Dealing with Digital Disruption

How to prosper in a world of Digital Disruption

It’s become fashionable in business/ technology circles to talk about ‘disruption’. As a ‘good’ thing. Not like a broken-down train on the London Underground which causes chaos in the evening ‘Rush Hour’, or the alarming and possibly dangerous cracks in the structure of the M4 which shut down the main motorway from Heathrow Airport just weeks before the London Olympic Games, nor even the biblical scale flooding that turns Silverstone Motor Racing circuit into a sea of mud during the British F1 Grand Prix.

No. We’re talking about ‘positive’ disruption which shakes up something that really needs it; e.g. an industry that has collected cobwebs, which has become inefficient, complacent, bloated, greedy and /or decadent. Indeed the current tide of ‘Disruptive Digital Innovation’ is akin to the Visigoths’ rampaging through the crumbling Roman Empire which, historians generally agree, had by then passed its ‘sell-by-date’ and was over-ripe for a healthy dose of Vandalism.

What is digital disruption?

So let’s talk about Digital Disruption. The emergence of the internet and specifically the worldwide web have changed many things in the world around us: how we communicate/ stay in touch with our friends, family and business colleagues, how we work and play, how we learn and how we buy things. Specifically it has changed business and marketing.

It’s not always via one catastrophic event, more often through a series of significant changes to hardware and software over a relatively short period of time (think vinyl records –cassette tapes - Sony Walkman – CDs – Napster – iTunes - iPod -The Pirate Bay etc) Depending on your perspective, these changes may be for better or for worse but some industries have certainly changed fundamentally and forever. We can never go back. So we’d better deal with it.

Who has been disrupted?

Of course, every business has been affected by the emergence of the web over the last 20 years but some have been completely transformed - changed beyond recognition. Examples include:

• the music business
• banking and insurance
• photography
• retailing
• travel agencies
• newspaper and magazine publishing
• telecoms

In these industries, agile companies have and are re-engineering their business processes and transforming their operations in order to survive and prosper in today’s digital-enabled world.

On the other hand, we can all think of once-great brands whose owners failed to spot the massive disruption which the new technologies have brought and consequently paid the price: Kodak? Borders? Encyclopaedia Britannica- no wait, they’ve gone digital. National Postal Services? No they’re propped up by governments- for now. Print Newspapers? Watch this space.

Looking beyond the companies/ vertical markets above, we can speculate as to who’s next? We can certainly foresee likely disruption in other industries e.g. the movie business, books, printing, TV (hardware and broadcast), transportation, advertising to name only a few of the most obvious.

It is clear that both large and small players in these disruption-prone industries urgently need to evolve to counter the emerging threats and to take full advantages of the new opportunities. Specifically, integrated (rather than digital) marketers need to consider:

• How technological change affects purchase behaviour (B2C and B2B)
• How the web has empowered customers but also added complexity to their lives
• How forward-thinking businesses can adapt to thrive in the new connected world

And disruption doesn’t just mean ‘old’ (offline) brands retiring and making way for new ‘digital’ players. Although the web is barely 20 years old, we have already seen major companies rise and fall during the internet age. Although online brands rarely disappear altogether (since someone always buys the domain name) we might reflect on the past glories of AOL, MySpace, Napster, excite, CompuServe, Boo.com, Sega, and dare I say even Nokia, Motorola and Yahoo(?).

Of course new technologies have always disrupted existing technologies; e.g. consider the massive impacts of: the printing press, the weaving loom, agricultural mechanisation, the telephone, the railways, the internal combustion engine and now of course the internet and more specifically the world wide web itself. However the pace of change seems to be accelerating. Marketers today, across multiple business sectors, are facing transformational effects of new technologies which are fundamentally changing buyer behaviours, meaning that organisations selling products and services to these end-users must in their turn adapt - or die.

There will undoubtedly be winners. And losers. There are also ‘new’ online businesses who are wholly reliant on the internet/ www for their very existence (e.g. Google, Facebook, Twitter, eBay and Amazon). Some of these have successfully monetised; others have a credible plan to do so. But all are faced with the urgent task of adapting to a fast-changing world in order to build on what they’ve achieved and stay ahead of the inevitable new challengers.

So will Google, Facebook, Apple and Samsung be so dominant in 10 years’ time? No-one can say for sure. It is clear that we are living in highly volatile, yes even ‘disruptive’ times. More than ever, organisations must retain a clarity of vision and focus on what really matters. They should embrace the new marketing channels only insofar as they offer new, more powerful ways to connect with prospects and customers with greater ROI. They must build profitable long-term relationships via these new platforms whilst recognising that the old (offline) media are still present and in most cases still an important part of an integrated mix.

What are the implications of digital disruption for businesses?

So what does all this mean for marketers facing an uncertain future? The reality is that even if your vertical gets disrupted, you can still prosper if you observe intelligently, learn and act. Don’t cling defensively to old ways of doing things if all the evidence is pointing in a different direction. Unlike Kodak, put tradition and emotion aside, look around and ahead dispassionately and don’t be afraid to change direction completely if that’s where the technology is taking your target market. Think 360 degrees/ media-neutral using analytics to lead you to insights driving decisive action…”.

As marketers, we should neither fear change, nor be dazzled by exciting new technologies/ platforms, awarding them large shares of the marketing budget purely for their own sake. Instead, every channel must pay its way and prove its value. Adopting truly integrated (multi-platform) analytics and attribution modelling is the only way forward. Those companies who retain perspective, who observe and learn from what’s going on around them and, above all, stay close to their customers, will be the leaders of the next round of Digital Disruption, not its casualties.

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