tag:econsultancy.com,2008:/topics/digital-strategy Latest Digital Strategy content from Econsultancy 2018-01-17T14:39:32+00:00 tag:econsultancy.com,2008:BlogPost/69732 2018-01-17T14:39:32+00:00 2018-01-17T14:39:32+00:00 TD Bank's acquisition of an AI firm highlights the growing importance of AI in banking Patricio Robles <p>While Layer 6's AI tech is used by clients in a number of industries, TD Bank ultimately decided that the company's technology was critical enough to its business that it made sense to buy its vendor out.</p> <p><a href="https://td.mediaroom.com/2018-01-09-TD-Bank-Group-acquires-artificial-intelligence-innovator-Layer-6">According to</a> TD Bank Group CEO Bharat Masrani, “Anticipating and meeting customer needs are at the heart of our promise, and we are excited to further accelerate our innovation agenda to deliver well into the future.”</p> <p>Masrani's comment refers to TD Bank's use of Layer 6's AI tech to create “predictive and personalized” customer experiences, which it says are at the heart of its digital transformation strategy. Layer 6's platform can be used to generate product recommendations, deliver personalized pricing, predict customer complaints and attrition and identify next best actions.</p> <p>All of those can be integral to creating user experiences that keep customers happy and strengthen TD Bank's relationship with them. Increasingly, some of these user experiences are taking place in a variety of new channels, such as <a href="https://econsultancy.com/blog/68934-how-chatbots-and-ai-might-impact-the-b2c-financial-services-industry">chatbots</a> and voice assistants, that will realistically require good AI to function well.</p> <p>Case in point: TD Bank was the first bank in Canada to launch a Twitter chatbot and it recently launched an Alexa skill that allows customers to bank by voice using one of Amazon's Echo speaker devices.</p> <p>While TD Bank is trying to position itself as an innovator and is clearly ahead of many banks, the reality for the industry is that AI is likely to be a necessity, not a differentiator, in the very near future. </p> <p>Accenture's Banking Technology Vision 2017 report found that four in five bankers believe that AI will “revolutionize” the way they gather customer data and interact with customers, and Accenture believes that AI-based applications <a href="https://www.cnbc.com/2017/03/28/ai-to-become-main-way-banks-interact-with-customers.html">will become</a> the primary channels through which they interact with them within a few years.</p> <p>The reason: according to Accenture's banking practice chief, Alan McIntyre, AI-powered applications “will give people the impression that the bank knows them a lot better, and in many ways it will take banking back to the feeling that people had when there were more human interactions.”</p> <p>He added, “The big paradox here is that people think technology will lead to banking becoming more and more automated and less and less personalized, but what we've seen coming through here is the view that technology will actually help banking become a lot more personalized.”</p> <h3>Banks need an AI strategy, and soon</h3> <p>If AI is key to the customer experiences that banks need to deliver to win, 2018 will be a critical year for banks to incorporate AI into their digital strategies. This not only involves determining where and how to adopt AI but who should develop or provide it.</p> <p>There are numerous challenges, including the widespread use of legacy systems within banks and the more stringent compliance requirements they must adhere to.</p> <p>Additionally, <a href="https://econsultancy.com/blog/69151-a-day-in-the-life-of-senior-data-scientist-at-asos">AI talent</a> has never been more in demand, creating a challenge for banks hoping to build in-house AI capabilities. And while the number of companies offering AI platforms is growing, not all AI platforms are created equal. </p> <p>TD Bank's acquisition also highlights the risk that large players in financial services or other industries that are embracing AI could acquire a platform outright, making outsourcing AI capabilities to a third-party somewhat risky. After all, the wisdom of relying on an AI platform owned by a competitor is questionable.</p> <p>Given just how critical AI could be to banks' ability to deliver the kinds of experiences their customers will demand, each bank's AI decisions could determine whether it thrives or falters in the coming years.</p> tag:econsultancy.com,2008:BlogPost/69715 2018-01-11T11:24:00+00:00 2018-01-11T11:24:00+00:00 How Disney is approaching its digital transformation and fighting disruption Bola Awoniyi <p>In order to stave off the type of disruption that Netflix inflicted on Blockbuster, Disney has had to execute a multi year plan, that is now beginning to take shape.</p> <p>The result is an approach that at the very least provides a template for how to execute a digital transformation strategy in the face of competition.</p> <h3>Investing in the tech through acquisition</h3> <p>Through the success of Netflix, it has long been acknowledged that digital streaming will have a profound impact on how consumers find and watch video content.</p> <p>However, when Netflix started investing in buying and producing its own content, rather than just distributing content, it turned its content suppliers, including Disney and Fox, into competitors.</p> <p>Therefore in order to prevent Disney from becoming obsolete, or at the very least, a heavily commoditised part of the value chain, Disney invested in technology that allowed it integrate vertically, just as Netflix laddered up by producing its own content.</p> <p>This is something that Disney theoretically could have done by building the technology in-house. However, it opted to invest in BAM-tech, a sports video streaming technology on a multiyear basis, ultimately <a href="https://thewaltdisneycompany.com/walt-disney-company-acquire-majority-ownership-bamtech/">becoming majority owner in August 2017</a>.</p> <p>Not only did this approach allow Disney to save time, but it also enabled the business to acquire significant domain expertise, as BAMtech arguably has the best streaming technology of any organisation not named Netflix.</p> <p>However, while it gave Disney the technical backbone needed to create a Netflix competitor, there is more to a streaming service than just the technology.