What’s the next frontier for online marketing?
“We won. Now what?”
The statement was uttered by Velocity Partner’s Doug Kessler to a Content Marketing Institute writer, Robert Rose. Kessler’s poignant question encapsulates the state of online marketing at this point in time. Sure, where dealing with the techlash, a hyper-realistic media logic, and social media immaturity, but social media didn’t kill culture and even the most archaic of businesses are focusing on their digital transformation.
The big question for online marketing is quickly becoming — now what?
Possible answer: Further optimisation
Investing in online marketing optimisation isn’t as straightforward as one might think. I put together this model to highlight the challenge of balancing the right level of marketing optimisation.
Every brand must invest in optimisation to reach critical mass and get past phase A as quickly as possible. In phase B, the brand is earning more money with every investment made in further optimisation — it’s a land grab. Once the brand gets past peak optimisation, the gains starts to diminish in phase C. This is due to an increased level of difficulty in making easy gains on behalf of the competition. Phase C is a delicate balance between over-investing in online optimisation and getting outperformed by other online marketers. Past the cape of inversion, where the logic is reversed, any optimisation gains will only increase the total loss.
In summary: There’s no competitive advantage in pushing online optimisation past the cape of inversion.
Possible answer: Becoming media companies
“Content is king.” Well, it’s not that straightforward.
Is creating better and better media content for online channels sustainable in infinitum? I’m a big fan of content marketing, but from an economical perspective, the value of highly useful content has a downward-sloping demand curve that are typical for anything en route to becoming commoditized.
Useful content is already so far out right in the long-tail, that P=01. In a scenario where optimisation is the same, one way to compete is therefore to offer relatively better content than the competition at the perceived value of free. The other way is to explore ways to reduce the available quantity — a strategy that isn’t synonymous with focusing on creating more and better content.
Still, these are battle royal strategies; the only way to win in a mature content-based market is to outlast the competition as the space for success is thinning out.
Possible answer: Establishing open infrastructures
What if instead of competing with another mail-to-order business, you become the actual post office? In this day and age, the analogy isn’t so absurd. Facebook is a digital media company, but not by producing any sort of media, but by being the world’s premier media distributor. Instead of beating the market, you become the market. Because if the house always wins, the best strategy is to be that house.
But there are, of course, trade-offs. The winner in a platform economy typically “takes all”.
Simply put: There’s not room for everyone to transition into becoming dominant online platforms. Thus, it’s not a working answer to the question, “What’s next?”
I’ve thought long and hard about “what’s next?” for online marketing. Some companies have fine-tuned digital strategies and process already; what should they be doing to make a push for the next frontier? As shown above, the answer seems to be quite elusive.
I find myself returning to one basic conclusion — creativity as the difference-maker:
When channels, messages, and platforms are all perfectly optimised, what remains to compete with is employee creativity.
Possible answer: Increase worker creativity
In his article Creativity is the New Productivity, Scott Belsky argues that information technology and artificial intelligence is commoditizing itself and thus freeing up mental capacity. As productivity becomes a commodity, value will increasingly have to be derived from human creativity.
It seems plausible that machine learning, automation, neural networks, quantum supremacy, and artificial intelligence will compete with human abilities as well, but the fact remains that creativity, according to the principle of scarcity, can’t ever be commoditized.