There are now more than 3.6 billion internet users globally, equating to almost 50% of the world’s population. These users are always on, increasingly mobile, and most importantly, they’re constantly connected.
And this constant connectivity has given rise to a whole new economy, a digital economy, where traditional business models and ways of working have been turned on their head, where digital-first brands are disrupting established categories and where consumers now have impossibly high expectations of products and brands.
Research from MIT Sloan indicates that businesses who invest in digital transformation are 26% more profitable than industry peers. But delivering digital transformation can be challenging.
iProspect asked 120 global clients their views of the digital economy and the challenges they face, as they seek to grow and scale their business. Here’s a look at three key challenges that marketers should be focused on for the year ahead.
1. Data driven decision making
Future-gazers have emphasised the importance of data for a number of years and we expect 2017 to be no different.
“Not all data is created equal” is a tired mantra but one marketers forget at their peril. Data inspired decision making relies on more than data collection – the most successful brands will focus on those data sets that add value rather than volume.
This year, brands will move from data collection to data strategy. This means identifying quantifiable use cases, an unflinchingly honest assessment of the quality of data in the organisation, and investment in the tools and processes that surface and continuously improve data sets.
A best-in-class data strategy will recognise that there is no single data source that can answer every question. Brands will therefore increasingly invest time and effort in building their single customer view. Data and infrastructure will be owned by the brand, forming a holistic view of the customer for the entire organisation from marketing to product to finance.
Increasingly, targeted content is an important part of the data challenge for many brands. Creating and tracking bespoke content that meets a specific consumer need allows brands a new way to directly capture data on potential consumer behaviours and to harness that data in future communications. More brands will look at content not just as a means of fulfilling a specific consumer need, but also a means of generating additional first-party data.
2. Expectation economy
Today the consumer defines what a brands stands for, not the brand itself. This has created a new form of competition, where brands no longer just compete within their category, but against all other brands in a constant battle to provide the best of the best in product and service.
This in turn has created the expectation economy, where it has become almost impossible for brands to meet the high expectations of consumers. Brands will increasingly need to use their communications to build strong relationships with consumers, create enhanced experiences that add value, and remove friction from every stage of the consumer journey.
In 2017 we can expect to see further advances in our ability to more easily connect consumers across media channels. With more than 70% of consumers in developed markets accessing the internet with more than one device, we can expect to see greater focus on making cross-device tracking a reality for communications.
3. Organisational agility
As a result of a constantly connected consumer, one of the key aspects of the digital economy is constant change.
A recent Boston Consulting Group study found that companies termed “Digital Leaders”, irrespective of business industry, are more prosperous and more attractive for both customers and employees.
It can be hard for legacy businesses with traditional, long-standing structures and processes to deliver organisational agility. The simplest route is to start by looking at how to reduce complexity within the organisation, simplifying structures and processes, empowering employees and starting to create a test and learn environment focuses on delivering agility.
A practical example for marketers is automation as a means of reducing overall process inefficiency, such as investing in a single platform to manage all content across blogs, website, social media and newsletters. The key is being able to isolate those areas where processes can easily be streamlined or automated.
It is clear that there are a number of key challenges that face brands if they are to grow in the digital economy, but the upside is huge for those who get it right.
As the pace of the digital economy accelerates, the brands that win will be those that embrace the challenges, adapting quickly and organising for future success.
Read iProspect’s 2017 Future Focus report in full here.
By Dan Kalinski, CEO of digital performance agency iProspect Australia & New Zealand