Insights on Marketing & Technology

Harvard professor: "Create an ecosystem of content for success in Digital Marketing"

Today’s digital world has forever changed the game for marketers across the globe. Not everyone seems to have learned the new rules yet. We spoke with Harvard Business School Assistant Professor and researcher, Thales S. Teixeria (Ph.D. in marketing), about the pitfalls and potential of Digital Marketing.

  • By: Jens Christian Madsen interviews
  • Published: 14-03-2014

FROM EYE TRACKING TO DIGITAL MARKETING

Thales S. Teixeria originates from Brazil. He came to the United States in 2004 to pursue a Ph.D. in Marketing at the University of 
Michigan, where he studied for 5 years. Since 2009, he has been an Assistant Professor and researcher at the Marketing Department of Harvard Business School. 

“My research focused on monitoring peoples’ eye movements as they were exposed to visual advertising content on 
computer screens by using infrared technology called eye tracking. I wanted to understand what content in video and online advertisements captured consumers’ attention and what made people skip ads and leave webpages.” 

Thales’ major finding was that the bigger the brand image, the longer the logo was present, and the more prominent the product was presented in the ad, the more likely people were to skip the ad. But as it is rather odd to have ads without brands, Thales’ explored second-best approaches. 

“I found that one particular approach was effective for virtually all brands across all categories: show the brand multiple times during the ad so that people get used to it, but only show it very briefly. By placing the brand in different locations multiple times for short moments, people can see it without getting annoyed by it. I refer to this as ‘brand pulsing’ and it minimizes ad avoidance.” 

At Harvard Business School, Thales has spent the past few years researching both eye tracking and face tracking by filming  peoples’ faces to track emotional reactions (for instance smiles, grins, and disgust). The purpose it to uncover how some emotionality can be added to the way consumers engage with brands. 

“Today, many companies have picked up eye and face tracking and it has improved their online video advertising. Companies like Unilever and P&G are good examples. In many ways, face tracking is a better approach to understanding an audience’s perception of campaigns than questionnaires because it monitors spontaneous reactions and is unobtrusive.”

FROM EARLY ONLINE DISPLAY ADS TO MOBILE APPS

According to Thales, Digital Advertising or Digital Marketing, as he terms it (“... because Digital Advertising is only one 
component of Digital Marketing...”) is basically using the web to do three essential things: acquire customers, retain customers 
and encourage them to become loyal customers. 

First, a quick stroll down memory lane: 

“The big shift came when the Internet essentially became available for commercial usage in the US and the first companies started publishing web pages. That occurred in the beginning of the 90s. As people needed to know about these pages before accessing them, the first online advertising was in the form of display ads. Following this, people started using different tools. For example, when many people started acquiring email addresses, email marketing became big!”

But at a certain point there were so many web pages that search engines needed to be introduced and these became the access point for the majority of the consumers on the web. Once that happened, SEO became bigger and text ads was introduced. Now, search engines are one of the biggest sources for advertising.

The next big game-changer was the introduction of social media - particularly the impact of Facebook, which for many people has replaced search engines as their access point to the web. 

“A problem with social media in a business context is that people don’t go to social media to interact with companies. Companies don’t naturally belong on social media networks. This issue is reflected in ad placement prices for social media which are very, very low…”


Currently, we are in the era of smart phones. This big transition happened when people went from just using their phone to make 
telephone calls to also accessing the internet with them. Now advertising budgets are slowly incorporating more mobile because that’s becoming the most common access point to the web! 

“The challenge is that the screen is so small that it’s difficult to divide the screen into content and advertising sections. 
Mobile ads are even cheaper than social media ads for the simple reason that most people don’t click on mobile ad and won’t allow these ads to take over the entire screen on their phone.” 

And that leads us to apps. Apps have become a different way of showing advertise content on the mobile phone. Companies 
create the apps and get direct access to the consumers.

UNDERSTANDING CUSTOMERS - CREATING RELEVANT CONTENT, PRODUCTS AND SERVICES

To be able to acquire, retain and keep customers loyal you must do two things: 

1. Understand your customers 
2. Develop content, products and services that customers are interested in and will consequently purchase 

“In terms of understanding consumers, that’s the unexplored part of social media. In my experience, most companies only use social media for traditional advertising and offers, which is hard to translate into sales. Furthermore, many companies put too much emphasis on social media and use it too much or too exclusively. Instead, social media should just be one tool in their 
collective communication approach.  In Digital Marketing, when you focus too much on one tool you fail to make it actually pay off.” 

What many marketers miss out on is understanding that certain aspects of digital and online tools are inherently different than traditional marketing tools. More specifically, instead of using Facebook as a mere advertising platform for banners and text ads, it should be used to provide the consumers with relevant content that makes the consumers come back again and again to their Facebook page. 

“Companies that provide video content, which is very useful to the audience, are a good example.  L’oreal is one such company. They discovered that a lot of their customers either didn’t use their products correctly or were not up to date with new technologies like new types of makeup, masks, etc. So their research showed that consumers relied on videos from others users, tutorials, and so forth. Videos on YouTube, Facebook, etc. have a great impact on consumers and easily transfers into sales. Through this approach, you have an effective means for building an audience and subsequently building a customer base. The company becomes a curator of both self-produced videos and consumer-to-consumer videos. The company ensures the quality and relevance of the videos.”

