In the Spring 2009 issue of strategy+business, Christopher Vollmer writes a piece that every Brand Manager, Advertising Agency and media company should take notice of.  Entitled Digital Darwinism, the article looks at how “in the new marketing and media ecosystem, some will fail, some will thrive, and all will have to evolve.”

As a partner at Booz & Company and lead of the firm’s U.S. media and entertainment team, Christopher Vollmer knows a thing or two about this changing marketing ecosystem.  In fact, his recent book Always On: Advertising, Marketing, and Media in an Era of Consumer Control, explores that very subject.  In my eyes, those are good reasons we should all be listening when Vollmer gives this call to action for the industry:

Digital platforms and capabilities are transforming the ways in which consumers experience advertising …It is a dynamic, complex, and interconnected community in which marketers, advertising agencies, and media companies depend on one another, to a certain extent, to survive and thrive. But it is also a brutal, competitive arena, where a kind of “digital Darwinism,” or survival of the fittest, holds sway, rapidly distinguishing winners from losers. Companies that possess certain preferred traits in their organizational DNA or that have superior skills of self-adaptation are positioned to flourish in this ecosystem.  Those without either face almost certain extinction.

To make his point, Vollmer starts with a case study about how Hewlett-Packard has been able to gain the upper-hand on Dell. In particular, Vollmer focuses on how “HP stopped engaging Dell Inc. in a price war it could never win and changed the terms of the PC marketing debate: Your personal computer is not a bargain, it’s your autobiography, and it matters that it’s an HP.”  They accomplished this by embracing Digital Darwinism with moves such as:

  • The company has dedicated 50 percent their marketing budget to digital media — compared with an average among national advertisers of 5 to 10 percent.
  • HP has turned the brand over to consumers, such as a 2007 online contest to design the skin of HP’s new special-edition entertainment laptop.  In that contest alone, HP received more than 8,500 entries from 112 countries in just over a month. The contest site got more than 5 million hits, prompting HP to re-forecast sales to five times its original estimate.
  • HP is also trying out new models for its relationships with agencies and media partners, including pilots that bypass agencies and work directly with media companies.

These efforts are best described by Mike Mendenhall, HP’s Chief Marketing Officer:

As marketers, we have an opportunity and a responsibility to drive change within our companies, because all public touch points — increasingly digital — now impact our brand and our revenue. Brands aren’t defined by campaigns anymore, but by the consumer ecosystems we nurture to support them.

Vollmer proceeds to describe how all companies in the Marketing Ecosystem must change in this time of Digital Darwinism.  To support his point, he includes some interesting facts & figures that really caught my attention:

  • Whereas newspapers took 127 years to reach US$20 billion in ad revenues in the U.S., and cable television took 25 years, online media have garnered that amount in just 13 years.
  • 88 percent of marketers expect to spend more on digital ads, and 82 percent believe insights into consumers’ digital behavior and related targeting tools will only become more important.  Yet only about one-quarter of marketers regard themselves as digitally savvy, and half claim they lack the support at senior levels to substantially increase the marketing dollars allocated to digital media.
  • 42 percent of national advertisers have set up in-house ad agencies, according to a recent ANA survey.

There are also 5 behaviors that all players in the Marketing ecosystem must follow in order to thrive and survive in this time of Digital Darwinism:

  1. Turn consumers into “prosumers”: Brand evangelists, equipped with the right tools and motivation to extol brands to family, friends, and casual acquaintances, can be core elements in a campaign.  Marketers have extensive experience observing consumers at the retail shelf, but they are still trying to identify the equivalent “moment of truth” on the Internet.
  2. Build bilateral brand experiences: Brands today must go beyond simply broadcasting their message; they must beckon the consumer into a conversation. When consumers use digital media to search, shop, blog, socialize, or seek entertainment, their actions create opportunities for marketers not only to gain insight but also to gather ideas to improve their brands, marketing messages, and media mix choices.
  3. Place context on par with content: The distribution of marketingmessages—their timing, context, and relevance — is becoming as important as their creative execution in today’s ecosystem.
  4. Master the new calculus of communication: The lack of reliable and standard metrics is the principal impediment to the entire ecosystem’s transition to a new marketing and media model. More standard metrics would give marketers and their partners permission to move beyond experimental spending and toward lasting innovation and change.
  5. Collaboration is king: Marketers, ad agencies, and media companies need to partner in conceiving, executing, and monitoring winning marketing strategies.

While these 5 behavior changes are vital in the age of Digital Darwinism, Vollmer makes one point that I think is particularly important for all Brand Managers, especially those that are not yet fully embracing digital.  He writes that:

The marketing function, equipped to broadcast brand messages to consumers, has now become a center for dialogue, geared to gleaning what consumers want, and when and where they want it. Advertising has evolved from an interruption— grabbing attention for a product or brand— into an experience, an application, a service that the consumer actually wants. This new marketing model doesn’t shout; it listens and learns. And relevance, interactivity, and accountability are its essential ingredients.

Is your company ready for this change?

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This entry was posted on Tuesday, March 3rd, 2009 at 10:04 am and is filed under Brand Management, Digital Marketing, Thought Provoking. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.