</p> <h3>Understand the new value proposition</h3> <p>While the end result of consumers watching content is the same, doing this via a streaming platform, instead of through a cable operator means a necessary change in how Disney views its value proposition.</p> <p>Rather than just creating differentiated video content that can be bundled into channels and sold to cable distributors and advertisers, a streaming service means a direct relationship with the consumer, ultimately cutting out the cable operators entirely.</p> <p>This is relatively similar to the experiences of commerce brands needing to consider their own direct to consumer channels, to the potential determent of sales through distributors and retailers.</p> <p>However, with the barrier to entry much higher for a streaming platform, it was important for Disney to test some assumptions first. This led to the company creating a subscription platform called "Disney Life" in 2015 as a place to experiment in a restricted numer of markets.</p> <p>Not only were there valuable lessons and experiences acquired in creating appropriate customer experiences and journeys, it provided core insights on what consumers were looking for. As early as March 2016, Disney CEO Bob Iger <a href="http://www.homemediamagazine.com/disney/bob-iger-we-ve-learned-lot-disneylife-37720">can be quoted saying</a> that the service has shown them that consumers are drawn to the television and film content, over the books and video games.</p> <h3>Improving the “product”</h3> <p>Despite this insight, the Disney Life experiment has not gone well from a commerical standpoint - and this was in large part due to the insight above.</p> <p>The key differentator for a streaming platform is providing access to content that isn't available anywhere else. However for the most part, most of the television and film content on the Disney platform still available through its cable and distribution partners.</p> <p>This realisation is what caused the media brand to decide that <a href="https://www.cnbc.com/2017/09/07/disney-ceo-iger-marvel-star-wars-to-go-to-disneys-streaming-service.html">Marvel and Star Wars titles will be streamed exclusively on the new Disney streaming platform</a> when it launches, after initially being on the fence regarding the distribution of the marquee franchises.</p> <p><img src="https://assets.econsultancy.com/images/0009/1581/black-panther-quad-poster.jpg" alt="" width="600"></p> <p>This is also the context in which the Fox properties were acquired - Disney now has (exclusive) access to an extremely large content library full of premium content, not only making their offering stronger, but also making Netflix weaker, as they remove most Disney and Fox programming from Netflix over the coming years.</p> <h3>Is Disney in the clear?</h3> <p>To be clear, the degree to which Disney was in any real trouble was small. However, this transformation is about more than just surviving the Netflix; this is Disney's play to maintain and solidify its position as the worldwide leader in media and entertainment.</p> <p>That said, despite Disney’s impressive execution of it’s strategy in such a short space of time, there is still more to go. Not only do they need to wait for the Fox acquisition to be approved, but they still need to create a streaming experience that works and scales, even at the expense of its cable oriented businesses.</p> <p>This is particularly key for a legacy organisation like Disney, as it will always have it’s golden era of television dominance as a benchmark - a dominance that still contributes a significant amount towards its profits.</p> <p>While it certainly has a responsibility to create as much value as possible, becoming a full stack streaming business is very different to being a content production house.</p> <p>However, what Disney seems to have recognised and what every other company that goes through its own transformation should appreciate, is that it should be judged not on its ability to replicate or surpass the profits of its glory days, but on its ability to effectively compete today and beyond.</p> tag:econsultancy.com,2008:BlogPost/69687 2018-01-05T14:46:59+00:00 2018-01-05T14:46:59+00:00 Four digital transformation secrets, revealed Jeff Rajeck <p>So what have practitioners learned about digital transformation that most of us don't already know? What are the secrets to <a href="https://econsultancy.com/training/digital-transformation/">digital transformation</a> success?</p> <p>To find out, Econsultancy recently invited dozens of client-side marketers to discuss their digital transformation experiences. At a roundtable hosted by Damien Cummings, CEO of Peoplewave and Principal Consultant at Econsultancy, participants provided insights about how digital transformation really works, with the main points summarized below.</p> <h3>1) Digital transformation is really about survival</h3> <p>The first secret revealed by attendees is that digital transformation is not about getting ahead of the competition.  Instead, for most firms, digital transformation is started to head off bankruptcy.</p> <p>As one participant said, 'with our digital transformation programme, we are trying to disrupt ourselves before being disrupted by others'.</p> <p>The reason that struggling firms are more likely to adopt digital transformation is that transformation is not high on the priority list of profitable businesses. Instead, successful firms are under pressure to deliver short-term results, not long-term transformation strategies.</p> <p>Marketers attempting to start digital transformation at their companies were encouraged, therefore, to highlight negative metrics in their reports and point out weaknesses in the current business strategy.</p> <p>'Fear is a great motivator' quipped one participant.</p> <p><img src="https://assets.econsultancy.com/images/0009/1271/digital-transformation-1.jpg" alt="" width="600"></p> <h3>2) There is more than one way to get buy-in</h3> <p>We've often heard that top-level buy-in is required for any serious digital transformation effort, but those who have digital transformation programmes underway offered some tips on how to get it.</p> <p>First off, if you are petitioning the management, they said, then you need to go beyond presenting the benefits and showing profit projections. Instead, marketers need to talk about end-to-end processing and the key decisions that the CEO and his team have to make in order to make digital transformation happen. Spell it out for them, said one delegate.