Revolutionary Measures

Machine, Platform, Crowds – what it means for marketing

What does the future of business, and by extension the world around us, look like? A recent book by two experts from MIT points to a radically different model that companies need to embrace if they are to survive.machine

Machine, Platform, Crowd: Harnessing our Digital Future by Andrew McAfee and Erik Brynjolfsson focuses on the three emerging trends that are changing how every business operates:

  • Machine – artificial intelligence is replacing the use of the human mind in many areas. While concerns about robots stealing jobs have been raised, this move also brings benefits. Applied correctly, in the right areas, the power of AI far outweighs what the human mind can do, leading to better products and services, better personalised to our needs.
  • Platform – aggregators that own no assets of their own (think Airbnb and Uber), are taking over from those that create products. Essentially they act as gatekeepers, taking a cut of every transaction without physically creating anything themselves.
  • Crowd – ideas and movements now come from the wider crowd, loosely organised, rather than tightly knit internal teams within companies. Wikipedia vs the Encyclopaedia Britannica is the perfect example here.

What does this mean for businesses? Essentially anyone trying to continue as before, or who simply tries to cram these new trends into their existing ways of working is going to fail. The authors give the example of the move from steam to electric power. Those businesses that simply replaced a steam engine with an electric motor quickly found themselves outpaced by those that realised electricity could completely change how a factory operated, enabling innovations such as conveyor belts and assembly lines.

It is also going to mean big changes in marketing, and therefore how marketing agencies (and marketing departments) are structured.

Traditionally agencies have focused on a single marketing discipline – whether it is PR, inbound marketing or SEO. They were built on a pyramid model to maximise efficiency, with lots of junior people doing relatively low value work at the bottom, with strategy coming from higher up. In-house marketing departments were again organised into different disciplines, with many having little cross-over between them.

The trends outlined in the book completely transform this model. Take Machines. You don’t need lots of junior people doing repetitive tasks that can be replaced by automation, and increasingly decisions taken at a middle ranking and senior level will be based on data analysis, rather than gut feel. Whether it is deciding which products to push through online advertising, or which influencers to approach on social media, AI will remove much of the legwork from the process.

Looking at Platforms, that’s where the traditional agency model comes unstuck. Why does a client want to go to multiple different agencies, all with their own specialisms? While the very largest might want the overhead of employing and managing disparate agencies, many more will want to embrace a platform or network model that brings together the skills that are needed, when they are needed, all under the control of one gatekeeper. It won’t matter if people with these skills are contractually employed by that agency or not, it will be more about solving a business problem. The gatekeeper handles the management, quality control and administration, without having the cost of full-time staff.

Finally, the Crowd. Marketing in the past has been top down – company X came up with an idea, developed a product, tried it out on some potential consumers, and if feedback was good, launched it. The whole process took a long time, and there was no real guarantee of success. Marketing now has to be much more of a two way conversation – listening to the crowd and using their insight to inform decisions on everything from product to pricing. The perfect example of this is the recent fidget spinner craze – it came from social media and completely bypassed the marketing machines of the big toy companies, catching them on the hop.

For anyone that thinks I’m being overly pessimistic or that the changes won’t impact them, take a look at other industries. Even 10 years ago electric cars were confined to a tiny niche in the market – and now major economies such as the UK are queuing up to ban petrol and diesel vehicles by the middle of the century. Once industries hit a tipping point, change is extremely rapid. The other point for marketers to note is that brands still need their skills, but at a more strategic level. You need to be agile, knowledgeable and willing to change, but the benefit will be a more interesting and varied role that is at the heart of business success.

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October 18, 2017 - Posted by | Creative, Marketing, PR | , , , , , , , , ,

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