We’re barely into 2014 and already the biggest digital disruptors are either flexing their muscles anew or apparently getting ready. Google acquired Nest for $3.2 billion, Apple said it has nearly $160 billion in the bank, Amazon is reportedly close to shipping a set-top box for your TV, Microsoft has sold millions of its Xbox One game consoles and Facebook followed its announcement of a record quarter by spending billions to acquire WhatsApp.
It’s an intensifying battle of mythical proportions, and to faraway marketers and product managers in non-digital industries like banking, pharmaceutical or consumer packaged goods, it may seem not worth much thought – because there’s little they can do about it.
True, you can’t affect how the battle proceeds. But marketers of every kind will have to care dramatically about the outcome of these battles, because these giant digital platforms are fighting to define the very nature of audience itself. Thanks to digital disruption, audience will soon no longer matter.
In the traditional audience aggregation model, marketers maintained a kind of long-distance, hands-off relationship with consumers. A brand relationship, it was often called. Now that digital disruption has arrived, these marketers are increasingly waking up to find that they can choose to have a direct relationship with their end customers.
It’s a bit disconcerting at first. Why would people want to have a relationship with a toothbrush manufacturer, for example? They wouldn’t, and therein lies the problem for the toothbrush manufacturer. But Amazon would happily have a relationship with a toothbrush user, slotting in whatever toothbrush it can reliably deliver — enrobing it in a Bluetooth-enabled Kindle Toothbrush Sleeve – and forever relegating the manufacturer to low-company-on-your-totem-pole status.
Recognition that it’s time to build a direct digital relationship will land on most marketers at about the same time that they realize that the aforementioned digital platforms – Amazon, Apple, Facebook, Google, and Microsoft – are in a much better position to have a deeper, more persistent relationship with the customer. And these marketers won’t know what to do about it. Because these digital giants, while enablers of digital disruption for even the smallest developers, are also the replacement for the old media model.
You will soon no longer turn to NBC or Nickelodeon to access your customers in an indirect, impersonal way; you will instead deliver measurable software experiences directly to your customers through Android or Facebook Mobile. The disruption giants will let you do your best to satisfy the customer, and they will take a nice percentage of every gain you make. If you refuse to play, they won’t care, because there are a dozen other companies eager to provide essentially the same service to their platform users. This is how Amazon’s merchant program works, it’s how the iOS App Store works, it’s how the future will work.
True, one of the first effects of digital was disintermediation. Now that digital is replacing audience aggregation with digital customer-relationship building, it’s the reintermediation that will make things challenging. To stay ahead of it, you need to anticipate just how these digital platforms will grow their influence by adding touch points in the lives of their users – your customers.
Smart marketers will be wary of the platforms’ ambitions, but they’ll also be smart about being the first to exploit some of these new offerings. When Microsoft’s Cortana voice interface finally emerges from rumor to become a kind of personal assistant, for example, the smartest marketers will be those that have pre-integrated with Cortana so that a search for information about their category is answered with a smooth handoff from Cortana to anything from Weather Underground to Airbnb to the inventory of the Target store nearest you.
Adapting quickly to the life management tools that giant digital disruptors will build in 2014, and beyond, will require an agile approach to product management and software development. It will require significant executive support and, yes, some budget. In short, it will require that companies sign up for digital disruption, shifting away from the ad model that has for so long provided such comfort and stability. A model that will no longer matter once you know your customers by name and have learned how to exploit digital platforms to reach them.