bizEDGE NZ - Four forces shaking up marketing right now


Four forces shaking up marketing right now

Article by Martin Kihn, Gartner research analyst

Having circled through the Krux “Data Matters” conference in Las Vegas, we’ve been pondering the fundamental forces at work in marketing tech and ad tech today. Here’s a DMP who’s reinventing itself as an Intelligent Marketing Hub; and elsewhere, there are walls going up and heated hashtags abubbling.

Four things seem to be roiling.

(1) GAFA: Google, Apple, Facebook. Amazon. These are four of the ten biggest companies on earth by market cap. Two of them rely almost entirely on advertising revenue. The third (Amazon) has a growing and we think lucrative ad-selling business. And the fourth (Apple) is quite disruptive to the whole scene. It is a hardware and software company, doesn’t need ads, and shows it.

What do they have in common? First, they’re in our lives. Facebook has over one billion monthly active users. Apple invented the modern smartphone. Google really does organise the world’s information.

More important, they have identity. All four have a large number of authenticated, cross-device, cross-platform actual personal identities tied to very interesting information. Amazon knows what you buy. Google knows what you want to know. Facebook knows where you live. Apple knows enough to make the government envious.

Identity is more important than reach, but GAFA has both. Consumers shift to mobile; mobile shifts to apps; app use is focused in 4-5 specific apps, most of which are owned by two companies (Google and Facebook). It’s simple math: ad money goes where the people are. Not good news for companies who are not in GAFA.

(2) Ungrateful consumers: They’re all around us. Look in the mirror. What’s the evidence? During our keynote, my colleague Augie Ray brought up two telling stats from his archive:

  • Consumers using ad blocking software increased 41% last year
  • 56% of heavy U.S. TV watchers skip ads when they can

There’s more, of course, but the message is alarming enough for advertisers that they’re paying — um — whitelisting money to ad blockers at very high rates. There’s some speculation in the industry that remnant overload caused the current block-mania, but I don’t think so. Some of you may remember TV ads in the ’80s and I pose the thought experiment: If you could have blocked those ads, would you? “Bain de Soliel for the Central Bay Tan?” again — anyone? Anyone?

No, the reason people block ads now is because they can. There are two solutions:

  • Make ads content (either as good as content or disguised as content)
  • Make ads non-optional — the technical solution

Advertising is not evil. Anton Chekhov said:

“Advertising is the essence of democracy.”

It is the fuel in the engine of our gross domestic product. Capitalism requires the construction of needs that do not naturally occur. It is a half trillion dollar global business and it will not fail. It will not even shrink much.

The problem is not advertising per se but consumers. They think content should be free. They do not — we do not — see that advertising is a tax we pay for content. Just like our military and our roads, if we don’t have a tax we’ll get what we pay for: mercenaries and dirt trails.

(3) Robo-Rulers: The Rise of the smart machines. Last week, my esteemed colleague Andrew “Frankie” Frank talked about what he calls “Marketing’s Big Switch.” I won’t give the purport away here except to say that he sees smart machines marching into marketing suites rather rapidly, turning over things that marketing already does and making them new.

In particular, he points to three fundamental components of marketing and how machines will switcheroo:

  • Marketing Automation — already being affected by machine learning, with increasingly predictive elements suggesting to marketers what to do next, rather than relying on human-driven rules
  • Customer Experience — moving from a process whereby a customer sorts and weighs messages and other signals to figure out what they want to buy to an automated “proxy web” frontier, where intelligent agents navigate the digital realm on our behalf
  • Point of Purchase — Frank’s sweetest insight lies at the level of the product itself. Smart machines will make it possible to more or less create customer products and services to meet individual needs, creating an object (or service) that will in itself be more likely to move.

(4) Taylor Swift: How she ‘Shakes It Off’ and revolutionises marketing. Everything has changed. I will reveal more about the branding secrets of Ms. Swift and her twinsies like Google and Uber … but not yet. Remember: This is “Our Song.” You’ve got “Style.” And “We Are Never Getting Back Together” … until next time.

Article by Martin Kihn, Gartner research analyst

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