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OnBrand Magazine just released its State of Branding Report 2017 (which you can dig into here), and the results suggest that resistance to change is still keeping organizations – yes, even Marketing departments, Marketing firms, and ad agencies – well behind the technology adoption curve, even at a time when companies should be prioritizing technology adoption.
When I first thumbed through this data, I have to admit that I was disappointed and annoyed. I still am. Here’s why:
- 65% of marketers aren’t planning to invest in critical digital technologies like 360-degree video, AR/VR, beacons, or even chatbots in 2017.
- 93% of marketers don’t plan to invest in AR (augmented reality) in 2017.
- 91% don’t plan to invest in chatbots.
- 81% don’t plan to invest in 360-degree video.
- 55% don’t plan to invest in customer experience tools.
- Branding and marketing automation? About 50%.
- 67% of marketers don’t use big data to create personalized, human interactions with customers.
- 65% of marketers still don’t design for Mobile First.
Those numbers are pretty horrible, especially for marketers (who should arguably be ahead of the curve in regards to new tech adoption), but… if you flip them upside down, you get this:
- 35% of marketers are planning to invest in critical new digital technologies like 360-degree video, AR/VR, beacons, and chatbots.
- 7% of marketers will invest in AR in 2017.
- 9% of marketers will invest in chatbots in 2017.
- 19% or marketers will invest in 360-degree video in 2017.
- 45% will invest in customer experience tools.
- 33% of marketers are leveraging big data to create personalized and human experiences for their customers in 2017.
- 35% of marketers are designing for Mobile First in 2017.
That’s a much more productive way of looking at these numbers, and it identifies traits we like to see in marketing departments, firms, and agencies: an eye for cutting-edge tech, a leadership mindset, and a culture of experimentation and innovation. If we were looking for a marketing partner, or if we were tasked with getting a marketing department caught up in regards to digital transformation and technological disruption, these are the traits and markers we would be looking for.
So our advice is simple:
1. Buck the trend.
Go with the second, smaller group – the one that is actively investing in new technologies and taking a leadership role in its industry. (That’s also the group that isn’t confused about the importance of designing for Mobile First, by the way.) We like that smaller and far more dynamic group because it is moving at the speed of change, and that matters more today than it has at any other time in our lifetimes. Marketers that resist change, that aren’t currently investing in technology and medium experimentation, cannot hope to remain competitive against marketers who are already twelve, twenty-four, even thirty-six months ahead in regards to both technology adoption and digital literacy. Inside of six months, campaign ROI won’t even be comparable (if that isn’t the case already). There’s no safety in numbers here. It isn’t that kind of dynamic.
2. Build the business you want to be running in 5 years, or someone else will.
65% of marketers are still operating as if it were 2008. How do you think that happened? More to the point, how do you think that’s going to work out for them on the back side of 2020? Get out of that model now. Right now. If you have to do it one technology at a time, do that. Use the data already presented here as your first draft road map: Jump into the 45% who will invest in customer experience tools. Then work your way up to the 35% group. Next, shoot to get into the top 9% of marketing organizations who will be leveraging chatbots to improve their outcomes in 2017, and then the top 7% who will be using AR in their campaigns and programs this year as well. Keep going until you’re part of whatever the 1% group is doing.
To illustrate the problem with stalled marketers look at what the data shoes us:
24% of marketers agree that VR is going to be the most significant marketing technology in the next five years. We can safely assume that a much greater number believes it will will be significant, even if it isn’t the most significant). So why are only 14% investing in VR capabilities? Why the gap?
Same with AR: 17% of marketers put AR as the most significant marketing technology of the next five years, but only 4% are investing in AR capabilities. What is the disconnect?
Given the gap between seeing what is coming, and doing nothing about it, I have to ask: are these marketers planning on retiring in the next couple of years, or are they deliberately trying to make their organizations irrelevant by 2020? Or are they just stuck and don’t know how to get unstuck?
3. No risk, no reward: You cannot hide from this.
Is there risk in investing resources in experimental or otherwise “unproven” technologies? Yes. And as a decision-maker, it’s your job to manage that risk. No one here is suggesting that you jump into new technologies fearlessly and with both feet. Don’t overdo it. Start small, but start fast. Build small pilot programs; set up low cost experiments; prioritize low cost and low revenue but high ROI market tests. Learn to experiment again. Learn to be the kind of organization that tests, learns, improves, then use that process as a platform for innovation. “Safe” doesn’t win in Marketing. “Safe” isn’t how you stand out from the herd, or catch anyone’s eye, or get anyone to care. You always have to risk something to make someone care. In Marketing, no risk = no reward. Don’t be irresponsible about your Marketing Tech investments, but don’t make the mistake of hoping that you can afford to pretend they aren’t necessary.
4. Put your business hat on and start thinking about opportunity cost.
If you aren’t familiar with the term, opportunity cost, it is essentially the cost of not having done the other thing, or the cost of a lost opportunity. Say that you are confronted with three possible courses of action: Choice A, Choice B, and Choice C. And say that you choose A. Opportunity Cost would refer to the loss of whatever gain you might have seen from choosing B or C instead of A.
Example: What would be the opportunity cost of having bought a brand new BMW 320i in 1980 vs putting that money into Apple stock?
