The Bottom Line
Digital brand experiences create customers. As we’ve found in our study, the overwhelming majority of consumers who actively engage with a brand digitally—whether by creating content for a contest or by “friending” a brand on Facebook—show a propensity to both purchase products and recommend those products or that brand to others.
But what does brand engagement mean for the future of marketing and sales?
Quite a lot, actually, particularly given the projected growth rate of interactive advertising in the coming years. GroupM predicts that, in 2010, digital will represent 17% of the U.S. advertising marketplace, making it the third largest medium in the United States, behind television and magazines. The outlook is even rosier over the next five years, according to Forrester’s April 2009 Interactive Advertising Models, which predict digital to hit $55 billion by 2014.
Of that increasingly large digital pie, much will be allocated toward “measured” categories like search, display, email, and social media marketing. But “unmeasured” spending on “brand engagement” should soar, given the outsized influence it will have over customer creation in the coming years.
Measuring Brand Engagement
No wonder, then, that so many are trying to gauge the financial impact of brand engagement. Millward Brown, in its annual BrandZ Digital Consumer Report, found that “digital consumers” have a 15% stronger relationship with a typical brand across all categories and countries. The Altimeter Group, led by former Forrester analysts Charlene Li and Jeremiah Owyang, produced a study called the ENGAGEMENTdb 2009 Report that attempted to correlate brand engagement via social media activity to a company’s financial performance. The group cited Starbucks, Dell, and eBay as the most engaged brands based on the breadth of social tools that those brands use to engage users, as well as the depth of their interactions (e.g., responding to blog comments).
In our Razorfish Digital Brand Experience Study, we took a different tack. Simply, we wanted to know if there were any direct correlation between consumers’ online interaction with a brand and their likelihood to purchase a given product or service.
The answer was a resounding “yes.” According to our findings, 65% of consumers report that a digital brand experience has changed their opinion (either positively or negatively) about a brand or the products and services a brand offers.
That’s a significant figure that bears pondering for a moment: A clear majority of consumers’ affinity for a brand is swayed, either positively or negatively, by their digital experience with that brand. We’ve always believed, largely through anecdotal research, that consumers make purchasing decisions—in part—because of the quality of a brand’s web site. This is obvious in industries like banking, e-commerce, and search, where the quality of service and the ability to complete transactions are paramount. But this is less obvious in other industries, such as consumer packaged goods and fast food. However, it’s now clear that consumers are expecting equivalent superior experiences from all of their digital interactions with brands.
Digital Drives Sales
Furthermore, these digital brand experiences directly correlate to purchasing behavior for these consumers. According to our study, 97%—a near-unanimous majority—report that a digital brand experience has influenced whether or not they then went on to purchase a product or service from a brand. Digital experiences not only build a brand, they can also make or break it. For those brand marketers still neglecting (or underestimating) digital, it’s as if they’ve shown up to a cocktail party in sweatpants. Invariably, consumers will choose to converse with a savvier—and hopefully more stylish—partner.
Based on these findings, we believe that marketers will have to think much more broadly about how they are connecting with consumers across the digital channel. From search, to web site, to display ad, to microsite, to mobile application, to Facebook page, every interaction has the power to shift a consumer’s affinity for a brand. Certain brands already live this. For example, CNN has crafted an integrated approach to connecting with consumers, whether they watch its cable programming, receive headline updates via Twitter, or watch video segments on their iPhones.
As “digital primacy” has risen, so has the way consumers learn about and purchase a brand’s products and services. Because of the interactive nature of the medium, one brand experience can lead a consumer from “awareness” through “purchase” and “recommendation” almost instantly. According to our study, 64% of consumers have made a first purchase from a brand because of a digital experience such as a web site, microsite, mobile coupon, or email. No other medium has so impacted—or altered—the traditional marketing funnel this way.
Perhaps one day, when interactive TV becomes a reality, consumers may make a purchase via remote control after watching a 30-second spot from a comfy seat on the couch. But it’s doubtful that in this scenario consumers would also instantly tweet about it, review it on Yelp, or share it with a friend on Facebook. Only digital seems to have such immediate and expansive impact.
The Net Effect
It never hurts to make a good impression, but for brands to remain relevant in this new digital era, it’s much better to find a way to engage consumers than to talk at them. Based on our findings, we are even more convinced that digital brand experiences matter. Engagement creates customers—not just through social media, but across the entire digital channel. And, more importantly, it drives returns to the bottom line. As a result, marketers will need to rethink not only how they reach potential consumers but also what type of experiences they are creating to engage them. Now “clicks” and “impressions” mean far less than conversations and brand behaviors. In our opinion, it’s about time.