Marketing is undergoing historic changes and many of today’s business enterprises will be turned upside down as a result. This shift is creating new business models, new centers of business power, new cultures and, most importantly, new leaders.
Marketing is fast becoming unrecognizable to its current practitioners. Digital delivery has disrupted and transformed all of the traditional media and marketing communication channels, even TV. Every channel is becoming personalized, with ads targetable and measurable at the level of the individual.
What’s more, these channels can now be integrated in real-time with each other. And that integration goes much further, directly into the business enterprise and its systems. Here is one example of how far this integration can go: we are on the verge of ads that are delivered on platforms like Facebook and synchronized with TV ad campaigns, while both are evaluated together at the marketing enterprise to measure their contribution to sales that day. Soon, artificial intelligence will drive decisions about both advertising creative and distribution on all channels simultaneously.
The creation of consumer demand, on-demand, will be the new reality of the business enterprise. Marketing will go from being the tolerated, hard-to-attribute cost center of the business enterprise to the predictable, provable profit center and customer creator that it’s long aspired to be. The skills that will help companies win will be the important ones like truly understanding consumers, listening to them and falling in love with solving their problems.
What is old will be new again. It was more than 60 years ago that Peter Drucker implored the business enterprise to focus on marketing as THE core competency. As he wrote in The Practice of Management in 1954, “Because the purpose of business is to create a customer, the business enterprise has two — and only two — basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.”
Unfortunately, most large consumer-focused businesses long ago forgot–or ignored–that admonition. Procter & Gamble may have achieved greatness once through marketing, but it long ago made core competencies of distribution, promotion and financial engineering, not marketing. It’s no wonder that the company finds itself today under pressure from activist investors and has announced plans to sell off hundreds of its brands.
Marketing will go from being the tolerated, hard-to-attribute cost center of the business enterprise to the predictable, provable profit center and customer creator that it’s long aspired to be.
In the emerging, technology-driven marketing world where the predictability of customer creation will approach near certainty, winners will look quite different than the P&G’s of old. We will see smart, agile, marketing-centric companies that will be born and built into category killers overnight, with no legacy production and distribution, and take billions of sales from asset-heavy companies in just dozens of months. Look no further than Dollar Shave Club.
We will see evolved marketing models where retailers spend billions to own media and to own the resulting audiences as customers, rather than renting access to them temporarily through advertising. Look no further than Amazon, which will spend almost three times as much on content for Prime Video this year as Time Warner does on HBO.
We will see new marketing leaders, who will be aspiring CEO’s modeled more on market savants like Mark Zuckerburg with a focus on products and user experience and how technology works and less on business school-trained marketers like Steve Ballmer, whose expertise is in channel sales, old style brand management and managing technologists. These new leaders will in many cases design the technologies themselves.
Companies could dominate markets in the ’80’s, ’90’s and ’00’s with second class marketing and world class distribution deals and financial leverage, pushing and promoting their products through those captive channels. The new marketing world will be run by digital technology and digital natives with a maniacal focus on acquiring users and creating consumers. The only businesses that win will be those that make marketing skills and new marketing people the center of their companies.
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