Marketing and media consultant Greg Satell charts the development of brands against the background of technical innovation
On November 4, 2010, Microsoft launched Kinect, a motion-sensing device for its Xbox video game console. It quickly became the best-selling electronic device in history, selling eight million units in less than two months.
Then something funny happened. Hackers started fooling around with the device, using it to do things Microsoft never intended. This kind of transgression usually results in nasty “cease and desist” letters and hefty barrister fees. Not this time though.
Instead, Microsoft released a software development kit (SDK) to make it easier for outsiders to modify the product and it created an accelerator that offered seed money, office space, mentorship and training to promising young innovators. Clearly, something important has changed. Brands are no longer mere corporate assets, but have become open platforms for collaboration.
After the Second World War, most of the globe went through several decades of seemingly boundless economic expansion. It was also an era of mass media. There were a limited number of TV stations and programming was geared to mass audiences. Popular broadcasts could reach more than 50 per cent of the population, so if you put an ad on the air, you could be pretty sure that you could reach just about everyone with a few spots.
In this environment, the “big idea” was king. Great creative work and mass audiences proved to be a powerful combination. Brands evolved into consumer icons and created enormous profits for the companies that owned them.
Brands are no longer mere corporate assets, but have become open platforms for collaboration
Not surprisingly, corporations became very protective of their brand images, controlling them tightly and guarding them fiercely.
With the Seventies came the Arab oil embargo and difficult economic times. In this environment, financial accountability began to take precedence over big creative ideas. Consequently, marketers started to pay more attention to cost efficiency and cost per gross rating point (GRP) became the coin of the realm.
Then, in the Eighties and Nineties, cable and satellite technology transformed the media landscape and fragmented audiences. No longer could you be sure that your target consumer would see your message. The “big idea” became secondary to effective media selection and targeting.
In the new environment, media agencies prospered and communications planning was born. The central strategic question became: “Where are our consumers and how can we engage them?”
Digital would change the game again, but it wasn’t obvious at first exactly how that would happen. For the first decade of the consumer web, digital media was mainstream media’s poor cousin, offering a fairly lame consumer experience monetised by banner ads that were, at best, ineffective. Marketers watched closely, but mainly kept their budgets in TV.
That started to change in 2005, when News Corporation bought MySpace, the leading site in the exciting new category of social media, which depended on users, not professionals, to produce content. At the time, the $580-million investment seemed like a smart one.
Then came something unexpected. MySpace competitor Facebook made the unusual move of opening up its site to outside developers through application programming interfaces (APIs). They, in turn, built clever new applications to improve the site. With one brilliant stroke, Facebook became more than just a website or even a brand: it became a platform.
By May 2009, Facebook passed MySpace on its way to becoming the most popular site in the world. In 2011, News Corporation sold MySpace for a reported $35 million, an apparent loss of more than 90 per cent of its investment.
When Tim Berners-Lee first developed the World Wide Web in 1989, he conceived it as a vast connection machine that would allow people to communicate on a universal platform. A decade later, he felt he had not gone far enough and so he created a second iteration, which he called the Semantic Web, in order to let machines communicate as well.
Just like his first creation, this new “Web of Things”, is starting to take hold and manifest itself in four new areas that touch consumers’ lives:
Smartphones are at the centre of the web of things. They are not only communication devices, but sensor platforms. In effect, we are using them as universal remote controls for our digital environment;
Smart homes are enabled by new super-efficient chips which are putting connectivity everywhere. Our remotely controlled home appliances will be as much a part of the web of things as our tablets or smartphones;
Smart cars are also becoming an integral part of the new web of things. Ford’s Sync and Toyota’s Entune, which are already installed in production units, connect with both the web and smartphones;
Smart retail, the digitisation of shopping and selling, is probably the most pervasive trend in the retail environment. From in-store apps to recommendation engines, elaborate in-store augmented reality devices and mobile payments, brands are learning how to interface with every aspect of the shopping experience digitally.
This all amounts to a new type of conversation between brands and consumers who are now providing a wealth of information to marketers for free in real time. Their comments on social media can be aggregated and then analysed using sophisticated new natural language processing algorithms.
Marketers must now think way beyond simple response metrics such as GRPs. New platforms, including Innocentive and Kickstarter, are enabling companies to source, test and fund new innovations using the vast collective intelligence in the marketplace.
Brands are no longer images or even ideas: they are platforms. And the most successful ones have open architectures that not only allow, but encourage active consumer participation.
Marketing, media and innovation consultant Greg Satell has worked in international advertising markets, specialising in media buying, brand planning and strategy for digital, print, outdoor and radio ad campaigns; he writes the media, marketing and technology blog DigitalTonto.