CHAPTER 2
THE DISRUPTIVE CONTINUUM
Perpetual Change
AFTER WEAF’S DISRUPTIVE experiment to make radio profitable, that business model took over media until Yahoo! emerged in 1994, making it evident that a handful of media sources would no longer be feeding people information. Instead, people could search for things based on intent and find an abundance of possibilities, solutions, and answers.
FROM SPACE AND TIME TO USER INTENT TO INTERACTION AND IMMERSION
While the behavior of search engines is indeed different from what mass media have to offer, the advertising models on Yahoo! were still based on the same old premise of space and time, with advertisers bidding for space in special ads appearing above the “organic” results of keyword searches.
Fast-forward to 2007: we were no longer chained to a clunky laptop. Searches went mobile with the advent of the iPhone and iOS operating system. While not the first smartphone on the scene, the iPhone disrupted the marketing landscape by allowing developers to create experiences, solutions, and services for interested customers who used the phone as their primary communications tool. Soon it wasn’t only about searching for information on a mobile device but also about connecting with others on Facebook, Twitter, and LinkedIn. When brands saw this, they began to realize they didn’t have to buy space and time; they could begin to target their messages based on audience data or user intent modeling.
In the course of a hundred years, the world evolved from one of space and time to one of audience and intent. Over the next five years, it will tip toward interaction and immersion, along with customer-designed and customer-created products and the Internet of Things (IoT), the global network of connected physical items such as electronics, software, and sensors. Technology has changed and will continue to change how we evolve in the next hundred years as a result of its effect on human behavior.
While immersion is hardly the last stop on this train, it is the next one that disruptive marketers will have to tackle. And it looks like nothing they’ve experienced in the past ten years. Disruptive marketers are trying to figure out this new landscape in the most organic way possible from a user experience perspective, while conventional marketers continue to pound us with messages we long ago abandoned.
Because the new normal is filled with uncertainty, it requires the disruptive marketing mindset to be constantly curious rather than to settle for the data it has. And Tinder’s “Ava” campaign is a perfect blueprint. Most likely it was seen neither as a success nor as a failure, but simply as a way to inform future promotions and engagement for the film industry. Conventional marketing mindsets have start-and-stop periods in which the campaign runs from one set date to another. But the digital world has no off switch. At any given moment, somewhere in the world, someone is interested in an immersive state.
Disruptive marketers never rest on their laurels. Data is being generated all the time. So how does one use it to gain a competitive advantage?
Data and Disruption: The Competitive Edge
In the early 1990s, the main player in search engines was Yahoo!. Yet, as of this writing, it controls only about 13 percent of search results in the United States. What happened?
Yahoo! search had no real algorithm with which to assess the importance of the results served up on the search engine results page (SERP), the page you get when you search using keywords, phrases, or latent natural language such as, “Where is the nearest pizza shop in Park Slope, Brooklyn?”
In a garage in Menlo Park, California, a small company called Google looked at this, and early on began to seek search results that weren’t simply efficient but also disruptive to how Yahoo! and others operated in the space. Using data formulated into an algorithm, Google figured out that users sought a ranking of what was important on the web. This ranking was dubbed “PageRank” (after its creator, Larry Page). PageRank works by counting the number and quality of links to a page to get a rough estimate of how important the website is. The underlying assumption is that the more important a website is, the likelier it is to receive more links from other websites. It’s not the only algorithm Google uses to order search-engine results, but it was Google’s first, and its best known.
Yahoo! had way more resources and staff, but they weren’t thinking about customer experience or user interfaces and design. They simply ran things based on what they thought worked best based on a conventional mindset.
When you think about what will work for your marketing as a business, but you don’t consider the customer or user experience based on the design of your products, services, solutions, design, or messages, you’re simply not going to last long in this new immersive era. Before the information age, it was much more difficult for customers to get information about anything. Information was scarce, and most companies liked it that way. Today that paradigm is inverted. In fact, it is more difficult for companies to hide what customers say—the good or the bad—about their products or services.
In the conventional marketing model, messages are disseminated using a top-down approach by one ownership team (usually a marketer or marketing department) from company to customer.
In disruptive marketing, communications and conversations are disseminated bottom up, top down, side to side, and back to front by many individuals, including people who don’t even work for the company. Sometimes these messages are 100 percent user generated—neither made nor even disseminated by the brand. Owing to the social web, customer-made messages are likely to spread faster than a brand-to-customer approach, thanks to application programming interfaces (APIs).
