing programs are absent outside of digital teams. Consequently, investments in this area are failing to return optimum ROI. Traditional reliance on the part of brand marketers on external parties to bridge this gap isn t proving effective because these external stakeholders are just as unprepared as the brands. There is a positive lift in skills relating to Owned Media, but this growth in skills is still overshadowed by a large majority who are not proficient in this area. Finally, there are large gaps in both the pioneer discipline of Online Advertising (indicating that this discipline is constantly re-inventing itself) and in the relative newcomer Data & Analytics, which requires an entirely new skill set based on data manipulation and analysis. Four major insights were uncovered by the 2014 Digital IQ Index 1 DIGITAL KNOWLEDGE STILL RESIDES IN SPECIALIST TEAMS There is a significant gap of knowledge between general sales & marketing teams and digital specialists. Individuals who scored well were generally from digital teams, and that knowledge wasn t distributed outside of those teams. Digital knowledge still resides in a very small percentage of media, brand and agency staff, at the same time that digital is becoming a central focus of marketing. As digital becomes more complex, there is a danger that the gap between the digital have s and havenot s will accelerate. 2 THE SKILLS PARITY OF BRAND, AGENCY AND MEDIA There is virtually no daylight between brands, agencies and media in terms of skill levels. All three sectors are effectively unprepared to manage and execute digital marketing campaigns. If agencies are unable to provide more value in this area, brands will have no option but to develop internal expertise quickly to remain competitive and will force a re-examination of the brand-agency-media relationship. 3 GROWING STRENGTH IN OWNED MEDIA CATEGORIES Significant portions of both brand and agency teams were found to have proficiency in both Social Media and Content Marketing (Media respondents were not assessed on either of these disciplines). This may represent an intersection of classic below-the-line marketing responsibilities, a generational familiarity with online content and community, and a drive to reduce costs. One concern is that this expertise tended to exhibit itself in a core part of the team and not as a general skill set (Specialists versus Generalists). 4 OLDER AND EMERGENT SECTORS REQUIRE ADDITIONAL FOCUS Despite arguably being the first widespread digital marketing skill set, proficiency in Online Advertising remains, almost twenty years after the first banner ad appeared, to be woefully low. This lack of proficiency extends across all three sectors, including Media, whose business model is most tightly associated with it. One reason for this lack of knowledge might be the continual reinvention of this discipline, with constant evolutions involving developments like programmatic buying and online video requiring skills updating. Not surprisingly, both brands and agencies are also failing to cover the skills gap in the newest digital discipline of Data & Analytics. 1 DIGITAL IQ INDEX 2014

3 Objective: Provide stakeholders in the Australian marketing community with insights into the current levels of digital marketing capabilities among working sales and marketing professionals. Digital Chameleon launched the Digital IQ Index in November The first Index focused on the results of 350 participants to a Learning Needs Assessment, in which respondents were queried about their own levels of confidence around a number of standard digital skills areas, ranging from display (online) advertising to social media. In addition they were surveyed as to their attitudes towards digital trends and learning modalities. This assessment is taken by all participants in Digital Chameleon programs. The 2012 Index revealed a definitive digital skills gap that existed among brand marketing, media and agency teams. The results of that report may be accessed at: com.au/white-papers.html. The 2014 Index builds on the initial findings and provides deeper perspective on the digital skills levels at the sector level (ie. brand marketer, media, agency). Methodology: The Digital IQ Index 2014 focuses on actual skills assessment results. While the first Index used a standard self-reporting survey methodology, the 2014 Index relies on actual results from a standard skills assessment tool. DID YOU KNOW: 66% Of all marketers state companies won t succeed unless they have a digital marketing approach Less than half of digital marketers feel in digital marketing OF DIGITAL MARKETERS FEEL HIGHLY PROFICIENT 37% OF MARKETING 48% Generalists are even less confident GENERALISTS FEEL HIGHLY PROFICIENT Source: Digital Distress: What Keeps Marketers Up at Night? Adobe The Digital Skills Assessment (DSA) is made up of 32 questions and is accessed online by learners in Digital Chameleon programs. These questions capture familiarity with common, processes and definitions used in basic digital marketing planning and execution. Four major digital marketing disciplines were reflected in the DSA, including Online Advertising, Social Media, Content Marketing and Data & Analytics. Eight questions related to each of these four disciplines were asked of the respondents. There were a total of 625 respondents, who took the DSA during FY 2013 and There were 361 media respondents, 131 brand respondents and 133 agency respondents. The Brands group represented both products and services. The Agency group included creative, media buying and full-service firms. The Media group included magazine and newspaper teams. Team sizes ranged from people. Please Note: Media respondents were only assessed on Online Advertising (this being the only immediately relevant discipline for this sector), while agency and brand marketer respondents were assessed across all four of the digital skill sets (Online Advertising, Social Media, Content Marketing, Data & Analytics). WHY ARE WE SHARING THIS? Digital Chameleon is a learning & development business that engages with companies to help mainstream digital marketing literacy across entire teams. Digital Chameleon uses a standard assessment as part of its methodology to measure digital literacy among these teams. The data in the Digital IQ Index comes from these assessments. Our intent was not to produce research, but to share what we ve learned through our normal course of business training media and marketing professionals in Australia. 2 DIGITAL IQ INDEX 2014

