Image_hero-fairytale-app

2015: A fairytale of risk in the digital age

By David Edelman

This is a year for digital marketers to be careful what they wish for.

Having recently seen the Disney movie Into the Woods (yes, I’m a sucker for good musicals), I can't stop thinking about two of the key messages from the show: “Be careful what you wish for,” and “Expect the unexpected.” So instead of writing about the giddy forecasts of relentless progress out there, I am going to take a different tack, because I see this as the year we recognize that “the woods” may be enticing, but they are also scary.

We all want to go faster, explore new breakthrough channels, get comfortable with failure, and all those inspiring exhortations. But the events of the past year should also encourage digital leaders to find a new balance between speed and risk management. I don't think anyone has mastered this balancing act yet.

The natural reaction to all this risk is to treat brands like Rapunzel and hide them away in a tower surrounded by protections. But that’s clearly not the right answer, as almost any brand would acknowledge. Brands, like children, will never grow unless they expose themselves and learn how to react to unexpected events of the world.

So, what can companies do? While there are many options, here are a few I’d recommend for companies to slay a few dragons of risk.

Not to get all “Chicken Little” and declare the sky is falling on our heads, but I think it would be useful to lay out some of the more worrying realities shaping the digital marketing world today:

  • Apps and online tools are essentially software services marketers are offering under their own brand name. In many cases, they represent a range of activities most brands have never done before, and increasingly brands are operationally dependent on them.
  • Digital and mobile tools are creating decision journeys for customers that, if unmanaged or done poorly, could dangerously undermine the brand’s promise to care about the customer (through weak or confusing content, uncontrolled access to micro sites and social media, slow e-commerce tools, etc.).
  • Brands are collecting and managing personal customer data, and trying to protect it from relentless security attacks or from careless misuse.
  • Brands?They are becoming much more transparent about their people and operations because of a widening range of social media channels creating ever higher expectations from customers, and opening up all kinds of challenges in deciding what (and how) to share.
  • Customers are increasingly shaping opinions about brands on social media, reviews, blogs, and ratings.
  • In contravention to the trend towards transparency, automated intermediaries are creating a more opaque process of buying digital media with unclear ROI. Similarly marketing spend is migrating to new models of content and mobile marketing that still have a very weak ability to track attribution—even as pressure to demonstrate ROI grows.
  • Companies are bombarding customers with messages, even after customers opt in through apps or location-based services, and customers are becoming annoyed with the endless stream of promotional intrusions, (many of which aren’t really relevant and are closer to spam than to customer communications.

Knowledge is power: Understand your online presence.
Software from companies such as Northpage can scan the entire online footprint of a brand and its competitors, test the quality of content and links, uncover unused online real estate, and compare all coding to evolving best practices. We've seen high payoff for companies that track their broader online brand presence and then manage an evolving punch list of clean-up activities. To keep one's pulse in social media, knowing what people are saying, tracking one's responses, and getting a feel for overall sentiment, there are a growing range of tools, such as compliance work-flow management from Hearsay, and social "war-room" support from Salesforce.com. If you don't have a management strategy for social media—covering your content supply chain, support for employees, customer care, and fast-response triage—you are testing the boundaries of brand disaster.

Take control: Manage the digital-media process.
From a digital-media-spend perspective, it is shocking how few companies have a tight handle on where and how they invest. That has to stop. While the emerging programmatic buying tools out there can give much more control to marketers if they choose to run them in-house, leaders have to also get directly engaged in setting policies for how they want to measure real CPM, including all the costs they should account for, as well as how they want to count engagement.

Do the right thing: Engage with customers carefully.
Just because you can communicate with customers doesn’t mean you should. Bombarded customers will soon cease to be customers at all without frequency caps or tight feedback on how people are reacting to messaging. Every customer contact is a scarce opportunity to engage someone. I suggest creating “Net Engagement Scores” for various channels, subtracting those who ignore you from those who go to different levels of responsiveness. Make that score as much of the management discussion as net sales if you want to build a longer-term asset.

Face the risk: Actively manage cybersecurity.
As recent experience indicates, the depth of cyberattack dangers could be beyond anyone's ability to foresee. While there should be more public policy support for businesses to share resources and learn about cybersafety, every brand needs to have an explicit cybersecurity manager empowered to run drills, use outside parties to test protection, and have a place at executive-team meetings on a regular basis.

Looking at this significant risk profile, it’s tempting to assign it all to some kind of chief digital risk officer role. But given the diversity of these risks, I think a better approach is to have different functional areas create a risk-management strategy alongside their annual plans (for social, paid media, customer experience, data management, and IT development) and integrate a rotating range of risk discussions into the senior management agenda. Along with “granting wishes”—to keep this fairytale analogy going—through budget or resource support, leaders should demand a plan that “expects the unexpected risks.” Every top executive, not just the CDO, CMO, or CIO should know what their top 10 digital risks are and how they have chosen to manage them. The goal is not paranoia, but we do need to strike a prudent balance between pace and progress versus bureaucracy and paralysis.

What digital risks are you facing and what is your management strategy for them?

This article was originally published on LinkedIn

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