Is it going to location-based marketing? Hyper-local marketing? Google+? Facebook’s timeline? Twitter ads? Social Search? What about the convergence of mobile and social? Touchscreen computing?

Clients ask me that question all the time and my answer remains the same:

Nobody knows what the next big thing is going to be. Nobody. More importantly, you shouldn’t be concerned about it. We haven’t even figured out the basics of digital marketing yet.

Let’s be frank here: The only working tactic working in the digital space is SEM. Measurable, scalable and tied back to your basic ROI. Once you leave the SEM area, digital marketers continue to work in the Wild West. We still haven’t worked out how to engage with customer through display advertising. Instead, we try to try work the attribution and measurement game:

“The metrics are all wrong.”

“It’s not about the last click.”

All true but it doesn’t instill any confidence in our clients when we sell our arsenal of digital tools with a major asterisk attached to them.

We need to fix digital marketing from scratch.

SEM/SEO? Check

Display advertising? Clearly, we need to start from scratch. We have optimized the delivery of ad units to customers but the creative side of the equation continues to be abysmal. The declining click-through rates are proof of that.

Social Media? Most companies have still not understood the power of Social Media. 95% of marketing efforts on social platforms continue to be megaphone-style, mass marketing efforts. Cutting down the power of Social Marketing to almost nothing.

Location-based marketing? Coupons are nice but they are not the be-all and end-all of location-based marketing strategies. By focusing on pure coupon play, you’re missing out in great opportunities.

The next big thing is already there.

Actually, there are many next big things. You’re just not using them properly yet. You’re not innovating enough using all these new platforms.

The majority of brands act like little children riding a bike on training wheels. After a few minutes, they get off the bike and ask: “When can I drive a car?”

Let’s try to ride the bike properly first.

I just attended a media conference. And I was shocked to realize that the digital industry is still stuck in the old accountability paradigm. Our standard ROI measure is still the difference between the cost of the campaign and the cost of reaching the same number of people in more conventional media.

That is not return on investment. It’s the kind of measurement that lead us almost to the financial abyss.

It’s silly accounting, just like the CDO’s, the derivatives and the other financial instruments that almost turned our economy into a barter society. The only metric that should count is the incremental profit that your marketing executions generated for your business.

Instead, we focus on silliness like click throughs, cost per impression, cost per action, page views, unique views, engagement rates.

Incremental Profit.

It seems to be a real challenge for marketer to measure incremental profit. Or, maybe they just focus on the wrong metric, on things that make no sense but can be aggregated fairly quickly.

I know, it’s hard to measure incremental profit. But it’s only the admission ticket to the big boy table, to talk business to the CEO. And not bright, shiny objects with the Marketing Manager.

Blame the addiction to accountability.

Accountability sounds great, doesn’t it? You can explain each penny you invested for your client, you can show wise use of the budget and explain what happened with all his money. It’s also a good way to show the client that you’re so much better in investing money compared to the other, wasteful agencies. The sad truth is that what you measure makes no difference. You’re just measuring efficiency, not the impact of advertising. That’s why we’re in this spiral of cheaper and quicker and more efficient. The race to the bottom, the race to the be the next forgettable commodity.

I’ve never met a CEO who cares how you spent his money.

They care if marketing has an impact on the bottom line. Did it make the business more profitable? Did it grow the business? Digital Marketing needs to get out of that hole (we all dug ourselves) to focus on efficiency. It’s about impact.

Here’s a question for you: Would you rather have no money wasted, deploy the most efficient campaign but have little impact? Or, would you rather waste 90% of your money, but the remaining 10% grow your overall business by 20%?

Exactly.

Nobody says you should waste a dime. But the addiction to accountability creates silly communication vehicles (ahem….Zynga) and burns so much money for clients, it’ s tragic. We develop brand fluff on all these social platforms and pointless display ads to make it even worse. Highly measurable, Excel spreadsheet adoptable and totally useless.

If you think that’s okay, keep on trucking. But, don’t expect anyone to take you seriously for one second. The real game is in changing the future of a brand, improving the balance sheet of a company. For that, we need a measurement intervention.

I live on the Web. 95% of my media consumption is done through a computing or mobile device. In average, I see thousands of banner ads and digital campaigns each day. The problem is, I don’t really see them. I ignore them. I blur them out.

Today I watched an NBA Playoff game and I discovered Chrysler has new products and was reminded to see “Modern Family” once in a while. Later, I read through a few magazines and saw that Asics has pretty cool shoes, there’s a new drink “Neuro” that markets through a sexist campaign and Hilfiger lost his touch.

Why did I pay attention to print ads and commercials, while, at the same time, I don’t recall any digital ads?