While many conventional marketers write about the era of digital transformation with blog posts about content, mobile technology, and social media, we will delve into the more important part of how to stay competitive in a world of constant change by focusing on what is key in disruptive marketing. I dub this “The Joy of Next,” a phrase used by psychologist Daniel Gilbert in his book Stumbling on Happiness.
DISRUPTIVE MARKETING: IMAGINE THE FUTURE, THEN MAKE IT HAPPEN
The personality trait of a disruptive marketer is centered on what, according to Daniel Gilbert, is believed to be the brain’s greatest achievement: “its ability to imagine episodes that do not exist in the realm of the real, and it is this ability that allows us to think about the future.”
The ability to imagine a future state is the human brain’s most important attribute. And it’s the thing we need to use more of—ignoring the obvious and conventional—in the world today.
Google’s Eric Schmidt and Jonathan Rosenberg noted one way they ascribe to this “future state” forward-thinking philosophy: people who work at Google don’t fit into silos anymore. That would be too conventional in terms of the twenty-first-century definition of a knowledge worker. According to their book How Google Works,
[Google employees] are multidimensional, usually combining technical depth with business savvy and creative flair. In other words, they are not knowledge workers, at least not in the traditional sense. They are a new kind of animal, a type we call a “smart creative,” and they are the key to achieving success in the Internet Century.
Software at Scale
In 2006, when I was working in the startup world, businesses understood the power of mobile phones, but no one was thinking about how they would be the main conduit for communication in the next decade. The cost of running an operation consisting of marketing clouds, analytical measurement dashboards, programmatic buying modules, social listening tools, APIs, and video-editing suites enabling marketing in real time was non existent. Marketing departments required lots of people at scale to operate.
Today, however, depending on the type of business, departments that once involved hundreds of workers can now be run by five people, or possibly even one person. While analytics have helped reshape marketing, they also have reshaped how we communicate and create.
In his influential 1937 article “The Nature of the Firm,” economist Ronald Coase identified high transaction costs as the reason companies had grown so large. Companies did almost all their work internally because it was too costly to contract out services, supplies, and vending. Today, however, marketing costs have decreased because of the tools available to operate a business. In fact, you may be familiar with this image of the marketing tech landscape: there are so many companies to help with marketing that chiefmartec.com has been producing an infographic annually noting what the marketing technology landscape looks like.
In 2015, there were approximately 1,876 companies representing 43 different marketing technology categories like data visualization, mobile analytics, and collaboration tools, to name a few.
The world is littered with companies (many of which employ only a few people)—ranging from sole proprietorships to Fortune 500s—looking to empower the marketing initiatives of other companies. So, what is the new normal? It’s figuring out the best tools for your business—based on its objectives and operations—to take advantage of this new landscape and differentiate your product by using empathy.
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Disruptive marketing and growth hacking will ultimately replace conventional marketing. #disruptivefm
3:34 AM—29 Feb 2016
How do we deploy these tools? To answer this question, let’s return to Rebecca “Reb” Carlson, who enjoys analyzing how companies strategically align their resources to make an impact.
Enchanted States of Experience
Rebecca Carlson thinks that most brands are still using the conventional approach to marketing, whereby companies develop products and services and then “go to market” with them, hoping that their communication strategies will attract new customers—and in some cases, retain customers. She says,
I’ve been thinking a lot about . . . how data (especially social listening, which I have firsthand experience with) is leveraged—or not leveraged—by marketers. The most disruptive tech out there seems to be done by developers, not brands. Social media and content in my opinion are the most effective ways for brands to personally connect with consumers, but Nike I think is making strides in connecting through data provided by consumers [Nike’s running and training apps, along with their Fuel Band]. An example where data has been intrusive is that classic story about the guy who found out his daughter was pregnant based on the coupons Target sent.
Carlson is skeptical about where the majority of marketing now stands. She adds,
I don’t think many brands are currently leveraging data in disruptive ways. I think there is a bigger interest in quantifying the efforts made through content marketing and visual communication. Image recognition technology is definitely a big focus within social listening platforms; currently engines don’t pick up when someone posts a photo of a Coca-Cola can [and] doesn’t tag it. Being able to collect that data would be invaluable, especially now that communication has become so visual (GIFs, emojis, Snapchats, etc.).
With the advent of personal communications technology (the smartphone), the coming world of connected devices and applications (Internet of Things), and the ability for companies to crowdsource new product ideas, the conventional marketing model is becoming more and more irrelevant. So how does one pivot to relevancy?