</p> <p>Furthermore, appealing to the c-suite was not the only way that marketers were able to get support for digital transformation. Another popular technique for getting buy-in was the 'bottom-up' approach. Here, marketers simply enabled customer-facing staff with new digital tools and data and let them initiate the changes in processes. This created an environment where management had to either go along with the changes or appear as if they were dragging their heels.  And these days, few people want to appear to be technology laggards.</p> <p><img src="https://assets.econsultancy.com/images/0009/1272/digital-transformation-3.jpg" alt="" width="600"></p> <h3>3) Agencies are not typically used for digital transformation</h3> <p>Veterans of digital transformation also revealed that agencies, while great enablers, struggle to drive change at organisations.  Because of this, they advised that agencies should not be relied on for digital transformation projects.</p> <p>Instead, management needs to review the skills and competencies they have internally and hire the people they need to complement the team.</p> <p>Agencies, according to participants, should continue to be used for outsourcing marketing functions. They can even be used to a greater extent once transformation is underway, freeing up resources.</p> <p><img src="https://assets.econsultancy.com/images/0009/1273/digital-transformation-2.jpg" alt="" width="600"></p> <h3>4) No one has figured out the best organisational structure yet</h3> <p>Attendees who were currently working on transformation could not agree on the ideal structure for a new, digital organisation.</p> <p>Some had implemented a 2-speed model where transformation was taking place in 'labs' outside of the reporting structure and slowly implementing changes in the main business. Others said that it was necessary to integrate innovation teams into the organisation straight away so that everyone was on the same journey.</p> <p>While no consensus on the ideal structure was reached, most agreed that the best overall approach was to train up internal staff, empower them to make changes, and trust them to figure out how best to transform the organisation.</p> <h3>A word of thanks</h3> <p>Econsultancy would like to thank our table host Damien Cummings, CEO of Peoplewave and Principal Consultant at Econsultancy for guiding the discussion and eliciting the secrets of digital transformation from our many delegates.</p> <p>We'd also like to thank all of the marketers who attended Digital Cream Singapore 2017 and shared their valuable insights. We hope to see you all at future Econsultancy events!</p> <p><img src="https://assets.econsultancy.com/images/0009/1274/digital-transformation-4.jpg" alt="" width="600"></p> <p><em><strong>Based in London and want face-to-face digital transformation training? Explore <a href="https://econsultancy.com/training/courses/digital-transformation-in-practice">our Fast Track course</a>.</strong></em></p> tag:econsultancy.com,2008:BlogPost/69679 2017-12-19T15:00:00+00:00 2017-12-19T15:00:00+00:00 Luxury brands must focus on digital experiences to fight the discount trend Patricio Robles <p>According to research firm Edited, more than a quarter of luxury items were discounted by 26% to 50%. For comparison, items sold by premium and mass-market brands saw discount volumes of 24% and 20%, respectively.</p> <p>As Bloomberg's Lisa Wolfson and Stephanie Hoi-Nga Wong <a href="https://www.bloomberg.com/news/articles/2017-11-27/holiday-markdowns-deepen-despite-brands-push-for-higher-prices">noted</a>, “Though heavy promotions and specials are a hallmark of the holiday season, the data from Edited suggests that the labels still have a way to go before getting customers to shell out top dollar.”</p> <h3>Could an EU court ruling help luxury brands?</h3> <p>While luxury brands have turned to hefty discounting this year to drive sales, <a href="https://quartzy.qz.com/1148881/luxury-brands-can-stop-sales-of-their-goods-on-amazon-in-europe-court-rules/">a court ruling</a> could help them better control digital distribution of their products, and thus potentially reduce their reliance on discounting, at least in the EU. </p> <p>Coty, which owns brands including Calvin Klein, Marc Jacobs and Covergirl, had sued its authorized German distributor, Parfumerie Akzente, for selling Coty brand products through Amazon and other online retailers. The company argued that such sales hurt the image of its luxury brands.</p> <p>While Parfumerie Akzente countered that its use of platforms like Amazon adhered to requirements intended to “[preserve] the luxury image” of the brands, the European Court of Justice sided with Coty and wrote in its decision that a prohibition on sales through certain online channels “is appropriate and does not, in principle, go beyond what is necessary to preserve the luxury image of the goods.”</p> <p>The Court elaborated:</p> <blockquote> <p>The Court notes in this context that the quality of luxury goods is not simply the result of their material characteristics, but also of the allure and prestigious image which bestows on them an aura of luxury. Therefore, any impairment to that aura of luxury is likely to affect the actual quality of those goods.</p> </blockquote> <p>The Computer &amp; Communications Industry Association, which represents companies like Amazon, eBay and Rakuten, obviously alarmed and issued a statement that read in part, “This judgment is bad news for consumers, who will face fewer choices and also less competition when they want to shop online.”</p> <p>Luxury brands, of course, will hope that this court ruling will help them strengthen the pricing power their holiday shopping discounts make clear they are struggling to retain. But they would be wise to consider the possibility that limiting sales on popular platforms will only do so much because other factors are likely contributing to luxury brands' hefty discounts.</p> <h3>Other factors contributing to luxury brand discounts</h3> <p><strong>Lack of product differentiation.</strong> As luxury consultant Milton Pedraza told Bloomberg, “There are too many luxury and premium brands selling very similar products.” To the extent that luxury brands aren't producing products that potential customers view as unique if not trendsetting, they are obviously going to struggle to maintain pricing. Unfortunately, the proliferation of fast fashion, fashion startups offering made-to-order products, and counterfeits makes life much more difficult for luxury brands.