Heavy usage equals minimal impact

There are times when I watch a lot of TV, the World Cup comes to mind. Up to 8 hours of soccer, constantly interrupted by commercials that I ignore and blur out. When I return to my usual habit of 30 minutes TV each day, I register each ad.

When I used to get physical newspapers on a daily basis, I never noticed any ads, the inserts ended immediately in the trash. The Sunday New York Times is the only physical newspaper I still receive, and I go through each insert, look at each advertising.

A person that uses the computer sparingly will be more likely to be impacted by a flash ad. They might enjoy the roll-over experience, expansion of banners, etc.

We should never align ad spend with media usage

Many pundits complain about the misalignment of usage and ad spend.

Don’t listen to them. The exact opposite should happen:

Trying to reach affluent technophiles in their 30’s? Spend the majority of your money on the few print publications they still consume, the few TV shows they still watch. A Wired print ad will be more impactful than a display ad on wired.com.

Need to communicate with grandparents in their 50’s? Heavy up on digital because majority of their media consumption is still through print and TV. You might even delight them with your banner ad.

Measure impact. Not some vanity metric.

The only metric you should invest energy in collecting and analyzing are those that help you make better decisions. And impact your bottom line. The majority of data available are just vanity metrics. They might make you feel good (“2,500 followers!”, “We had 1 million hits!!” and “We served 3 trillion ads!!!”

Do you think a virtual gift will lead to a sale?

Do you believe a million Facebook fans will lead to 1 million sales?

Do you really think people want to get more ads on their mobile device?

I mean, really?

No, really?

Not every media tactic will lead to a sale. But each brand interaction should have an impact. Or you’re wasting money.

In a world driven by human and intellectual capital, traditional Org Charts, Employee Handbooks and most traditional tools that used to help enterprises to run their business have become increasingly unreliable and ineffective. High performance and value creation doesn’t originate from to traditional enterprise tools or new technologies, it originates from focusing on the human side of business.

Jack Welch had it right when he said: “The essence of competitiveness is liberated when we make people believe that what they think and do is important – and then get out of their way while they do it.”

Enterprises face the biggest challenges to humanize their business since their organizations are driven by spreadsheets and shareholder value. As we’ve learned throughout the Great Recession, many companies leveraged their future away by focusing on short-term gains, destroying long-term value over time.

While shareholder value will remain a dominant metric, businesses have to focus their attention more and more on their relationships with customers, employees, partners, and all other stakeholder groups. By investing in these relationships, businesses will be able to create long-term value and, ultimately, shareholder value.

We believe that those organization aspiring to succeed in the current socio-economic environment have to understand holistically who their key stakeholders are and what they want. They have clearly defined strategies to ensure that constant value is delivered to these stakeholders. They have implemented processes to support this strategy and understand the necessary capabilities to execute processes. And they have thought through and communicated what the organization needs from its stakeholders – Loyalty, profitability, investment, etc.

Too often, metrics are derived from strategy. It seems so obvious. But it’s a trap. You can go from A to B directly, pass by C or go from A to D to C and end at B. Strategy is not a destination, it’s a choice of one path you’re going to take. Metrics help you track whether you’re moving in the right direction. Most corporate initiatives are focused on incremental improvements – expand your business to a new market, grow your product line, find new consumers. All these initiatives are developed with the belief that they will enable the business to deliver better value to all its stakeholders. That’s why focusing on the stakeholder perspective is imperative to deliver replicable value, choose the right strategy and exact metrics. When formulating strategies, businesses need to consider the wants and needs of all their stakeholders. This is not limited to primary stakeholders, the view needs to be expanded to the general public, special interest groups, legal and regulatory community. If this broad view of stakeholders is not adopted, businesses run the risk failing to satisfy the needs of their stakeholders, opening themselves up for revenge on multiple Social Media channels.

So, what is the best path for businesses to increase stakeholder value?

1) Stakeholder Satisfaction: Who are the most influential stakeholders and what do they desire?

2) Performance Strategies: What strategies should the organization adopt to ensure the desires of stakeholders are satisfied?

3) Measurement: Metrics are required to track if the chosen strategies are actually implemented. Metrics help to communicate strategies throughout the organization. Metrics combined with incentives help to speed up implementation. And, ultimately, metrics help you determine if the chosen strategy was the right one and if not, why. When the measures are consistent with the organization’s strategies, they encourage behaviors that are consistent with the mission and vision of the business.

4) Align processes with strategies: What processes do we need to put in place to allow the strategies to be executed?

5) Capabilities: What capabilities do we require to operate these processes? Today, tomorrow and in the future?

6) Stakeholder Contribution and Collaboration: What contribution does the business require from its stakeholders to succeed? How can we maintain and enhance these capabilities?

This complex exercise will help your business to face the challenging socio-economic environment and adapt efficiently. Or as Jack Welch said:

“An organization’s ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage.”