CASE IN POINT
Trend Laboratories
The best way into disruptive marketing is not necessarily to tap into more marketing, messaging, advertising, or technology but, rather, to tap into the Zeitgeist of your customers’ emotions. This is easier said than done, because it requires being more human in your approach, less formulaic, and less governed “by the rules.”
Instead of following established rules, disruptive marketers must be aware of what’s on the horizon. For this reason, we need to study emerging trends. They are the best indicators of people’s behavior—and never forget, it’s people who create and drive what’s in front of us.
When I was at a small independent agency named Bond Strategy and Influence (formerly called Electric Artists), the CEO and founder, Marc Schiller, held monthly “Trend Labs” at which he compiled a list of trends he sent quarterly to clients, and those clients welcomed the information because it gave them a competitive and differentiating advantage in the marketplace.
Following Marc’s example, here is a Trend Labs knockoff that you can use as you think about the world of disruptive marketing.
TEN TRENDS ALL MARKETERS SHOULD CONSIDER
1. Mobile will be the dominant platform. Intelligent devices—smartphones, tablets, watches, wearable gadgets, glasses, microchips, HoloLens, and others—will reshape and remix the marketing world. As we shift to a world of intelligent devices, marketing will strike up an even more personalized relationship with customers. Those who can do it faster than their competition will lead in this evolving category.
2. Transparency will be part of all successful business-customer relationships. Customers want more engagement from companies. Companies locked into a conventional broadcast model are failing. By 2020, customers will have an even greater expectation of transparency. Authentic companies, including those that admit their mistakes (a trend called “flawsome”), will be heavily rewarded, as will companies that make social responsibility a main part of their culture. Such actions help them form a connection with their customers.
3. Content is the new currency. In May 2013, I wrote a Fast Company article, “Is Content the New Currency?” explaining that content, especially educational and entertainment content, is a key part of people’s lives that will not change in the foreseeable future. However, because content isn’t static, new forms such as virtual reality, video games, 3D, and 4D are being issued on platforms that include Oculus Rift and Xbox. Soon, the wearable HoloLens will reshape how content is made. This is one area where disruptive marketing can set a new standard for engaging content.
4. User-generated content will be the most disruptive. The power of user-generated content will surpass that of branded content, as brands begin to relinquish control of their own marketing to customers. From online reviews to social media posts and blogs, this means there will be a strong need for brands to create a positive impact in their consumers’ minds. In response to this model of user-generated content production, content co-creation between brands and consumers will become a popular trend.
5. Social networks will become an ecosystem to rival the original Internet. Social networks have the full potential to become not just one of the channels but the channel—possibly another Internet in and of itself. We’re already seeing what we call social, interest, and economic “graphs”—places where people are connected based on a unique commonality. These graphs are growing by leaps and bounds owing to mobile, broadband, and high-quality content on platforms like Facebook, Instagram, Twitter, Tumblr, LinkedIn, Pinterest, and Snapchat.
6. Brands will act as their own multimedia, bypassing press and publishers. By cultivating a brand community and culture with their customers, brands will begin to collaborate with their audiences (as opposed to simply trying to sell to them), creating loyalists and brand advocates. In the future, the seeds of branding and marketing efforts will be rooted in what customers are talking about and making. Customer responses and feelings toward the brand will dictate future product development or enhancement. If the customers are happy, they’ll gladly wear the marketer’s hat and do what is needed to bring the brand to others in their interest or social graphs.
7. Brands that focus on Generation Z will have the advantage. The post-Millennial generation will be even more demanding than its predecessors, and brands will need to acknowledge that. For legacy companies, simply updating older marketing that targeted Millennials won’t be enough. By 2023 there will be a shift. Companies created by Millennials—such as Facebook, Instagram, or Snapchat—may have to pivot their entire product and strategy to survive. Generation Z will demand that companies be in business for something other than pure profit. Capitalism is about to be reshaped, and those who think solely about revenue as a sign of success will be sorely mistaken and rightfully abandoned.
8. Most disruptive marketing will be around products, not service. While service companies aim to create happy customers and look forward to contract renewals or positive social sentiments, product companies thrive on innovation and the future state. What exists in the here and now may be good, but what will exist in the future can and should be vastly improved. So, for marketers of the future, customer satisfaction and retention will not be enough. Innovative products and solutions will create more value for customers.
