Digital transformation isn’t a new trend: businesses worldwide started using data and technology to upscale their capabilities years ago. From this perspective, nothing has really changed with the coming of the global pandemic. The mere fact of technology adoption may not have changed, but it has started moving at breakneck speed, and that’s why it’s time to rethink your digital transformation strategy.
In their new research, Google analyzes the current situation and suggests several ideas on preparing your business for accelerated digital transformation. In this article, we’ll give you an overview of this study, as well as share our take on the issue. Let’s get started!
The Context: Digital Adoption Among Consumers Is on the Rise
COVID-19 has forced people to move virtually all aspects of their lives online. Let’s take a look at three fields that are influenced the most.
Digital video has become more relevant to users than ever. According to Google data, searches for “shows to watch” has grown globally by more than 100% year over year, while watch time for YouTube and YouTube TV grew 80% year over year in the U.S.
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Companies large and small were forced to work remotely and learn online, which reflected in search behavior: for example, searches for “online learning” have grown globally by over 400% YoY.
Bank of America reported that in the U.S., ecommerce penetration grew more in the first months of the pandemic than it has over the past 10 years.
Beyond that, the global pandemic caused health and economic crises, giving rise to uncertainty and unpredictability. Satisfying customers’ needs in this new reality is a major challenge for businesses.
To learn more about how the COVID-19 pandemic is affecting the digital space and how you can help your website handle surges in traffic, read this post on our blog: Make Sure Your Website Endures Increasing Online Activity.
The Challenge: Reinventing Your Business in Response to the New Conditions
To keep pace with these changes, businesses need to build a new product, channel and demand strategy to accelerate their digital transformation. Their challenge is to find a way to identify and satisfy consumer needs in a dynamic market, while also contributing to short-term growth and long-term resiliency.
The Opportunity: Leveraging Data to Keep up With Rapidly Shifting Consumer Demand
Digital transformation isn’t about creating a website. It’s about leveraging data and technology to run your business more effectively. Companies that embraced digital transformation were ready to meet all those sudden changes with speed and agility.
Google data shows that 32% of people in the U.S. (and between 21% and 60% globally) have shopped with a new retailer since the onset of COVID-19. Here are just a few examples of how companies used data to build a new strategy that satisfies customer needs at this very moment:
- A major U.S. airline used aggregate Google flight demand data to identify routes with low click share and high search demand, and used these signals, in combination with first-party data, to prioritize the reopening of some routes over others.
- A film studio analyzed search interest for a new film at the zip-code level to determine whether and where demand existed for a theatrical release.
These examples show that satisfying dynamic consumer demand can help businesses get ready for what’s next. Technologies allow us to go beyond explicit needs and meet consumer demand in real time in ways that people find meaningful. And that’s a recipe to grow your business.
The Idea: Switching From Basic Personalization to Meaningful Ads
Google offers an idea of how businesses can monitor customer demand in real time and use this information to satisfy customer needs, even if the demand is volatile. They suggest businesses change their advertising strategy from regular personalization to creating ads that are really meaningful to the user. But what’s wrong with basic personalization?
Basic personalization is limited: marketers can make inferences about a consumer’s purchase intent from an isolated touchpoint occurring in a single moment. This way they see only obvious connections and can’t go beyond explicit needs, while data-driven marketing and technologies could allow them to deliver something meaningful in a customer’s life.
To deliver a meaningful experience, marketers need to find the connections between different touchpoints. The question to ask isn’t, “What can I sell this person?” It’s, “How can I help this person?”
The Implementation: Analyzing the Full Context
Here’s an example of what it can look like. A 55-year-old man from Tokyo lately searched online for:
- English classes
- Dorm room supplies
- Vacation rental hosting sites
- House cleaners
In isolation, his searches for English classes and rental sites might give advertisers the idea to offer him ads for vacations to English-speaking countries to practice English. But the context could be much larger than that.
In fact, this man is a father who was searching for dorm supplies, because he had just sent his daughter to college, He realized that raising children had helped him feel young, so now he’s scared that he can get out of touch. That’s why he decided to gain new experience by renting the now-vacant bedroom to tourists, and that’s why he wanted to buy a house cleaner and learn English.
Offering him a trip to London was a mistake. Instead, advertisers could offer him product solutions for his deeper need to stay young at heart: new hobbies, adult education, cultural experiences, English movies, Japanese gifts for guests, a new bicycle, and more.
That’s how they can be really meaningful to their customers by acting on consumer demand in real time and speaking to their deeper needs, motivations, and interests. Google signals allow you to identify those deep needs and deliver meaningful ads that make customers’ lives better.
The research showed that such ads spark a more than 31% increase in excitement and an over 50% increase in pleasant surprise, while reducing indifference by 68%.
What This Is All About—Our Perspective on the Issue
In fact, Google recommends everyone to have a product mindset. To break this down, let’s take a look at the value proposition canvas.
“Google suggests we analyze search and other signals as customer job components. In fact, we need to use automation to analyze what users search for on Google and what they watch on Youtube to understand what jobs they are trying to get done. Returning to the example with the 55-year-old man mentioned above, his main job is to stay young at heart. However, we need to construct such high-level jobs given the set and context of search signals. Tasks like that are usually related to the areas of Natural Language Processing and Semantic Analysis.“Ilya Telegin, Business Development Manager at Uploadcare
It’s important to mention that, obviously, we rarely target a particular 55-year-old—that way we wouldn’t get a proper return on advertising spending (ROAS), at the least. We try and target a segment of ~55-year-olds who want to stay young at heart.
So, once we’ve created a customer profile based on job segmentation, we ensure our product gets the core job, e.g., helps someone “stay young at heart.” Then we identify customer pains and gains to figure out how to improve the product or at least how to sell it better.
Getting back to our example, after analyzing his Google searches, we found out that our customer wants to stay young at heart. To get this job done, we can recommend he find a new hobby—yoga. This will also improve his health, which covers his pains. And this will help him improve his concentration and gain better control over his body—which are gains. And we have at least two assumptions here: 1) we sell yoga classes or something; 2) we were able to properly construct the “stay young at heart” job out of “house cleaners.”
Thus, we form a value proposition canvas, and then we find how our product can help, and how we can present it to the customer in the most meaningful way. After that, we can form and test product and marketing hypotheses and build an advertising strategy.
It’s true: the advertising market got complicated, and using one Google query in isolation is not enough to build an effective strategy. To satisfy today’s customer needs, we need to analyze the overall context. This approach can help you dramatically increase your conversions. The problem is, it requires a lot of resources and thus skyrockets Customer Acquisition Costs. In reality, our economics could better converge if we tried selling house cleaning services to those who googled “house cleaners.”