Jacques Bughin, Director, McKinsey & Company, Brussels
David Edelman, Partner, McKinsey & Company, Boston
In 2020, there will be no more spam. Email in-boxes clogged with irrelevant offers or TV ads about something you don’t care about will be historical relics. To consumers, marketing will no longer be an intrusion but rather will offer personal, on-demand services. Wherever customers are in the physical or virtual world, at whatever stage of their decision journey, they will expect to find, choose, and interact with relevant content and experiences.
Digital media drove a shift in marketers’ budgets to “always-on” digital media, such as search, display, and social. The marketing on-demand world of 2020 will evolve to be “always relevant.” For brands and their agencies, that will require a much more sophisticated and targeted approach to address the ubiquity of touch points so that they can be there at a consumer’s moment of need—no matter where or when it is. And, they will invest in massive analytical capabilities to support the brand’s stewardship of their customers’ information. As a renowned internet services leader recently said at McKinsey’s 2011 Chief Marketing and Sales Officer Forum: “Ads need to answer questions.”
Technology will be the catalyst for all this change. Advanced analytics will be able to sense interactions and respond in real-time with content tailored to every customer “touch.” NFC chips in phones, as well as smart tags that can go on any object, will open up an “Internet of things” that will be smart, interactive, and always accessible. Breakthroughs in mobile technology will create an infinite numbers of ways to connect with consumers.
Past articles by McKinsey on the changing Consumer Decision Journey described the need for marketers to move from pushing consumers through a linear “purchase funnel” to helping them through their own, iterative, purchase decision journey . In the hyper-interactive world of 2020, brands will need to evolve this model of supporting an on-demand journey, leading to massive shifts in strategy and mindset:
1. Become a super-publisher
The need for relevance will drive consumer demand and shape advertising supply. Consumers will demand the ability to touch, change, personalize, and share. Touch a beer coaster to learn about the brewery and order a case to be delivered to your home. Tap a pair of jeans with your phone to see how they’ll look on you. Swipe your hand in the air to dismiss a television spot aimed at your child and instead select a short video on choosing the right yoga outfit. And it all connects back to your personal apps through a cloud-based network that monitor what you do, facilitate transactions, and tailor the information you see. There will be billions of interaction points that will place enormous demands on brands to create and deliver just the right piece of content—whether it’s on an interactive billboard, a smart phone, or a car’s dashboard.
Winning marketing strategies will focus on building relevant routes to market. Instead of relying on buying paid media inventory, marketers will need to build their own connections with consumers through an increasing range of opt-in, on-demand channels that marketers themselves need to own and operate. A brand’s design challenge will be to manage an experience flow that offers many ways to engage, collects information, and then uses it to deliver value to both it and the customer.
2. Operate like a tech company
The big data of today will seem miniscule in 2020. The data and design techniques to enable all these myriad interactions will be mind-bogglingly complex, as will the need to manage a coherent content supply chain to support them. Marketers will need to master the data to coordinate a constantly expanding surface area of interactivity—think CRM on steroids—which will evolve to connect, track, and manage interactions across physical and digital points through the cloud.
With estimates that marketing’s tech budgets will eclipse IT’s in the next five years, CMOs will need to hire analysts to manage and track the data flows, data scientists and mathematicians to create ever more sophisticated algorithms, and “data whisperers” to coax meaning from the flood of 1s and 0s. “Experience designers” then need to match this output with content that will inform, entertain, or assist at each moment of personal contact. The winners will be brands that can design and stitch together those interactions into a coherent brand experience.
3. Become trustees of the consumer
Already, we’re seeing significant demand for—and profits from—being relevant and trustworthy. A recent McKinsey survey showed that 35 percent of online buyers are willing to share personal information in return for targeted offers (e.g. promotional coupons). Another study showed that among the 30% of customers interested in active co-creation, the bulk will only participate with brands they trust.. Customers are already very concerned about their privacy. Imagine those concerns in 2020, with the unprecedented levels of interaction and personal data collected. Despite whatever regulations are enacted to address that tension, the 2020 digital world will demand something similar to an implicit contract between the brand and customer, based on trust. Marketers will need to run their business in a way that never disappoints and always delights the customer. If not, the mobile and vocal consumer will refuse to cooperate, abandon them and call on their social networks to leave as well.
Advertising will evolve in many ways that no one can predict. But the trend towards “on-demand” marketing is already clear and is placing new demands on marketers’ leadership and skills. Marketers cannot afford to wait until 2020 to be ready.