Nigel Morris, Aegis Media Americas and EMEA
Posted October 12th, 2012
Nigel Morris, CEO, Aegis Media Americas and EMEA
Convergence is Shaping the Future of Communications
Our belief is that the near future of communications is visible right now. The forces shaping the media landscape, are already with us. We are at the point of ‘media convergence’
And although it’s impossible to predict what will happen specifically to advertising in 2020, we can definitively identify the big changes that will redefine the media industry and this will change the role of marketing as a function within business organizations.
We have been talking for many years about Convergence, but it is now here. It just hasn’t taken exactly the form we expected ten years ago. Despite the central role of the mobile device in convergence, we no longer seem to be moving towards one single device. Nor are we moving towards one platform. Both the internet and the mobile phone have become atomized, to the point where users prefer each platform to be really good at performing their core function.
Connected TV, tablets, and NFC technology growth rates demonstrate how in the future people will watch, share and transact through multiple devices. There will be “many next big things” but the overall course is set.
The point of convergence is the empowerment of people and the dynamics of convergence are enabling people to take control over their relationship with businesses and with media.
In a convergent world, no person and no touchpoint exist in isolation. Everything is interconnected.
In a convergent world, every action can potentially have an effect on everything else. Everything is interdependent.
In a convergent world, it is impossible to keep things separate, or to control the way that a consumer interacts with a company. Everything is transparent.
The future of advertising and communications will move from channelling brand messages to designing and creating valuable consumer-brand interactions. But they will only be valuable to brands if the brand delivers relevant utility or enjoyment at the right time, place and social or physical context to the right people.
People, not devices, drive convergence:
In today’s digital landscape people freely connect and share personal data in a highly transparent way. These cultural exchanges occur within communities or points of interest.
These cultures dictate the context in which people consume media, and this helps to determine their motivations. Seeing people both as the crowd, as well as individuals within the crowd, will enable brands to create value and spread their influence within the ecosystem.
In the future, understanding connected cultures will be critical to success for brands seeking to develop deeper relationships with their most important consumers. It will allow brands to deliver contextually relevant messages, products or services that address the specific needs of the cultures where real people connect and share.
For agencies, understanding Connected Cultures will be critical to truly focus on communications as an outcome not an input. This will lead to a resurgence in the value that agencies can deliver to companies and brands.
The point of engagement and the point of transaction will converge:
The arrival of the point of convergence now means that content and commerce are rapidly converging, not only for those businesses whose products or main sales channels are digital, but for all businesses. This will lead to a resurgence in the importance of marketing as a business discipline.
A fundamental of the dynamics and drivers of convergence is the separation of media from the context dictated by the device (time, place and platform.)
The ‘broadcast event’ hasn’t become obsolete, but it is now far from the norm. And whilst video content overall is more popular than it has ever been, the household penetration of television sets in the US has just declined year on year for the first time. But that doesn’t mean that context is dead.
Social context is more powerful than ever. This is most visible in the rise of time spent on social networks. People naturally gravitate to communities where they connect and share interests and experiences. Social media has created a digital layer that enables brands to participate into the conversation.
Mobility is the other major underlying context trend, driven by the evolution of technology. Over the next five years physical limitation of mobile devices (e.g. battery, data storage) will likely shift the focus from the device itself to its capability to connect to and interact with our physical environment.
As media convergence unfolds and accelerates, the point of engagement (through content) and the point of transaction (through digital commerce) will become close together.
And context (mobility, communities) will be the most powerful influence for brands to be relevant and generate transactions.
This process will make the contribution of communications to a business much more visible, immediate and directly measurable.
Data will drive sustainable business models
In the future the data that Connected Cultures will generate when interacting with brands will enable companies to forecast demand for their goods- thus leading to much more sustainable businesses.
Today because of inequalities in supply and demand, advertising also performs a role for many organizations as a tool to shift stock people don’t naturally demand at that moment. The result is that a large proportion of advertising worldwide is focused on discount-focused communication, which is no good for the attention of the consumer, who feels deluged with pushy marketing messages, nor for the business, which struggles to keep the value in its brands and products.
There is a clear need for designers, manufacturers, wholesalers and retailers to get better at predicting what level of demand they will experience, as this will help them to create products that people really need, maintain the right level of inventory, and to reduce waste whilst maintaining the economic value in their businesses. The world of digital convergence creates a clear opportunity in this area through the appropriate use of data.
Every digital piece of communication creates a data point that can help companies to gauge levels of demand and interest, and this data mine will become ever richer as the 20% of advertising that is ‘digital’ will become 80% in the next 10 years. Combining social, search, location and interaction data will not only make marketing itself more efficient but will also help businesses to more accurately predict future demand.
Data will create some radically different and more sustainable business models.
– Convergence is shaping the future of communications, redefining the industry and changing the role of marketing as a function within business organizations.
– People, not devices, are driving convergence.
– The value of audiences and consumer segments will be driven by their Connected Cultures rather than shared demographics or psychographics
– The point of engagement and the point of transaction will converge, making the contribution of communications to a business much more visible, immediate and directly measurable.
– In the future the data that Connected Cultures will generate when interacting with brands will enable companies to better forecast demand for their goods creating opportunities to develop more sustainable businesses models.
– This will benefit people, business and society as a whole.