Digital marketing key to staying ahead

The rise of online social networks such as Twitter and Facebook and social commerce services like Groupon are changing the way people do business. For companies, it’s a bewildering challenge that comes with disruptive changes everywhere.

Traditional tools won’t work in the digital era, with people exchanging ideas and information about products and services at a frenetic speed. Companies are now scrambling to reconfigure their business models, infrastructure and whatever necessary to stay ahead, often finding themselves confused and disoriented.

Lee Sung-youl, head of IBM Korea Global Business Services, said the key is to change the customer strategy at a fundamental level.

“In the past, the so-called back-office functions were maintained for handling customer data, but now companies analyze customer data in real time as soon as customers enter the Web,” Lee said in an interview with The Korea Herald.

Lee, a veteran in the consulting business, said social networks and social commerce are playing a decisive role in bringing about the latest changes in the corporate field.

IBM sums up the underlying change as “digital marketing,” a mix of smart commerce and Web analytics, and Lee stressed that his GBS unit, whose businesses include consulting, accounting, system integration, application management service, is pursuing a unified strategy called “differentiated offering.”

Lee said differentiated offering means GBS is pushing ahead with an asset-based strategy thanks to a series of recent acquisitions by IBM. To use IBM’s in-house terminology, GBS is engaged in Smart Planet for public and government projects, Smart Commerce for digital marketing and Smart Manufacturing for the manufacturing sector, and the common thread in the three fields is “directness.”

Digital marketing is essentially geared toward direct contact between customers and corporations, and IBM is helping its corporate clients map out strategy, set up business analytics tools and build up applications and services.

Lee said Korean firms could learn from how Apple has implemented transformative changes not by creating something entirely new from scratch but by putting together existing technologies creatively.

The three factors were broadband access, content purchase and IP-enabled devices. The spread of high-speed Internet enabled and encouraged people to buy goods online via digital gadgets that come with Internet surfing capability, and it’s Apple that created a unique business model taking advantage of the three elements.

“With content taking the center stage, the customer’s experience affects sales directly, so companies should maximize this aspect, which is now implemented in the form of digital marketing,” Lee said.

In the era of content-based convergence and user experience, companies around the world, such as Amazon and Google are piecing together Web analytics and personalization technologies to compete.

Lee said Korean companies are now embracing digital marketing quickly, but a change in perspective is in order.

“What should be changed is the marketing strategy, because this is not just about the Web,” Lee said. “This content-based transformation should not be taken as something that the IT department has to do, and actually this is something the chief marketing officer has to take charge of.”

Lee said new technologies will free up restrictions further, allowing companies to experiment with more diverse products and services.

“What will matter most is whether the companies could nurture a competitive ecosystem based on long-term investment,” he said.

By Yang Sung-jin (insight@heraldcorp.com)