There are two ways of inserting opportunity cost thinking into the risk/reward equation we just went over:
The first is to look at budgets and resources, and consider the opportunity cost of investing $x into, say, chatbots or 360-degree video instead of using that $x to fund whatever you funded with it this time last year. What do you have to give up to be able to do this? (Answer: Scrap what doesn’t work anymore. Replace the consistently lowest performing programs and tools with something that works better or something that has the potential to work better.)
The second is to look at the opportunity cost of doing nothing, of changing nothing, of not experimenting with new models, new channels, new technologies, and new ideas. In 1980, the BMW 320i was the sure deal. Apple stock was the unknown. Let’s do some quick OC math:
- Choice A: Spending $12,000 on the BMW.
- Choice B: Keeping your old car and putting that $12,000 into Apple stock at $22 per share.
(For the sake of simplicity, we’ll pretend that maintenance and repair costs on a BMW aren’t part of this equation, and that the car still works great.) Fast forward to 2017. Let’s look at the current value of A and B:
- Choice A – $12K 1980 BMW 320i current investment value: About $6,000 if in good condition.
- Choice B – $12K in 1980 Apple stock (IPO price: $22) current investment value: Over $4.2 million.*
* Due to Apple’s stock splits over the years. 1 share in 1980 = over 50 shares today. (If that hadn’t happened, you would be looking at $76K, which would still be considerably better than $6K.)
This concludes our lesson in opportunity cost thinking.
The point is this: Don’t make the mistake of not considering the value of a new technology, model, process, or idea just because it is still unknown. Not all bets will pay out, but some will. Six months from now, two years from now, ten years from now, don’t be the decision-maker who ends up wishing he or she had invested into what was next instead of what was now. Build financial models. Play with performance forecasts. Visualize and quantify what happens if you choose A, B, or C. And if you can’t, or don’t know how, hire someone who can help you do it. Don’t just sit on your hands and hope that what was cool in 1980 will still be cool in 2017 – or rather, that 2010 thinking will still do the job in 2020, when hungrier, smarter, more effective upstarts are getting 10x your results at a fraction of your costs. The opportunity cost of doing nothing, or of waiting to do something (which is the same thing), isn’t just that you will be left behind. It can be measured in hard dollars – lots of them – and should be.
5. When in doubt, decide with purpose.
I don’t want to wander off into Social Media ROI territory, but I have to bring up something I touched on when I wrote it: When in doubt about a business investment, forget about the long-term potential you think that investment carries with it, and focus instead on how it solves an immediate problem. That is especially important when you have to explain the value of that investment to a CEO, or a board of directors, or a client, and don’t want to wait a year to get approval. Fact: They may not see what you see, or share the same faith in a technology, model, process or idea, so don’t put your eggs in that basket. They will understand a simple problem/solution equation though, so take that approach instead: What pressing problem will this tech or idea solve today? What’s the ROI of it this month? This quarter? This year?
Here’s an example: Why do most Marketers still hesitate to invest in 360-degree video and AR, even when YouTube and Facebook are investing heavily in those techs, and every smartphone brand on the planet is putting AR and 360-degree video into their products? Because they haven’t seriously considered what problems they solve for their company or their clients, that’s why. They are looking at it as a technology, as a “will this still be hot next year?” question, not a tool that solves a specific problem today.
Let’s quickly run through a list of ways 360-video and AR can help improve outcomes for a number of industries and verticals right now:
- Automotive retail: virtual showrooming and creating virtual driving experiences = accelerated sales cycle + increase conversions.
- Hotels and Airbnb: virtual tours = increase the likelihood of a booking.
- Tourism: Limited pre-tours = increase the likelihood of a booking. Secondary revenue: virtual tours (basic and premium models).
- Education: remote learning + enhanced learning = Improved educational outcomes + increased revenue from digital services.
- Online retail: enhanced shopping experience (photorealistic 360-degree product virtualization) = increase likelihood of a sale.
- Healthcare: Virtual facilities tours for inpatient services = improved experience and increase positive word-of-mouth. Diagnostic virtualization and immersive treatment simulation videos = improve patient confidence in a treatment option.
- Employee training: 360-degree videos = accelerated facilities tours and process-focused training. AR = reduce incidence of workplace accidents, and reduce quality control issues in product manufacturing.
- Sports entertainment: premium immersive audience experiences = increase share of audience and generate additional digital revenue.
You get the idea: AR, 360-degree video, VR, chatbots, AI, IoT… aside from everything else these technologies bring to the table, they all solve immediate problems, and can be leveraged today to reduce costs, increase revenue, and improve outcomes. If the long term value of a technology investment is too nebulous for you or your organization, focus on the immediate value of that investment, and start working on pilots to not only test but prove their value while minimizing the risk to your organization’s budgets, effective programs, and overall reputation.
Get unstuck. Now. Don’t be afraid to use new tools to drive your business forward again. There’s no safety in getting left behind. No industry will wait for laggards to catch up. Operating as if the world of five years ago will still be the world of five years from now is simply not sound business thinking, especially when access to these technologies is so readily available to a new generation of digitally savvy, clever, and innovative marketers who will make full use of them. And right now, the fact that most marketers are still on the fence about getting into these new channels, technologies and models means that the window of opportunity for aggressive, forward-thinking, creative, and outcome-focused marketers to surge ahead of their competition is wide open. Don’t let an opportunity like that pass you by.
And while you’re here, you may want to download a few of our reports that touch on this subject (free to download for a short time, so click on them now). They will help you dig a little deeper into some of the topics we covered today: