Brands and Agencies Need a Digital Transformation to Compete in the Experience Economy

contributed by: Brian Solis for AdvertisingAge

Disruption in advertising and marketing is at an all-time high. With ad blocking, ad fraud, mobilegeddon, messaging, chat bots, app overload, fragmented attention spans, et al., all the talk about the end of advertising as we knew it isn’t just happening — it’s already happened. But is it really so bad that the landscape is changing? Or is this really an opportunity for brands and agencies to not only reinvent the future of advertising but also drive innovation in how to foster more meaningful customer engagement, experiences and relationships?

There’s no doubt that new technologies and their impact on business, consumer behavior and influence only accelerates what I call digital Darwinism. But complaining, panicking or romancing over the nostalgia of yesteryear isn’t going to produce the insights and expertise necessary to blaze new trails. At the same time, jumping on every new trend and investing in the latest apps or networks is only going to prevent us from seeing the real reasons (and people) that are causing digital Darwinism.

Over the last 20 years, I’ve studied disruptive technology on business and society. There’s a reason why advertising and marketing in general is disrupted. Your customers are more connected than ever before. And as a result, they’re more informed, empowered, demanding and discerning. Their expectations, preferences and even values are shifting. They’re becoming digital narcissists who have far more experience and ingenuity when it comes to using new technology to communicate, discover and share. This consumer shift is outpacing innovation in the marketing industry and business overall.

If you’ve paid any attention to Google’s drumbeating on micro-moments over the last year, you are more than familiar with the fact that your market of digital narcissists is only going to become more elusive. At the heart of this is mobile and how it’s redefining engagement, communication, relevance and actions. Micro-moments happen when a customer demonstrates intent by reaching for his or her phone to act on a need in real time. They unfold through a variety of common “I want” scenarios that help people take steps or make decisions as to what to buy, do, know, etc.

This new activity is unraveling everything we know about customer journeys and brand relevance. In fact, in its research, Google learned that 90% of smartphone users are not absolutely certain of the specific brand they want to buy when they begin looking for information online. And 73% say getting useful information from a business is the most important attribute when selecting a brand. This is game changing for brands and marketers. Add to this, study after study show that consumers increasingly want to spend money on experiences not stuff.

Adobe Systems goes so far to claim that experiences represent the”third wave” of enterprise software disruption. The first wave was enterprise resource planning (ERP), which transformed back-office operations. Next was customer relationship management (CRM), which changed the front office. The third wave is “experience business,” which is set to reinvent how companies create, deliver and market products and services.

Digital transformation: Welcome to the experience economy

To compete in an experience economy, to engage people on their favorite devices and deliver engagement and experiences that are compelling, culturally and personally relevant and useful, brands need to start with a new perspective before implementing new technology. Brands and agencies can learn by borrowing from the playbook of digital transformation, one of the most important trends in business that’s shaping how companies work, market and innovate.

Contrary to its name, digital transformation is not a technology-first or exclusive approach to change. In my research, I define it as the realignment of, or new investment in, technology, business models, and processes to drive new value for customers and employees to more effectively compete in an ever-changing digital economy.

Over the last three years, I’ve studied the maturity paths of some of the world’s leading brands including Dell, Discover, GM, Harvard, Lego, Metropolitan Museum of Art, Nestlé, Novartis, Sephora, Starbucks, Target, among many others. The result is a new report, which introduces a maturity framework that documents how companies are advancing technology roadmaps, business models and processes to compete in the digital economy. I believe this same model can make advertising and brands more relevant in this era of digital Darwinism.

Without changing our perspective, we cannot change our approach. If we don’t change our approach, we cannot change our results. As Albert Einstein famously said, “We cannot solve our problems with the same thinking we used when we created them.”

The future of advertising and brand starts with earning relevance. Relevance signifies that you are closely connected to something or someone. Before you can compete for relevance, before you can change marketing and advertising, you have to understand how someone else defines and measures relevance. This is why you can learn from the digital transformation efforts that are changing business.

Your work, in all you do, must close the gap that exists between the value you offer and the way others interpret (and appreciate) value.