So Long and Thanks for All the Fish

Disney CEO Bob Iger said in The Economist's 'World in 2018' that we now live in a "state of perpetual permutation."  He's right; set it and forget it works for no one.  Speed of thought and execution are everything.  The ability to identify opportunity and leverage it with speed and at scale are the only inoculation against disintermediation.

Our sector is getting a clear message; marketers increasingly operate "zero-based budgeting" (ZBB) policies with a goal to allocate resources in a hierarchy of efficiency.

The only response to ZBB is zero-based planning.  We no longer live in a world of incrementalism, yet need to retain objective balance.  Change but not for the sake of change and the ability to resist leaping at every shiny object and using it as a fig leaf for substantial innovation.  Instead, we need to review opportunity like business people:

• What behavior does the new "thing" enable?
• What behavior might it replace or enhance?
• How quickly might it scale?
• Will sustainable advantage accrue to the first mover or is the fast follower equally well positioned?
• Is it "just" a new marketing channel or is it a new channel to market?

Nowhere is this truer than in our assessment of Google, Facebook, Amazon, Apple, Microsoft, Alibaba and Tencent -- the Seven Sisters of our time (see the oil industry from 1920 to 1970).

Businesses have had hegemonic positions before -- the networks here, the national tabloids in the U.K., Walmart -- but never have they so completely touched consumers and every other enterprise.  Never have the worlds of communication, entertainment, customer service and commerce found themselves with the same protagonists, the same enablers and the same gatekeepers.  Never have companies with an interest in the business of advertising been the richest and most powerful companies in the world.  (Before anyone asks, media was weaponized in 1987 by the FCC's repeal of the "Fairness Doctrine" -- in short, the requirement for news to be honest, fair and balanced.)

It's incumbent on anyone working in the service of brands or businesses or in the creation or distribution of content to make it their priority to observe and understand how these companies work.  Only by doing that can you organize to extract maximum value fromthem and do so without ceding independence to them.   Easier said than done perhaps but there are a few pointers:

• Break down your silos.
• Operate as a portfolio where you can.
• Recognize and exploit the competition between the platforms.
• Lean hard into the parts of their businesses at which they are great and remember they are rarely great at everything.
• Learn from the businesses that they onlyexist because of the behaviors the platforms enable and the friction they remove.

Identifying and playing the best available hand with the big platforms is now the first order of business for many enterprises.

More broadly, of course, technology has transformed every aspect of business.  It has radically altered supply chain management and is now doing the same to the management of demand.  Businesses outside the "native technology" sector need to be agile integrators of systems, with the internal processes required for rapid assessment, deployment and change.  "Set it and forget it" does not work here, either.  The understanding of customers you know and the scaling of that population are central to the creation of data sets that can be activated in market at every stage in the customer journey.

Remember that not all enterprises and the brands they operate are the same.  One-to-one marketing is not an efficient destination for everyone. Often there is efficiency in sufficiency and often growth comes from customers you don't know as well as customers you do.  The best measures of success are not always binary outcomes.  Tantalizing as it may seem the pursuit of perfect correlation of impression to action is not always either efficient or effective.  There is continued significant value in proxy measures such as awareness and preference in the development and preservation of brand equity and as a foundation for activation closer to the point of purchase.  The application of data and addressability at scale to the video market can't come soon enough.  The closure of the "measurement gap" is critical.

Determining the best path for the future demands that advertisers and their agencies identify the real drivers and measures of business success and orchestrate the most effective allocation across brands, categories and channels, optimization within channels and attribution models that are holistic and inform allocation next time around.

Above all we need to plan and innovate in the pursuit of predictable profitable growth.  Predictability increases the value of marketing and the proportion of budget allocated to it, growth increases the value of enterprises, lack of it leads to stagnation.

People who do this best will be the winners.  They will be successful in the short term and the long term, they will innovate with confidence and above all develop products and supporting messaging that maintains relevance as consumer needs change and as those changes iterate.

Perpetual permutation is a thrilling state; avoiding perpetual pandemonium is a challenge for us all.

@robnorman and still rob.norman@groupm.com

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