</p> <p><strong>Digital experience challenges.</strong> Luxury customer experience is one of the reasons luxury customers are willing to pay top dollar for luxury products. Of course, replicating the in-store luxury customer experience online is tough and an inability to do so could in some cases make it harder for luxury brands to convince online shoppers – especially those who haven't experienced the in-store hand-holding – to pay full price.</p> <p><strong>The mainstreaming of luxury.</strong> Luxury isn't what it used to be. Thanks in large part to social media, luxury brands are more mainstream than ever. On one hand, that's a good thing. On the other, it can contribute to the perception that luxury brands' products are less exclusive. In fact, <a href="https://econsultancy.com/reports/the-new-face-of-luxury-maintaining-exclusivity-in-the-world-of-social-influence">this is one of the biggest challenges luxury brands have faced in adopting influencer marketing</a>.</p> <p>For these reasons, luxury brands should recognize the need to double down on customer experience and specifically, how they craft <a href="https://econsultancy.com/blog/69000-what-farfetch-s-store-of-the-future-tech-says-about-the-state-of-luxury-retail">online experiences</a> that convince consumers their products are indeed worth top dollar. </p> tag:econsultancy.com,2008:BlogPost/69633 2017-12-13T15:00:00+00:00 2017-12-13T15:00:00+00:00 The six-point guide to data-driven transformation Jeff Rajeck <p>Reason being, unless data is captured, shared and utilized, any increased adoption of digital technology will be in vain. A competitor with the better data will most likely win in the end.</p> <p>With this in mind, how can companies transform both digitally and with data? What are the issues that need to be considered?</p> <p>To find out, Econsultancy recently invited dozens of marketers to discuss this and other topics over roundtable discussions.  At a table hosted by data experts David Brigham, Analytics Director, Mirum, and Zak Agus, Sales Director, SEA, Tealium, brand marketers revealed their thoughts on what was driving data-driven transformation at their organisations. The main points from the discussions are summarized below.</p> <p>Before we start, though, we'd like to let you know about upcoming training which may help you with your data-driven transformation. Econsultancy is offering an Advanced Mastering Analytics course on April 8th, 2018 in Singapore. <a href="https://econsultancy.com/training/courses/advanced-mastering-analytics-training-singapore/dates/3365/">Click here for more information and to book your spot</a>.</p> <p>So what do organisations need to consider when driving data-driven transformation?</p> <h3>1) Breaking down data silos</h3> <p>The first thing participants asserted was that there is no 'one size fits all' approach to getting data flowing through an organisation. Every organisation is different and so each data-driven transformation project needs to take the organisational structure into consideration first.</p> <p>Yet despite these differences, nearly everyone said that departmental data silos are perhaps the biggest barrier for companies aiming to harness the power of data.</p> <p>In order to get over this hurdle, participants argued, the transformation team must examine all of the company's data assets and determine which department has ownership and who already uses the data. Then, they should ensure that transformation has buy-in at the highest level so that management cannot unreasonably stand in the way of future data requests.</p> <p><img src="https://assets.econsultancy.com/images/0009/0883/data-driven-transformation-4.jpg" alt="" width="800" height="533"></p> <h3>2) Breaking down insight silos</h3> <p>Data silos, however, are not the only problem faced by data-transformation teams. Another issue which attendees brought up is that companies also have 'insight silos'.</p> <p>An insight silo occurs when one department has data analysis expertise which is lacking in other areas of the organisation, and is unwilling or unable to share.</p> <p>According to attendees, this situation occurs quite often at airlines. Airlines have large teams of pricing analysts and separate teams of marketing analysts who work independently of each other, with little sharing of insights.</p> <p>So, for organisations to benefit from their talent, the data-transformation team should also identify where the analyst talent sits and find ways to get the teams to collaborate.</p> <h3>3) Finding industry 'data pools'</h3> <p>For data that does not exist within the organisation, the transformation team will have to look elsewhere.</p> <p>Existing solutions, such as data management platforms (<a href="https://www.econsultancy.com/blog/68769-what-s-the-difference-between-crm-marketing-automation-and-dmps">DMPs</a>), help but often they are expensive and may actually offer too much data.</p> <p>A new alternative to DMPs, according to participants, is for companies in the same vertical to share data between each other so that everyone benefits from having access to relevant and relatively inexpensive data.</p> <p>Named 'data pools' by our subject matter experts, these new ways of obtaining data inexpensively should also be researched by the data transformation team.</p> <p><img src="https://assets.econsultancy.com/images/0009/0884/data-driven-transformation-3.jpg" alt="" width="800" height="533"></p> <h3>4) Resourcing the transformation</h3> <p>In addition to identifying the talent already present within the organisation, participants indicated that data-driven transformation often requires people with new skills, such as data scientists.</p> <p>As finding the right people for these roles is often time-consuming and difficult, one suggestion was that an organisation going through transformation should first hire a 'data guru' who will be responsible for upskilling existing staff.  In this way, expertise <a href="https://econsultancy.com/blog/68487-how-can-companies-attract-and-retain-talent-in-the-digital-age/">can be built-up in-house at the same time new talent is being recruited</a>.</p> <h3>5) Proving data-driven ROI</h3> <p>Proving return on investment (ROI) is now expected in most marketing departments, but it is a relatively new topic for analysts.</p> <p>For a small project costing a few thousand dollars and lasting 3 months, ROI may not be a big issue but for a long-term data transformation costing a few million dollars, ROI should certainly be a consideration.