With the disruptions of Amazon and other platform companies, marketing is shifting away from communications and advertising, and toward the design of experience. Publicis’ Chief Growth Officer Rishad Tobaccowala spoke to WARC’s Lena Roland about platforms, privacy and data protection that are critical to the future of the industry.
In February, you said that "We're going to, increasingly, have less and less advertising,” what will take its place? How will brands communicate with new – and current - consumers?
The opportunity in the United States to reach people through interruption will decrease significantly. This is because a) online and on mobile, people have found ways to avoid advertising, b) there are more and more ad-free or reduced ad environments such as Netflix, Hulu, Spotify and others and c) networks and platforms are trying to reduce ad load since they are finding their viewers are skipping or switching off. The decline in advertising opportunities will lead to new ways to engage consumers.
First, in ad environments the publisher/network will work very closely with marketer and advertiser to marry content and media to create stories and engagements that are fewer, deeper and hopefully more impactful and effective. What we lose in frequency we make up in impact.
Second, marketers will increase interactions throughout the consumer journey by spending money on great utilities and experiences that satisfy or delight consumers. This could be improved customer service, ability to see or interact or participate in new cultural or educational experiences and other ways.
Marketing as a service will grow more important while advertising as communication less.
You have spoken about direct-to-customer strategies gaining in importance, why is this?
There are three reasons it is imperative that marketers sell and connect directly with Consumers.
- Data and knowledge: Direct communication ensures that the marketer gains more insights and perspectives on what matters and what does not and who to engage with and whom not to.
- Control: Selling only through platforms or retailers means the customer relationship is owned by an intermediary who can then use their link and loyalty to switch your customer to someone else.
- Consumer Benefit: People sometimes want to connect directly with the brand to not just understand who is behind the brand but to get better pricing, faster service and have their voice heard.
Major CPG brands are setting ambitious goals for DTC sales in future – what challenges do they face in meeting these targets?
The biggest challenge that CPG marketers face are:
- Skills and expertise: Moving to a direct business is different than a non-direct business. These include learning how to bundle products, think subscriptions versus transactions.
- Channel Management: How to ensure that they are omni-channel and their retail customers and other channels are well looked after since they will always be important.
- Economics: Direct selling has costs and economic challenges that are different than offline.
Dollar Shave Club, acquired by Unilever in 2016, has become a poster boy for the DTC trend, would you agree that its success is based on its competitive price-point and convenience? What does it tell us about branding in 2018?
Branding remains important and brands are valued. However, the way brands are created is different today than in the past. In the past a brand could be created through distribution heft and media spending might.
Dollar Shave Club has been successful in three ways. First it made money for its investors in that it sold for a billion dollars. Second, it showed there were new ways to build and market brands and, third, but most important it delivered a significant benefit to consumers to gain a double-digit market share of blades with limited spending.
Dollar Shave Club was built on innovative uses of You-Tube Media, direct distribution and word of mouth plus sampling. All these innovations are only possible in a digital connected age.
It also means that brands who used to have moats against competition such as retail slots or advertising inventory can no longer rest easy.
Is the DTC model an option for brands to become better competitors to the big platforms of Amazon, Google, and Facebook?
I do not believe a brand should compete with Amazon, Google and Facebook who are retailers, platforms and media companies but brands should ensure they are not controlled by these three.
If these brands control the data and all consumer linkages in the digital world which is the world that is growing it will reduce the power of brands.
Brands should use all of these platforms - and others - but they need to remember particularly in the case of Google and Facebook they are the customer of these platforms and should be treated as a client rather than a supplier.
What’s your view on the forthcoming General Data Protection Legislation (GDPR)? Is it a game changer for the future of marketing?
GDPR is very important in that if companies fail to comply they will be at significant monetary and legal risk. It is imperative that legal, financial, technology and marketing folks at every client and agency become aware of this and that clients have Chief Data or Privacy Officers.
GDPR is part of several game changing moments that are going to occur at the same time. First, there is a growing realization that the concentrated data power of the platforms is creating significant competitive and societal challenges. Second, there is the growing realization that privacy and ownership rights of data will define the future of marketing and brands since it is about trust and transparency.
In the wake of a renewed conversation around privacy, how should brands approach privacy concerns when dealing with consumer data?
Companies like Drawbridge have left the EU since they do not want to be at risk with the new rules. Brands are about trust and sharing my data with a brand is about trust on how they leverage and use it. As the recent Facebook Cambridge Analytica controversy indicates, privacy and data sharing are critical for the future. As I have noted it is essential to have Chief Data or Privacy Officers and to have all the stakeholders aware of the rules and regulations and do’s and do nots.
Do you see a shift back to the trusted contexts of more traditional media?
I see a belief in marketing rising. Philip Kotler said marketing is understanding and meeting customer requirements. The digital world allows us to understand and meet customer requirements for speed, transparency and price discovery in ways that traditional platforms did not allow. On the other hand, high quality contents, physical environments, customer services and experiences will matter more and more. We are seeing the renaissance of marketing but the decline of interruptive frequency and spreadsheet driven advertising.