The question of digital in companies today is very much a ROI discussion. In fact it is the negative effect of not understanding it, that has been spreading slowly to not only companies like mine but clients as well. My argument in context to my business, is that this lack of understanding of ROI is stemming primarily in the existing talent gaps resulting in an indirect challenge to an age – old legacy of how companies should run. There are some surprising insights though, that I’ve decided to cut this article into two parts. The talent market itself and what CMOs, brands and agencies think, which I will post later on this week.
It Pays To Be A Digitally Integrated Marketeer
According to John Ebbert, managing editor of AdExchanger.com, a web site dedicated to advertising technology – “There is pain for hiring in digital at all levels”. The talent pool, advertising technology company executives say, is not a deep one. And those who have the skills are in high demand, often fetching annual salaries that can reach $100,000 or more. In Singapore, according to two surveys done by Hudson, called the Salary & Employment Insights 2013 as well as the Market Trends & Salary Report by Ambition Group, there seems to be about a 30% increment of salary with regards to a digital trained employee, compared to regular advertising employee in an agency with the same rank and years of experience.
“There is pain for hiring in digital at all levels” – John Ebbert, AdExchanger.com
Why the increase? There could be numerous reasons for this. For one, the fast-growing digital economy is increasing the demand for highly skilled technical workers. In particular, the emergence of social media is putting a premium on developing new forms of digital expression and marketing literacy. This is seen when in a survey done by Adobe that showed 13% of clients agreeing that Social Media will be most important to marketeers in the next three years.
A Decline in FTE Returns
According to a another survey done by Oxford Economics, of all technical capabilities, digital business skills are seen as most critical—particularly in Asia-Pacific,where e-commerce is mushrooming because of the early adoption of new digital technology as way to “leapfrog” an inefficient legacy infrastructure.
Price Water House Cooper’s annual “HumanCapital Effectiveness” report done in 2012, also sheds some insight into a decline in returns from employees in the US.
What would be interesting to note is that a transformation happened in 2008 in terms of increase in Labor Cost vs. a decline in Revenue per FTE. The only thing is, it happened for the worst in this case for reasons yet unknown clearly.
By these findings you can’t deny a valid claim that the demand and lack of supply does have an odd effect in price paid for by companies for digitally trained staff.
This is forecasted in the same survey titled – “How the new geography of talent will transform human resource strategies”. They claim that by 2021, Singapore’s work-force will reflect a negative deficit of talent, and ranked among the lowest globally.
Some Catching Up To Do
Another factor observed from talent gaps is arising from the commitment of agencies and clients to want to invest. This could be in re-training existing staff or implementing new workflows to meet the new digital economy.
A new study by Accenture Interactive, “Turbulence for the CMO,” reveals that 70 percent of the CMOs of some of the world’s largest enterprises think they have five years to fundamentally overhaul their companies’ corporate marketing operating model to achieve competitive success.
It also indicated that One in five CMOs rates him or herself below average in multichannel attribution, correlating advertising to sales and measuring media and buying effectiveness.
New research from Econsultancy and Responsys suggests that marketers are having a harder time measuring their ROI from digital channels. Among company marketers surveyed – primarily from the UK (46%) and other European countries (19%) – just 50% rated their understanding of ROI from digital marketing channels as “good” (33%) or “very good” (17%), down from 55% last year.