</p> <p>To manage this requirement for ROI, data-driven transformation teams should be prepared to defend their investments in technology and resources. The team will need to demonstrate how their approach will either increase revenue or decrease costs, something which most analysts have not yet given much thought, said one participant.</p> <p><img src="https://assets.econsultancy.com/images/0009/0885/data-driven-transformation-1.jpg" alt="" width="800" height="533"></p> <h3>6) Communicating the limits of data-driven transformation</h3> <p>Finally, attendees said that the transformation team should set departmental and management expectations about the potential and the limits of data-driven transformation.</p> <p>For example, a marketing department who wants to invest in personalisation data must first understand the risks of becoming too intrusive through excessive use of personal data.</p> <p>Additionally, there will come a point when additional data and analytics will only achieve incremental results, and business heads must be made aware when that point is reached. As one participant put it, "you can't continually invest in data and expect to get the same results every time."</p> <p>So, while teams are talking up the potential of a data-driven transformation they must also be careful not to overpromise and subsequently underdeliver.</p> <h3>A word of thanks</h3> <p>Econsultancy would like to thank our table host David Brigham, Analytics Director, Mirum and subject matter expert Zak Agus, Sales Director, SEA, Tealium for guiding the discussion and providing real-world examples of how brands are achieving marketing automation excellence.</p> <p>We'd also like to thank the table sponsor, Tealium, and all of the marketers who attended Digital Cream Singapore 2017 to share their valuable insights. We hope to see you all at future Econsultancy events!</p> <p><img src="https://assets.econsultancy.com/images/0009/0886/data-driven-transformation-5.jpg" alt="" width="800" height="600"></p> tag:econsultancy.com,2008:BlogPost/69650 2017-12-08T15:00:00+00:00 2017-12-08T15:00:00+00:00 What Amazon's entry into the pharmacy market might mean for pharma marketers Patricio Robles <h3>What it might mean for pharma marketers</h3> <p>The news of Amazon's interest in selling prescription drugs has, for obvious reasons, spooked investors in major pharmacy players like CVS, Walgreens and Express Scripts, all of which risk being disrupted by Amazon the way so many other businesses have.</p> <p>But pharmaceutical companies could find that Amazon's disruption is a boon for them.</p> <p><a href="https://www.washingtonpost.com/news/wonk/wp/2017/05/17/what-amazon-could-do-to-the-business-of-selling-prescription-drugs/">According to</a> Adam Fein, president of Pembroke Consulting, one of the easiest ways for Amazon to enter the market would be to focus on patients who pay cash for generic and brand-name drugs.</p> <p>Although prescription drug coverage is typically provided through health insurance plans – all plans offered under the Affordable Care Act (ACA) require it – a growing number of patients opt to pay cash for their prescription. As Doug Hirsch, the co-founder of GoodRx, a prescription drug pricing comparison service, explained to The Washington Post, this is a result of the fact that many patients have high deductibles and want to see if it's possible to get better deals.</p> <p>For pharma marketers, Amazon's entry into this market could increase the importance of their direct-to-consumer marketing efforts.</p> <p>Unfortunately, direct-to-consumer marketing is increasingly difficult for pharma companies and could potentially even become virtually impossible if some groups have their way. The American Medical Association supports a ban on direct-to-consumer ads that pitch prescription drugs and in California, a state legislator earlier this year <a href="https://www.fiercepharma.com/pharma/california-legislator-takes-aim-at-industry-s-copay-coupons-pricing-fight">introduced legislation</a> that would ban the use of copay coupons when an inexpensive generic drug alternative was available.</p> <p>A ban on direct-to-consumer ads would obviously complicate matters for pharma marketers, but until that day comes, one of the best ways they can prepare for the potential entry into the pharmacy market would be to evaluate their direct-to-consumer efforts in light of a changing landscape in which digital channels like <a href="https://econsultancy.com/blog/67993-why-pharma-marketers-are-increasingly-turning-to-social-media">social media</a> increasingly trump established channels <a href="https://econsultancy.com/blog/68120-as-tv-ads-lose-their-sway-pharma-marketers-need-to-adapt">like television</a>.</p> <p>They should also consider that if Amazon does enter the market, it could have the effect of increasing pricing transparency, something they would be wise to embrace rather than fight.</p> <h3>Amazon as frenemy?</h3> <p>While Amazon's entry into the retail pharmacy market could prove to be a net positive for pharma companies well-positioned to take advantage of it, there is also the potential that Amazon could become a frenemy.</p> <p>How? As drug supply chain expert Stephen Buck, co-founder of Courage Health, <a href="https://www.cnbc.com/2017/11/02/amazon-pharmaceutical-move-acquisition-targets.html">pointed out</a>, Amazon could eventually decide to manufacture its own generic medications. If that happened, pharma companies would find themselves competing with a company that also acts as, perhaps, one of their more important distribution channels.</p> <p>This possibility too also demonstrates the importance of direct-to-consumer marketing, as pharma companies will want to do everything they can to establish the superiority of their drugs over generics that could one day be manufactured by Amazon.</p> <p><em><strong>More on pharma:</strong></em></p> <ul> <li><a href="https://econsultancy.com/blog/68851-six-ways-digital-is-changing-the-pharma-healthcare-industry">Six ways digital is changing the pharma &amp; healthcare industry</a></li> </ul> tag:econsultancy.com,2008:BlogPost/69609 2017-11-27T15:00:00+00:00 2017-11-27T15:00:00+00:00 Should brands be worried about the possible repeal of net neutrality rules? Patricio Robles <p>While the most talked about concerns relate to consumers and bandwidth-intensive services like Netflix and YouTube, some are suggesting that the changes should worry brands. For instance, Joshua Lowcock, the U.S. executive vice president and chief digital and innovation officer at agency UM, told AdWeek that the changes could impact ad prices and viewability.