Digital has been disrupting advertising for some time – sparking rumours that advertising as we know it is dead. Yet in spite of these claims, it persists stronger than ever.
Crucially, what is changing though is the share of the overall advertising spend assigned to digital; it is increasing. In 2015, digital is set to account for 50% of all UK media spend. So how is digital disrupting business today, and what are clients and agencies to do about it?
Your business model is being redesigned
If your business is being disrupted by a new breed of competitor, then you will need more than just good advertising or PR to address the situation. If your products have become redundant (e.g. film processing, DVD rentals) or services are being modernised by new market entrants (e.g. the taxi business), reinvention will be needed.
A Chief Digital Officer (CDO) may be just what the doctor ordered. Introducing this role into your business is one way disrupted companies are trying to recover and adapt. McKinsey’s latest report on the subject, provides guidance to help you decide if you need one. However, the level of disruption in many businesses is far too complex for a single individual to manage. A digitally savvy workforce and integrated business strategy will also be required.
Study your competition closely – just be aware that they may not be the usual suspects. If they are taking business away from you, they will give you clues as to the best way forward. Look at their online and offline initiatives. Start taking corrective action now. Invest sufficient time in R&D to ensure your business is future-proofed (Google famously allocate 20%) and strongly consider co-created service design collaborating with your customers and partners.
Agencies are not immune. For an excellent analysis, read the Agency of the Future report by Adobe and Econsultancy. Given that customer experience is at the heart of digital transformation, we may see the rise of a new breed of full service agency which connects the back office with the front end or experience layer. All of this change is down to the fundamental shift in power that we owe to the inherent nature the internet. The genie is out of the bottle and it is not going back.