We should have taken heed of Nicholas Negroponte’s words much earlier as an industry. In 1998 he said of technology that it ‘is already beginning to be taken for granted, and its connotation will become tomorrow’s commercial and cultural compost for new ideas. Like air and drinking water, being digital will be noticed only by its absence, not its presence.’
We are well on our way to the digital way of life being noticed only by its absence, if it isn’t already. The best manifestation of this is probably the well-known video of a two year-old child swiping a magazine as she might an iPad; the lack of movement in the physical object is completely bewildering to her. But sixteen years after Negroponte first spoke about digital technology becoming, in effect, like air, it is just not a big enough part of the boardroom agenda. This is important from a management perspective, as McKinsey research indicates, but I contend that it is even more important from a brand perspective.
Today, technology is very much core to the business of a brand. It isn’t just IT or analytics, as US-based digital consulting firm Undercurrent says. They refer to the need for companies to reorient everything they do in digital behaviour, as the basis for a ‘responsive operating system’. When almost everyone uses a smartphone (even in emerging markets, which global market intelligence firm IDC expected would account for 64.8% of all smartphones shipped during 2013, up from 43.1% in 2010), we’re all digital. But one look at the continued stronghold email (a communications tool from the 90’s) has within the corporate offices of most big brands, and we realise that they haven’t kept up with the times as much as they should have. Compare this to the flexible way of working of startups, who use collaborative tools hosted in the cloud to communicate cheaply, quickly, and effectively. Linkydink? Pie? Trello? Asana? Holacracy? Take your pick. And that’s just the tip of the iceberg.
Is this way of working practical for large companies with complex structures, wedded to decades of legacy thinking? It’s certainly not impossible.
IBM’s Lead Social Business Enabler for many years, Luis Suarez, was famously known as the ‘email-less man’. He abandoned e-mail a few years ago in favour of communicating with colleagues through social media – mainly Twitter, but also IBM’s internal network Connections. The advantages are obvious: openness, focus and getting things done at speed, rather than obfuscating issues in multiple back-and-forth exchanges. IBM are in fact currently working on a new enterprise communications system called Mail Next that brings in a lot of social networking and analytics features that can help employees work better than they do with just e-mail.
Burberry’s ex-CEO Angela Ahrendts puts it beautifully in a video describing how the company embraced Salesforce as an enterprise platform:
“We’re challenging ourselves constantly to stay ahead of the curve. Be it mobile, be it physical, be it social, they’re all one – life is forever blurred.”
That the company’s digital initiatives are a major factor in their corporate success can, in fact, be proved (their stock price has grown by a factor of 4 just over the last 5 years) . Capgemini Consulting and the MIT Centre for Digital Business analysed 391 companies [PDF], including Burberry, with varying levels of digital capability recently. After plotting them against a Digital Maturity Matrix that evaluated companies for digital intensity (investment in market-facing technology-enabled initiatives) and transformation management intensity (investment in the leadership capabilities necessary to drive digital transformation within), they found that those that are mature in both dimensions far outperform less-mature firms on multiple financial measures including revenue generation, profitability and market valuation (Burberry ranked well on both dimensions). On average, digitally mature firms are 26% more profitable than their competitors, generate 9% more revenue through employees and physical assets, and have 12% higher market valuation ratio. It simply makes business sense.
Let’s explore how this links in with advertising. I’d like to touch on four routes.
First, when digital behaviour becomes integrated into the language of business, its communications become much more responsive as a natural outcome. You can’t unlearn what gets embedded in the system. By ‘responsive’, I’m not talking about tactical or real-time marketing (though that might be a natural fallout). A modern brand will channel responsiveness in ways that can impact the product, by soliciting consumer feedback (mirroring, again, a behaviour embodied in startups, whose key to success is user research). After all, it all starts with the product and no amount of marketing can hide a product that is just not good enough to start with. At SXSW 2014, Gary Vaynerchuk put it like this: ‘worry about piece of shit products, not piece of shit tweets’ – I might have put it slightly differently, but, you know…!
Brands have channelled this search for feedback through crowdsourcing and co-creation, steadily becoming more creative over the last few years. It started with platforms like Dell’s Ideastorm and Starbucks’ My Starbucks Idea years ago, and today Quirky and GE are working together to help people invent and bring smart web-connected products to market. Ford has just revealed that they went to social media data to fine tune their hands-free liftgate, so though that wasn’t co-created, customer feedback did influence product.
The definition of a brand has always been nebulous; Feldwick called it ‘simply a collection of perceptions in the mind of the consumer’ while Ogilvy called it ‘the intangible sum of a product’s attributes’. While it still isn’t easy to build a clear picture, the idea of a brand has changed in many ways today, which brings me to the second reason enterprise brand activity is important: brands today are less intangible than they used to be. Brand activity both inside and outside the business actively contribute to the brand image, not just because word spreads like wildfire on social media but also because of the impact it has on the market value of a brand. A company that talks Digital First but has a website that isn’t mobile-friendly isn’t walking the talk, and hiding behind the curtains of a corporate office is no longer a viable solution to the hordes of people battering the brand down on Twitter. Equally, a brand that is seen to function ineffectively will take a hit on the stock exchange.
The third reason is because surfacing what goes on behind the scenes can supplement a brand’s popular narrative, and technology really enables that. Storytelling is crucial to the success of a brand, as much today as it has ever been. GE and Burberry are great examples of brands that reveal what goes on behind the curtains, especially via Instagram, adding considerably to brand stature. Small brands can use storytelling to their advantage as much as big brands. British brand Hiut Denim is a case in point. Not only do they publish ‘Year Books’ which collate their annual inspirations as a company and organise the annual Do Lectures which gives interesting individuals a platform for their personal stories, they use narrative very effectively to show the impact of the company on the small town of Cardigan in Wales, which was able to start making jeans again after an earlier denim factory shut down leaving 400 people jobless.
The fourth and final reason for considering a brand’s use of technology inside the business is the amount of data they will be able to gather from the way they work. In the modern age it is incumbent upon a brand to think about what they might do with the information they have access to. From a marketing standpoint, this can range from, for an FMCG brand, data regarding customer interaction with brand marketing through various touchpoints, to, for a bank or an online platform, data on actual usage of the service. This might induce them to copy-test their website, for example, or tweak content published on social channels based on response rates. But the kind of data that is hidden within the business can potentially be even more valuable. Amongst other things, internal data can help forecast new revenue-generating products. In fact Netflix was able to do this to come up with the winning formula for their original series House of Cards. It was the company’s insight into viewing behaviour that indicated that people who liked the original 1990 House of Cards series also liked films directed by David Fincher and those featuring Kevin Spacey, motivating them to put these ingredients together to create the new version – to great success.
To get to a point where being digital is truly noticeable by its absence, where it stops being a thing that is discussed separately, brands need to get their own homes in order first. In fact, let’s be honest, agencies need to do this as much as anyone else if they want to be a true partner to brands. It is only then that we will be able to beat the market, which, as the Cluetrain Manifesto told us back in 2001 (2001!!!!), ‘is getting smarter faster than most companies’.
It won’t be something most people want to do, but as with cleaning one’s own room, it is a task that just needs to be done.