</p> <p>AdWeek's Marty Swant <a href="http://www.adweek.com/digital/marketers-fear-the-fccs-plan-to-kill-net-neutrality-could-increase-advertising-prices/">explained</a>:</p> <blockquote> <p>Lowcock said brands might have to start paying a premium for quality bandwidth or be pressured to go with one media company owned by an ISP versus another that isn't.</p> <p>For example, in an environment where net neutrality is absent, an ad being served on a website might not load at a reasonable speed for a consumer, prompting them to skip ahead and therefore messing up a campaign's metrics.</p> </blockquote> <p>Is this scenario realistic? It's hard to say.</p> <p>Obviously, sans net neutrality rules, ISPs will have far more leeway to experiment with and implement different service models, but that certainly doesn't mean that they will or that they'll take their efforts to hypothetical extremes.</p> <p>For their part, in the wake of protests aimed at convincing regulators to keep net neutrality rules, major ISPs have argued that they will still have to adhere to rules that demand transparency and forbid practices that are anti-competitive or deceptive. And one of the country's largest ISPs, Comcast, has made its own net neutrality promise to customers.</p> <p>Not surprisingly, many people don't trust ISPs and there are certainly arguments to be made that some level of mistrust is warranted.</p> <p>But back to brands and the net neutrality concerns specific to them. Let's look at two of the biggest.</p> <h4>Competition and innovation</h4> <p>According to AdWeek's Swant, “With user experience and online accessibility a top priority for many brands, creating a barrier where some larger brands can afford top speeds and others can't could create even more barriers for challenger brands or startups to compete.”</p> <p>This isn't a totally illegitimate concern. But the reality is that challenger brands and startups already face significant barriers. The <a href="https://www.econsultancy.com/blog/69381-the-google-facebook-duopoly-extends-to-mobile-apps-what-can-marketers-do">duopoly of Google and Facebook</a> is stronger than ever and absent a regulatory crackdown, is only likely to get stronger. Facebook, for its part, <a href="https://www.wired.com/story/facebooks-aggressive-moves-on-startups-threaten-innovation/">has proven its formidable ability to thwart competition</a> from startups through acquisition or copycatting.</p> <p>Other dominant companies, including Amazon and Apple, have also proven they're capable of doing the same.</p> <p>While this doesn't mean that brands should pretend net neutrality is a non-issue without the potential for impact, it's also important to recognize that forces hostile to competition and innovation are already at work and these are creating significant challenges that aren't merely hypothetical. </p> <p>If the brand world is going to fret about the repeal of net neutrality and its potential impact on competition and innovation, it would also be wise to consider how it's funding the very forces that are already diminishing competition and innovation in the digital economy.</p> <h4>Ad performance</h4> <p>When it comes to concerns about ad performance – the aforementioned concern that “an ad being served on a website might not load at a reasonable speed for a consumer, prompting them to skip ahead and therefore messing up a campaign's metrics” – there's an irony that shouldn't be lost on brands: it's their digital advertising that has played a large role in the degradation of web page performance.</p> <p>Tired of ads that bog pages down and interfere with user experience, consumers have embraced <a href="https://econsultancy.com/blog/68502-three-creative-ways-publishers-and-advertisers-are-combating-ad-blockers/">ad blockers</a>, creating a crisis that has even forced the world's largest digital ad player, Google, <a href="https://econsultancy.com/blog/69326-google-to-start-warning-sites-about-bad-ad-experiences">to take action</a>.</p> <p>Frankly, consumer dislike (or even disgust) for advertising is the biggest threat brands face and if brands are really concerned about ad performance, there are actions they can and should be taking today. </p> <h3>So what should brands do about net neutrality?</h3> <p>At the end of the day, the possible repeal of net neutrality rules is important and brands will want to make sure they're voicing their concerns and trying as best they can to protect their interests.</p> <p>But they should also recognize that the fight over net neutrality is but one battle, and they have other opportunities to promote and defend the principles behind some of their biggest net neutrality concerns.</p> tag:econsultancy.com,2008:BlogPost/69598 2017-11-23T14:26:20+00:00 2017-11-23T14:26:20+00:00 Four steps to successful digital transformation Jeff Rajeck <p>But every journey requires preparation and it can be difficult to know what organisations should do before getting started. What exactly needs to be in place for digital transformation to work?</p> <p>To answer this question, Econsultancy recently brought together a few veterans of digital transformation to discuss what organisations need to do before they take that first step.</p> <p>Below are the points summarized from the discussion, but as this was just one of the topics from the day <a href="https://econsultancy.com/hello/ask-me-anything-digital-transformation-getting-started-webinar-resources/">please do watch the whole discussion here</a>.</p> <p>So, the question was posed to both Damien Cummings, Lead DT Consultant at Econsultancy and CEO at Peoplewave, and Eu Gene Ang, Principal Trainer, Econsultancy - what are the basic ingredients required for a successful digital transformation?</p> <h3>1) Think differently</h3> <p>Damien was quick to answer that <strong>there is no set playbook for digital transformation</strong>. The process is different for B2B and B2C companies and can also be different, depending on the industry.</p> <p>He continued that <strong>digital transformation was typically the result of a catastrophe</strong>. Either one that had happened or one that was about to happen (e.g. Google/Uber/AirBnB entering your market).