9. Personalized, data-driven disruptive marketing will become the norm. There is a difference between data-driven disruptive marketing and interruptive marketing. While the former is relationship oriented, whereby content acts as a currency to build trust, the latter is nothing but old-school push messaging in a shiny new digital wrapper. Marketers who focus on building relationships around good products will be rewarded, while fake fast followers with shabby products and poor service will be ostracized.
10. Tracking metrics will be more accurate. Today most businesses measure marketing success by looking at hollow “vanity” metrics such as impressions, likes, shares, or engagement rates. We’re still developing sophisticated means to mine the right data. The future will witness the rise of better analytical tools to help marketers gauge success in terms of emotional and cultural relevance, as well as ROI.
Often it is technology companies that employ disruptive marketing strategies. Computers, phones, apps, and electronic devices or services can be shipped as a minimally viable product, and then be updated regularly while in the possession of their customers. Think of every app you have ever downloaded. What versions are they now on?
As the world shifts to the point where a brick-and-mortar store that sells children’s clothes, or even your local pizza shop, must operate like a technology company, the techniques of disruptive marketing become applicable to every business. (Think I’m kidding? Zeek’s, a local pizza shop in Seattle, has one of the better mobile apps for ordering, delivery, and payment. It also keeps your last order on record so you don’t have to repeat it if, like me, you eat pretty much the same thing every Friday night.)
Four Goals for Disruptive Marketers
So, what goals and objectives should you adopt as you take on disruptive marketing or look to strengthen it within your organization? Here are four that I believe should always be the true north of disruptive marketers:
1. Designing products, services, solutions, or causes that meet the demands of an emerging market. It’s no longer enough just to market products, especially products nobody wants in the first place. Marketers must help in the actual design and user experience, based on their understanding of people’s emotions. This spills into . . .
2. Reshaping or reengineering an existing product, service, solution, or cause so that it meets the demands of customers unsatisfied by current offerings. Many companies give up on customers who don’t like their products. But that attitude could stunt your sustained growth and put you out of business. Sometimes this means blowing up your old products (PowerPoint) for new ones (Sway) that fit the new norm. You do this via . . .
3. Customer-centricity. Every move you make needs to be from the point of view of the customer, even if it might not benefit the company’s bottom line. This is where the art of immersion or enchantment fits in. Customers want to go deep into your world, not simply be told about it. The best way to understand that customer is through . . .
4. Emotional intelligence. The most disruptive marketers combine the concept of design thinking with a radical way of operating—that is, they don’t think of their business simply as a cohort of employees and their target market as a segment of customers. Disruptive marketing blurs that line to the point where customers and employees are one and the same, and they use communication tools to create products in tandem.
That last point is forward thinking. I can’t name one company that has reached that state of nirvana yet. But if we pay more attention to human behavior, design, and psychology than to technology, this is ultimately what customers want and crave, and what disruptive marketing can deliver. A movement like this will ultimately produce some of the most innovative solutions the world has seen. But how do you make that happen?
Through emerging communications. Disruptive marketing won’t work if the entire company isn’t along for the journey. You can’t just have a few people in the marketing department trying to do this. According to a 2014 Gartner report, “Digital business success will require organizations to take bold actions, including inventing new business models and changing the way they function. Gartner predicts that by 2017, 70 percent of successful business models will rely on deliberately unstable processes designed to shift with customers’ needs.”
Resistance to this new way of thinking and acting can be costly. Eighty-nine percent of the companies that were in the Fortune 500 sixty years ago are now gone. That is the force of creative destruction, or apathy about doing things differently, or thinking punk rock about how to shake things up.
Ray Wang, author of Disrupting Digital Business, uses scarier terminology to describe what may happen to companies that don’t adopt disruptive marketing: “Since 2000, 52 percent of the names on the Fortune 500 list are gone, either as a result of mergers, acquisitions or bankruptcies. The changes are the result of digital business models creating disruption in the marketplace.” While about 5 percent of organizations are leaders in proactively transforming their business models to adapt to the latest technologies (Microsoft, Oracle, Apple, Amazon, Facebook, and Uber among them), Wang says about 30 percent of companies are laggards who don’t want to change their business models. “Digital Darwinism is unkind to those who wait. Anybody, even the smallest startup can overtake a large Fortune 500 company because it’s the non-traditional competitors that are creating new customers and new customer classes.” Wang adds that while the average age of a company on the S&P 500 was sixty years old in 1960, it will continue to shrink and be twelve years old by 2020, a compression of five times.
While all of this may appear scary and fill some people with unease, it should make you feel excited. With a new normal comes the potential for new opportunities.