Why Brands Should Embrace Technological Change

Avi DanIt took the telephone 45 years to penetrate half the homes in America; radio, less than 20; color TV, 15; computers, 10; cellphones, eight; and the internet, a mere six years. The speed of change is accelerating. Five years ago Facebook, Twitter, YouTube, Hulu and the iPhone didn't exist. Today Facebook has 350 million members; Twitter boasts 30 million; and Hulu is the second biggest "channel" in America, having surpassed Time Warner Cable. Technology now has profound impact on consumer behavior. Take brand loyalty, for example. Smartphones enable consumers to comparison shop on the basis of price at the point of sale. The democratization of information may result in commoditization of brands as consumers make purchase decisions by searching for the lowest-priced product. Technology may also alter the purchase cycle and give rise to powerful third-party influencers, counterbalancing paid media's "management" of the purchase cycle. These are transformational shifts for brands. Yet while consumers and retailers embrace these innovations, one group seems to be conspicuously lagging behind the rapid technological evolution of the marketplace: marketers. Consider this: Ten years ago, at the beginning of the decade, consumers spent 30 minutes online. Today it's four hours, according to Media Metrix, twice as much time as they watch TV -- and that time spent does not include e-mailing. In this decade broadband expanded from 3% to two-thirds of American homes. Yet marketers barely adjusted their approach. While investment in digital advertising has crept up some, roughly 90% of budgets is still spent on traditional channels like TV. Change is always difficult, but marketers should be more aware of the new marketplace or run the risk of consumers disengaging, rendering their marketing programs irrelevant. The marketing narrative needs to be rebooted and the architecture of brand building re-engineered. CMOs must recognize that the speed and scope of change are so overwhelming that they need to dramatically revamp their marketing ecosystem. A good place to start is reviewing the scope of their relationships with their agencies. CMOs must demand that all of their agencies, and not just the digital shop, become technologically savvy. Procurement also needs to evolve its scoring of intellectual-property vendors and consider technical expertise as part of the value proposition. Second, marketers should strive for mutuality and non-partisanship in brand stewardship. Today, it is ensconced with the "traditional" agency, while other disciplines play a supporting role. Of course, if you spend 90% of your budget with traditional agencies, that makes sense, but it also leads to silos and makes integration hard. As the landscape is changing, the digital agency, the PR firm and especially the media agency should play an equal role in brand stewardship. The media agencies in particular can play a unique role in that they are at the intersection of creativity and technology and can best assess how to calibrate them and help marketers through the challenges of a technology-driven marketplace. CMOs must lead a number of internal changes as well. The first is to recognize that technology is no less a marketing tool than, say, market research, and appoint a "marketing-technology czar" to champion it. That person's responsibility will be to act as a cross-functional facilitator and identify technology that can enhance marketing activity and brand building. Further, as consumers adopt technology at the speed of light, CMOs should act as innovation evangelists, pushing technology into all facets of company operations, to ensure that the company is customer-facing and that brands maintain relevancy. And as all employees and the company culture are significant marketing tools, one of the areas that marketers should have greater involvement in is the human capital of the company, working closely with HR on hiring and firing standards. In the 21st century companies should hire people who are inclined toward technology and accept change as a given. That does not necessarily mean that those people are IT experts, but rather that they are curious, adapt easily and are inclined toward collaboration and social media. Interestingly, the best technologies reinforce very old-fashioned values of brand building. Zappos, Comcast, JetBlue and Virgin America use Twitter to reinforce their image of delivering exceptional customer service (interestingly, and perhaps, therefore, so effectively, in categories that are not known for it -- retail, cable and airlines). But that is exactly the point of technology and marketing. As new technology replaces the obsolete, a brand can continue and hold its positioning while modifying the technological delivery platform. The problem CMOs face with mastering technology, and with the internet, is very simple: There is so much going on simultaneously and things change so quickly that no one, absolutely no one, can know everything that's going on. Ten years ago a marketer needed to know maybe 100 things to be effective: some aspects of positioning, some aspects of media, some media research, some pricing, some distribution. Now that number is in the thousands. And whereas technology used to advance incrementally, it now evolves exponentially. As marketing tasks mushroomed and time became compressed during the recession, CMOs found themselves in a position of having to do more with less. To navigate through the added complexity of the technological eruption, they have to go beyond just tolerating it to become active participants and advocates of the new marketing ecosystem. They ought to embrace the speed of change and view it as brand asset.

Why Brands Should Embrace Technological Change

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