</p> <p><strong>The first essential ingredient of such a situation is for people to think differently. </strong>People in the organisation must first analyze their people, technology, go-to-market strategies, and all of the other things which they are comfortable with - and think about how these can be changed to meet the threat.</p> <p><img src="https://assets.econsultancy.com/images/0009/0622/digital-transformation-1.jpg" alt="" width="615"></p> <h3>2) Understand the details of your journey</h3> <p>Eu Gene followed up with another helpful tip.  <strong>Digital transformation, he says, must start with an understanding of why you are going through it.</strong></p> <p>It could be, as above, that your company's market is changing or it could be that your company is struggling to be profitable with all of the manual processes in place.</p> <p>Regardless, in order for digital transformation to be successful a number of details need to be thought out in advance: </p> <ul> <li> <strong>Vision</strong>: What does the end result look like?</li> <li> <strong>Skillsets</strong>: What do you have? What do you need?</li> <li> <strong>Resourcing</strong>: Who is going to do the work?</li> <li> <strong>Incentive to change</strong>: Who in the organisation is incentivized to change? Who needs more incentives?</li> <li> <strong>Action plan</strong>: What are some of the first concrete actions you will take? </li> </ul> <p> <img src="https://assets.econsultancy.com/images/0009/0623/digital-transformation-2.jpg" alt="" width="615"></p> <h3>3) Have a strategy</h3> <p>Once you know the details, Damien continued, then you need to put a strategy in place.  </p> <p>This strategy should go beyond the steps you are taking toward digital transformation, but should instead encompass the whole company. For example, how is your company going to position itself to fend off threats from digitally-savvy companies?</p> <p>Additionally, you need a people strategy. In addition to evaluating the skillsets mentioned by Eu Gene, you also need to make sure you have the right level of people. <strong>If you want to compete with companies like Google, then you need people with talent and training at that level.</strong></p> <p>Finally, you do need a technology strategy. Without a step change in technology and new sources of data, your plan will not have enough innovation for it to succeed in the long term.</p> <p><img src="https://assets.econsultancy.com/images/0009/0624/digital-transformation-3.jpg" alt="" width="615"></p> <h3>4) Don't worry about processes, empower your employees</h3> <p>Finally, Damien added that with the right strategy you won't need to worry so much about processes.</p> <p><strong>If you have great people with the right training who understand the strategy, then they will develop the right approach to implementing your strategy.</strong></p> <p>This is particularly important for companies whose markets change quickly. As things evolve more rapidly and data becomes more real-time, then the company's reaction must be more agile.  And for this to happen, you must empower employees to make the right decisions.</p> <h3>So...</h3> <p>So, according to our experts, before launching into digital transformation ensure that you have a: </p> <ol> <li>New, resilient approach to your market</li> <li>A solid idea about why you need to transform</li> <li>A strategy which encompasses the whole company, and</li> <li>People who can execute the strategy. </li> </ol> <p>Then you will have the key ingredients in place for a successful digital transformation project.</p> tag:econsultancy.com,2008:BlogPost/69556 2017-11-10T10:01:15+00:00 2017-11-10T10:01:15+00:00 More brands want to bring programmatic in-house, but can they? Patricio Robles <p><a href="https://www.mediapost.com/publications/article/309473/32-of-marketers-to-bring-programmatic-media-buyin.html">According to</a> Advertiser Perceptions DSP Report, which polled more than 700 advertisers, nearly a third (32%) of those surveyed say they plan to bring their programmatic buying in-house. </p> <p>And it looks like many agencies apparently aren't going to stop them from doing that as the majority of marketers and agencies polled revealed that they believe programmatic ad buying will eventually become an in-house responsibility.</p> <p>The reasons behind this are not surprising: brands are increasingly concerned with ad fraud, brand safety and verification. As <a href="https://econsultancy.com/blog/69438-is-uber-s-lawsuit-against-an-agency-a-harbinger-of-greater-brand-agency-discord">Uber's recent lawsuit against one of its agencies</a> demonstrates, these issues are difficult for brands and agencies to navigate and when something goes wrong, the fallout can be ugly.</p> <p>There's also the issue of cost and how agencies are paid. Specifically, brands have become aware of <a href="https://www.marketingweek.com/2016/05/23/mark-ritson-agency-kickbacks-are-turning-media-buying-into-a-shadowy-black-box/">agency kickbacks</a> and double dipping, and for obvious reasons, they don't like it.</p> <h3>What needs to happen for programmatic to move in-house?</h3> <p>Of course, bringing programmatic in-house will require more of brands in the following areas:</p> <h4>Knowledge.</h4> <p>Knowledge of programmatic has improved considerably in recent years but before brands can bring programmatic in-house, they will need to honestly and accurately assess how much knowledge of programmatic exists within their marketing organizations and not only ensure that they have enough to support programmatic in-house but establish plans to grow and disseminate that knowledge throughout the marketing organization.</p> <h4>Resources.</h4> <p>Programmatic can be complex and the processes that support programmatic efforts can't be done without ample people and technology resources. This is especially true for brands that expect their in-house programmatic operations to perform better than agency operations.</p> <p>People and technology resources both obviously require an investment of dollars and brands should keep in mind that even with dollars, staffing can be a challenge because there is a shortage of skilled and experienced programmatic professionals and many of them are concentrated in a small number of geographic regions.</p> <h4>Vendor relationships and partnerships.</h4> <p>Brands that want to bring programmatic in-house will need to establish direct relationships and partnerships with vendors that supply technologies and services related to programmatic. From attribution modeling to data management platforms (DMPs), there are a whole host of external vendors that brands will need to line up to bring programmatic in-house.