Disruption in branding industry due to digitization

Over a couple of decades ago, I used to wonder what would be the future of advertising industry. Having been involved in technology industry from building strategy to building delivery capabilities, the future always was an important part of our thought process. The ability to predict future and build capabilities in those selected areas is the one that separates leaders from laggards. So a good portion of my time as a person heading global operations of large IT verticals including Telecommunications, Media and Entertainment would go in visualizing future. Luckily all the technology food chain verticals (Telecommunications, Computing and Networking Infrastructure, Media, Entertainment and Semiconductors) were part of my group that gave me an added advantage of looking at all these in an integrated manner.

The technology was fast evolving, internet speeds were increasing, the computing and networking devices were getting smaller and more powerful and the telephony was moving from circuit switching to packet switching. The overall landscape was constantly changing and these would surely have an impact on advertising industry as well. Basically the channels of reach to the consumer were changing and hence would the delivery and content. What we called the arrival of triple play (data, voice and video on a single channel) during those days was a reality unfolding in front us. So the first question that came to my mind was as to how would it change the advertising scenario.

While sitting in front of a Television, one would be bombarded with advertisements that were of no interest to the person. I particularly, would change the channel and comeback around the time advertisement would finish, that is a different talent altogether to make it just in time when your favorite show returns after an ad break. So it would seem to me that the advertiser was wasting money putting it there thinking that people are watching and hoping that some of the viewers would get the message that the product manufacturer wanted to convey as he had no other choice other than doing this. It meant a huge amount of wastage of media time and also the consumer time with the mismatch of the consumer need/wants versus the product being advertised. The consumer would be bombarded with the advertisement of a product that he had no interest in, and this could sometimes work in contrary to the goal of pushing the advertisement itself. Why would a slum dweller fighting to make his ends meet be bothered about a luxury car advertisement and also vice versa, a wealthy person be interested in a cheap dish washing soap. So in short, this meant very low effectiveness of the money spent by the product company for converting into sales. In fact there was no direct way of knowing the effectiveness of the campaign, since one could not directly correlate the sales growth or otherwise to a particular campaign, per se.

So with the advent of triple play, some possibilities arose that can make it a little more efficient. I thought now targeted advertising would be possible as somewhere in the system a server can be placed that will keep the preferences or a profile of a person that could be built by studying the user behavior through various known techniques including Artificial Intelligence. And based on that profile, an advertisement can be inserted for him specially that could be of his interest. This would achieve manifold benefit to all the stake holders. An advertiser would have to pay lesser as the same media time could be shared with various advertisers based on the user profiles, and the audience he reaches is probably more suited to the kind of consumers he is targeting. The media house would benefit by giving the same slot to various advertisers and hence a larger revenue pool. And finally the consumer that is consuming the advertisement is getting something that is of his interest and/or suited to his profile. So I had called it moving away from a broadcast mode to unicast mode as compared to what was happening from earlier times. As the strategy experts would call it, it would be a “bang for a buck” model, wherein all the stakeholders would get benefited substantially by it.

Only thing constant in this world is change, it is more so true for the technology landscape. The pace of change in technology is much faster than our changing patterns of adoption. May be we are stretching the Darwinian theory of gradual evolution to its limits, or has it already been disproved. The last decade saw the rise of social media, it was largely driven because of four important developments taking place, firstly the massive penetration of internet across the globe, secondly the prices of data usage falling drastically and thirdly the prices of mobile devices getting cheaper and lastly devices becoming smarter. What social media has done is that it has broken down the barriers between the news maker and a news consumer, it has made every individual a product creator in his own right, no longer are ivy league degrees required to voice your opinion and be heard, there is an audience for anybody and everybody. A simple message or a video can get viral and reach millions of viewers in minutes. So the rules of engagement have changed, there are platforms of reaching the consumers directly without the restrictions of availability of media time and the channel of delivery.

So this obviously means there is disruption in the way the advertising and communication of a brand is produced and delivered. The brand is no more a preserve of a few brand experts or strategists, the changes in the technology and rise of social media has made it imperative for a brand to be interactive. The consumer wants to be feeling the brand, wants it responsive to his concerns, wants it to spell its value directly to him. Therefore it is extremely important for the branding specialists to be cognizant of this new change that is happening in the real time. Hence it is an important factor that needs to be kept in mind while building the strategy, plans and most importantly, the content.

This new dimension calls for the very change in the persona of branding itself, the faculties that were far removed from each other and that would have only set defined interfaces between them have to merge in a harmonious symphony. The Creativity, Strategy and Technology have to be one unified whole for the deliverance of this new paradigm. It is adopt or diminish. Even if one has predicted the future to a fair degree of accuracy, it is only the ones that adopt quickly and effectively actually survive and thrive. The more nimble you are, the more chances there are that you can adopt at the pace demanded by this changing paradigm.

Does that means that a lot of large monoliths in this industry will falter and crumble in the coming days? Well, only time will tell!