4 Summary In summary, the 2014 Digital IQ Index confirms that the digital skills gap is more than self-perceived. It empirically exists, as demonstrated by the results of the Digital Skills Assessment used to capture the data. Digital literacy amongst brands, agencies and media is as low (if not lower) than the self-reported concerns highlighted in the 2012 Digital IQ Index. For organisations that are prepared to fill their digital skills gaps, this will be a period of opportunity and growth. For those that are not, the next few years will become much more competitive and challenging and, potentially, brand-ending. DID YOU KNOW: According to the Accenture CMO Insights Survey, only 7% of CMOs believe their performance in digital is leading edge and 64% of CMOs believe their external partners are weak on execution and delivery. Digital IQ Index Timeline 2012 Surveyed sales and marketing professionals on how digitally literate they considered themselves to be around core digital disciplines (online advertising, social media, content marketing and data & analytics) 2014 Determined how knowledgeable brand, agency and media professionals actually were around core digital disciplines (online advertising, social media, content marketing and data & analytics) through a formal assessment 2015 Will track actual increases in digital proficiency around core digital disciplines by sales and marketing professionals via a pre- and post- assessment methodology About Digital Chameleon Digital Chameleon helps clients mainstream digital knowledge and capabilities across their teams. Digital Chameleon works with companies worldwide to integrate digital into the DNA of their businesses via its Seven Stages of Digital Transformation process. This scalable, tailored, metrics-driven approach to digital learning closes the talent gap and provides clients with a demonstrable return on investment. Digital Chameleon s learning solutions have been endorsed by the Media Federation of Australia and the Digital + Direct Marketing Association Asia. Most companies rely on digital agencies for things like optimizing search marketing. In such cases, they may be ceding digital capital, since they never develop a full understanding of consumer segments or what inspires a customer who searches for their products. Seeing such capability building as an investment may change the logic of using third parties. Source: Measuring the full impact of digital capital, McKinsey & Company To learn more about Digital Chameleon, please visit us at: DIGITAL IQ INDEX 2014

5 Results by sector: Respondents were grouped into one of four quartiles: Uninformed (unable to engage), Partially Informed (barely able to engage), Proficient (proficiency in basic ), and Highly Proficient ( ). Respondents residing in the first two quartiles (Uninformed, Partially Informed) were deemed as lacking sufficient knowledge to engage in digital marketing decision-making around that discipline. Those in the second two quartiles (Proficient and Highly Proficient) were deemed as having the skills and knowledge to make effective decisions around that particular digital marketing discipline. BRANDS: INCLUDES PRODUCTS AND SERVICES AGENCIES: INCLUDES MULTINATIONAL, REGIONAL, CREATIVE, AND MEDIA MEDIA: INCLUDES MAGAZINES AND NEWSPAPERS BRANDS 131 participants 53% SOCIAL MEDIA 41% 6% 11% 48% 34% 7% CONTENT MARKETING 5% 2 47% 28% topic DATA & ANALYTICS 48% 41% 11% topic NUMBERS ROUNDED UP TO NEAREST INTEGER 4 DIGITAL IQ INDEX 2014

6 AGENCIES 133 participants 47% SOCIAL MEDIA 15% CONTENT MARKETING 42% 46% 38% topic 2% 5% 5% 11% 56% 25% topic 8% DATA & ANALYTICS 59% 37% 4% MEDIA 361 participants 29% effectively around the topic 6 11% NUMBERS ROUNDED UP TO NEAREST INTEGER 5 DIGITAL IQ INDEX 2014

7 COMBINED Brands and Agencies: 264 participants 5 SOCIAL MEDIA 44% 6% 13% 45% 36% topic 6% CONTENT MARKETING 7% 16% 51% 26% topic DATA & ANALYTICS 54% 39% 7% COMBINED Brands, Agencies and Media: 625 participants 38% effectively around the topic 53% 9% NUMBERS ROUNDED UP TO NEAREST INTEGER 6 DIGITAL IQ INDEX 2014

8 Results by discipline: LEGEND 1st quartile UNABLE TO ENGAGE EFFECTIVELY AROUND THE TOPIC 2nd quartile BARELY ABLE TO ENGAGE EFFECTIVELY AROUND THE TOPIC THRESHOLD OF DIGITAL COMPETENCY BRANDS 131 participants 94% AGENCIES 133 participants 93% MEDIA 361 participants 89% 7 DIGITAL IQ INDEX rd quartile 4th quartile PROFICIENT IN BASIC TOPIC CONCEPTS HIGHLY PROFICIENT AROUND TOPIC

9 SOCIAL MEDIA BRANDS 131 participants 59% AGENCIES 133 participants 57% CONTENT MARKETING BRANDS 131 participants 67% AGENCIES 133 participants 67% NUMBERS ROUNDED UP TO NEAREST INTEGER 8 DIGITAL IQ INDEX 2014

10 DATA AND ANALYTICS BRANDS 131 participants 89% AGENCIES 133 participants 96% NUMBERS ROUNDED UP TO NEAREST INTEGER 9 DIGITAL IQ INDEX 2014

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