</p> <h3>Is an in-house shift really going to happen?</h3> <p>Some brands might have a reasonable rationale for wanting to bring programmatic in-house and have the substantial resources necessary to make the investment, but even then, there are few examples of brands actually doing so. For example, when <a href="http://adage.com/article/digital/l-oreal-bring-progra/302519/">L'Oreal made headlines</a> about this last year, <a href="https://adexchanger.com/data-driven-thinking/when-programmatic-in-house-is-really-not-in-house/">it was clarified</a> that its initiative was actually a “strategic partnership with our media agency supporting our decisions, the operations, technology, and relationships.”</p> <p>So for the time being, while nearly a third of brands say they plan to bring programmatic in-house, there's no reason to believe that number will be achieved any time soon.</p> <p><em><strong>Subscribers looking to learn more about programmatic can download <a href="https://econsultancy.com/reports/the-cmo-s-guide-to-programmatic/">The CMO's Guide to Programmatic</a></strong></em></p> tag:econsultancy.com,2008:BlogPost/69573 2017-11-09T14:45:00+00:00 2017-11-09T14:45:00+00:00 How brand marketers can improve their agency relationships Jeff Rajeck <p>To shed some light on this topic, we asked Hari Shankar (Ecselis Asia), a veteran of both brands and agencies, to speak about how brands can have more productive relationships with agencies at a recent Econsultancy event in Singapore.</p> <p>During his talk, Hari shared many insights about how brand marketers should both choose their agency partners and work with them on an ongoing basis. Below is a summary of his main points.</p> <h3>1) Write a well-crafted request for proposal (RFP)</h3> <p>The best client-agency relationships always start with the brand side delivering a request for proposal which is: </p> <ul> <li> <strong>Clear</strong>: Avoid using company or industry acronyms and state overall objectives</li> <li> <strong>Bounded</strong>: The roles for both the agency and the brand marketers should be included</li> <li> <strong>Realistic</strong>: Delivery times and goals need to be evaluated sensibly before asking for quotes </li> </ul> <p>Also, the RFP should include long-term goals of the brand so that everyone understands the big picture behind the work that needs to be done. (For more advice on how to write an RFP, be sure to refer to Econsultancy's <a href="https://econsultancy.com/reports/rfp-templates/">RFP templates</a>.)</p> <p><img src="https://assets.econsultancy.com/images/0009/0331/brand-agency-relationship1.jpg" alt="" width="800" height="533"></p> <h3>2) Select your agency objectively, quantitatively, and qualitatively</h3> <p>Evaluating agencies should be carried out on an objective, quantitative and qualitative basis.</p> <p>Objective in the sense that there should not be favourites when you start the selection procedure. Keep the selection team small and of relatively equal status in the company so that you may avoid this issue.</p> <p>Quantitative in that you ask for a quote and evaluate the agencies based on their response. Keep 'procurement wolves' from driving down the agency's price before you have even started.<strong> </strong> Procurement departments are very good at buying physical inventory, but may squeeze the 'human inventory' of agencies too much.</p> <p>And finally, select your future agency partner qualitatively so that you are choosing the one which fits your needs. If they specialise in digital don't push them to deliver omnichannel. If they are known for being creative, then find another agency to do your media buying.</p> <p><img src="https://assets.econsultancy.com/images/0009/0332/brand-agency-relationship3.jpg" alt="" width="800" height="533"></p> <h3>3) Keep both the scope and performance metrics simple </h3> <p>Once an agency is selected and the commercial terms defined, it should be clear to both sides </p> <p>A) what the agency is aiming to accomplish for the brand;</p> <p>B) how everyone will know if they are successful.</p> <p>The best way to do this, according to Hari, is to keep things simple. Brands should avoid having too many people involved in setting the scope and draw a roadmap for success from the outset.</p> <p>This way both sides know what the expected outcomes are and whether or not the targets are being hit.</p> <p>Too often, explained Hari, each brand marketer throws their own objectives into an ill-defined strategy and neither the agency nor the marketer managing the relationship understands overall performance.</p> <p><img src="https://assets.econsultancy.com/images/0009/0333/brand-agency-relationship2.jpg" alt="" width="800" height="533"></p> <h3>4) Run a tight ship at both the agency and the brand side</h3> <p>If the brand marketers can set well-defined goals and success metrics at the start, then they need to strive to keep things simple on an ongoing basis.</p> <p>To do so, they should: </p> <ul> <li> <strong>Have a clear line of communication:</strong> Assign people on each side who will be responsible for keeping people accountable and results measurable</li> <li> <strong>Avoid unnecessary meetings:</strong> Agencies provide more value when they spend less time in meetings</li> <li> <strong>Establish a sensible reporting process:</strong> If there are too few reports, then the brand-side marketers will feel like they are being kept in the dark. But, Hari noted, having too many reports puts you in the same place, only the agency will be spending more time putting together charts and graphs than doing the work they are being paid for. </li> </ul> <p>So, overall, for brands and agencies to work well together both sides need to minimize the fluff and maximize the action. Cutting down on all unnecessary and time-consuming processes will make the relationship work better for everyone.</p> <h3>A word of thanks</h3> <p>Econsultancy would like to thank Hari Shankar, Managing Director, Ecselis Asia &amp; Head of Paid Digital Strategy at Havas Media Group for his insights on how brands and agencies can work together more productively.</p> <p>We'd also like to thank all of the marketers who attended the presentation and helped with this post by asking many intelligent questions.</p> <p>We hope to see you all at future Econsultancy events!</p> <p><img src="https://assets.econsultancy.com/images/0009/0334/econsultancy-singapore.jpg" alt="" width="800" height="600"></p>