PROVIDE AN EXPERIENCE THROUGH RELEVANT CONTENT

People prefer to buy products and brands that provide a good experience. What companies have realized is that if they surround their product with ecosystem of content it is easier to let people engage with it through this package of experiences. 

“If a customer buys a set of expensive headphones, the company should attempt to create a relationship with the customer that lasts until the next time they buy headphones 5-10 years from now. The customer’s relationship with this company will fade over time unless the company is able to provide a constant stream of content that engages the customer. This content could be music. The company doesn’t need to create the music themselves, but they should supply a channel that makes the customer go to them. Content is getting more and more important: people are not consuming more products, they are consuming more and more content over time!” 

The big question is determining upcoming trends within Digital Marketing and the factors that drive the trends. One thing's for sure, it’s not primarily about technology. Technology only enables people to change the way they do things in a broader sense: the way they work, eat, talk with others, and sleep. It’s only when you see a critical mass of consumers changing behaviour in response to a specific technology that it really matters for a brand to jump in. 

“If the company jumps in on new technology just because of the technology, they miss the key component – consumer 
adoption. It’s all about understanding the consumer. It’s much more important than technology in itself. Think of all the new types of technology that consumers didn’t adopt. The Segway for instance. It represents the perfect means of urban transportation. It’s a small device you can use to move quickly, economically and with little impact on the environment. But despite all of this, consumers ended up not adopting it.”

EFFICIENCY AND COSTS

Once the consumers have adopted a technology, there are two things that companies should address: 

1. Understanding how they can do their marketing activities more effectively 
2. Costs 

“Nothing changes when new technology arrives. Nothing changes in how businesses should acquire, retain and pursue customer loyalty. It’s about doing it more effectively. For instance, with social media, there is still room for making things more effective in terms of targeting and research. With mobile, it’s still not clear which approach is most commercially successful as people gain more and more control in avoiding advertising on their mobile device. 

In respect to costs, that is still a huge unexplored part of digital marketing. Companies can do more at a lower expense: viral marketing and social media marketing deliver lower CPMs and lower costs to get attention compared to TV ads. Within all these areas, there’s huge opportunity to reduce costs – especially for smaller companies.” 

With lower costs, companies will try to communicate more. The digitalization of Direct Marketing is the big proof of this. As the 
costs of print and mailing were reduced (or virtually removed), the amount of companies who used DM via email skyrocketed. Now, so many companies send so many unsolicited emails to so many consumers –  deals, promotions, advertising, etc. 

“They do this knowing that they are not being more effective. They do this only because the price has been so radically reduced. Now, they are bombarding people with direct mails. It’s getting critical. So you can conclude that these cost reductions are not always in the consumer’s favour.”

HIGH OR LOW INVOLVEMENT INDICATES CHOICE OF METHOD IN DIGITAL MARKETING

In the bigger scheme of things, there are so many industries that it’s impossible to learn about Digital Marketing by going deep into every market and analyzing their specific situation. It will take years. Consequently, we need to have a simplified scheme to understand where digital marketing has the greatest potential, lowest potential, where it’s costly, where it’s not, where it’s most effective and least effective. 

“The biggest categorization that explains both success in Digital Marketing and in tools companies should use is the level of involvement of customers within the product category. Involvement means how much effort, interest and attention people put into making a decision about a purchase within the category. High involvement purchases like houses and cars are obvious because they occur at such a low frequency and are relatively expensive products. However, there can also be cheap categories that are high involvement, such as makeup for women. Low involvement describes products where you don’t elaborate too much about the purchase: hand soap, household cleaning, and so forth… “ 

When there’s high involvement, people automatically search for information. Digital marketing can provide the consumer with informational content that brings people into the loop: video clips, etc. This approach, where people search and companies 
provide content to lure people in, is called inbound marketing. The process originates with the consumers’ desire for information that leads to search for companies. This contrasts the traditional marketing approach of outbound marketing, where companies blast advertising into the market. They have to advertise in order to get people to come to them because people won’t necessarily do so otherwise. Consequently this latter method works better for low involvement products. 

“Every marketer should ask him or herself these two questions: 1) Is my product high or low involvement?; 2) Which class of consumers are highly involved with my product? Regarding the latter, not all target groups that behave the same within the same market and product category. Insurance is a good example of this. Some consumers just buy a standard insurance product whereas others do intensive research before they decide on a solution.” 

On the concluding question of what the future of Digital Marketing looks like, Thales answers: 

“I’m not a futurologist, so I’d rather not go into that. But it’s my impression that companies are getting more and more confident with digital tools. They don’t feel they have to jump on to the newest thing and that seems like a healthy development.”

Thales Teixeira 
Thales Teixeira is an Assistant Professor in the Marketing Unit at Harvard Business School. There he teaches Digital Marketing Strategies to MBAs, PhDs and executives. His research domain comprises advertising and The Economics of Attention – i.e., how to capture and use consumer attention effectively to persuade. His recent work spans the domains of Super Bowl adverting, viral ads, online video ads, TV commercials, and cross-media synergies. His research has been published at Harvard Business Review, Forbes, NY Times, and he has presented his research at Facebook, Warner Bros., The Coca-Cola Company, Paramount Pictures, and Disney Studios.

He can be found at: http://www.people.hbs.edu/tteixeira/ 

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