Digital marketing is here to stay
With the advent of big data, marketers can predict which digital ads will be clicked on by which people, and they can value that click down to the penny and bid on them in real time. The result of this precision is an arbitrage on each individual person, experienced as advertisements that stalk one around the web.
Not only are they a little creepy, but these systems of ads represent a misunderstanding about what customers want and how they want to be interacted with. In trying to become part of a customer’s context, these ads are a hasty attempt to apply wallpaper rather than being genuinely useful or beautiful.
The good news for consumers is that these ads are the last gasp of the old wave of digital marketing and can be wholly avoided by using apps on phones or tablets. The bad news for CMOs is that this shift to apps puts new pressure on marketing teams who are trying to prioritise their budgets between “premium” and “programmatic” advertising with little time left over for thinking about digital experience.
The groundbreaking work in digital marketing is now in building digital platforms: dynamic systems that let a company’s customers and partners interact in new ways that they find genuinely valuable.
Nike is a good example of the new digital landscape. Rather than using ads, they built Nike+, a digital platform their customers depend on to track their own sports activity. Athletes, including weekend warriors, have chosen to put Nike in the loop of their day-to-day exercise habits. Nike+ is part physical, part digital: chips in running shoes, sensors in FuelBands and sport watches sending data to Nike and returning it to the athlete through apps.
With Nike’s digital customer intimacy, the company can make accurate recommendations on what new Nike shoes and clothing might be appealing, driving up both loyalty and purchasing. Since the start of this program, Nike cut advertising expenses by 40 per cent, while revenue increased 60 per cent and the stock price doubled.
Platform thinking is on display with Unilever, which piloted a digital platform for Hellmann’s Mayonnaise in Brazil. Point-of-sale data from retail partners is sent to the Unilever platform which then responds with a list of recipes which include just-purchased groceries and feature Hellmann’s as a key ingredient. The recipes, printed on the customer’s receipt, surprised shoppers with something unexpected and useful.
Next time you think “what’s my programmatic ad strategy?” ask instead “what is my platform strategy?” That’s where lasting value will be created: between digital businesses and their willing customers and partners.
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