Archive for the ‘Forbes’ tag

If You’re Not A Start-Up, You’re A Turnaround

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This article is by Nigel Morris, CEO of Dentsu Aegis Network Americas & EMEA.

This summer something profound is happening in the economy, with around $30 billion of media and marketing services in review simultaneously from many of the world’s biggest companies. This is because soon we will look back on 2014 as the year the digital economy became dominant.

Where previously digital businesses had to fit into an analog economy defined by the dynamics of the 20th Century, established businesses must now fit into a digital one.

This has accelerated the pace of start-up entrants in almost every sector. They are leveraging the digital economy’s dynamics and lack of legacy in the old model, and threaten to take down some of the world’s strongest global companies. Near-perfect competition is creating huge opportunities and disrupting almost every business sector – as well as society and culture.

How fundamentally different is this digital economy?

Consider that in January a San Francisco-based grocery delivery startup, Instacart, raised $220 million with a pitch to investors that was, in short: We have nothing. Instacart CEO Apoorva Mehta told The New York Times, “We don’t hold inventory, we don’t own warehouses, we don’t own trucks. The changes we make are software changes.”

Meanwhile, last summer, 600,000 football fans traveled to Brazil for the World Cup and about 120,000 of them stayed in accommodation through the Airbnb network. A seven-year-old company that doesn’t own any inventory is now one of the biggest challenges facing hospitality brands that have been around for decades. It has no rooms, it buys no soap, it launders no towels.

But companies such as these do have something very valuable: people.

The reason startups such as Airbnb and Uber have become so disruptive so rapidly without traditional sources of competitive advantage is that they’re designed to take advantage of the connected infrastructure of the digital economy.

They don’t just have a base of customers or consumers that can be defined by a share of market; they have scaled networks of connected people. These networks match demand and supply, an important step toward perfect competition and a big reason the digital economy is so different and disruptive.

Another important way of thinking about this is that they are “Audience Businesses;” only the audiences are dynamic, rapidly growing and the source of the asset values of everyone from Facebook to Nextdoor. And with every action their customers take, they learn more about them and what they need or want.

In a digital economy, value is created through networks of connected people. They form with or without a company’s involvement, primarily through social channels and digital media, where the vast majority of contact between companies and their customers is migrating. Already these networks have changed the relationship between consumers and brands. The opportunity now they need to be activated at scale by established organizations and become core to the way they operate. Primarily through their brands, they must become “audience”—a core business discipline treated now as a passive group of people to market to, but an organic asset to be nurtured, activated and monetized.

Data management and marketing are key to driving this transformation as digital media not only delivers information or messages but also sells and even generates products as brand engagement and business transaction converge. And it generates data. Every action creates a data point and behind every data point is a person.

As digital media and data grow more important, marketing is also transformed to become the sensor of the organization and critical to the success of the whole business.

As the regional president of a Fortune 100 company said at one of our recent Innovation Summits: “Marketing is way too important to just leave to the marketing team.”

Smart businesses will move away from existing marketing and research methodologies and instead listen to the data, which powers the sensor and enables the organization to respond. Companies will be able to deliver products, services and communication that people want, not simply sell them what has been produced, enabling them to be much more resource-efficient, which is not only good for the bottom line but for society as a whole. This is a real potential benefit of the digital economy and a fresh narrative on the issue of data.

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Written by Stephanie Rudnick
Stephanie Rudnick

July 20th, 2015 at 2:30 pm

Learn How To Speak American

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USA speech bubbleMKTG INC strategic partner and heartland consumer expert, Paul Jankowski helps brands effectively engage the most influential yet often ignored population—The New Heartland.  In his recent Forbes article, he encourages you to “clear your schedule for a couple of days, put on comfortable clothes and get to know your consumer’s culture.  Consider yourself invited to Nashville.”

He’ll be happy to show you around…

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Written by Stephanie Rudnick
Stephanie Rudnick

August 6th, 2012 at 8:52 pm