Summary: A clash of cultures between traditional marketing conventions and enterprise software getting more involved in digital branding infrastructure is going to result in friction and sparks. The prize is modeling and transforming the future top global brands...
In the old world last century, giant global advertising holding companies such as WPP Group, Omnicom, Publicis and Interpublicwould buy up successful up and coming marketing and advertising firms, effectively owning all the contenders in the race to supply brand advertising through traditional media channels.
Control the best creative output and media buying effectiveness and you effectively own the entire media buying vertical and a few percentage points/vigorish of the media spend was the old world paradigm.
In the space of a few days this model has been encroached upon with large enterprise software companies buying media branding companies: Oracle bought Vitrue ('The Vitrue Social Relationship Management (SRM) Platform Makes Brands Social') and Salesforce have just announced the acquisition of Buddy Media ('A robust suite of products designed to help brands build and maintain relationships with consumers to accelerate their business').
It's a measure of how rapidly the world is changing that digital infrastructure vendors should feel the need to buy branding support companies, an apparently unrelated area, but it makes more sense when we consider the transition from the 'social media' marketing island to the digital transformation of companies to put dialog with customers front and center of their entire operation.
Digital transformation is of course a rapidly mutating area with mobile, the web and the 'social' app economy evolving against the constraints of global recession. Huge changes in use patterns of digital technologies are occurring globally and some very powerful incumbents in both the enterprise and media worlds are struggling to transform themselves to be relevant and valuable in an as yet unclear future.
The way in which employees inside large brands collaborate has been the principle subject of this blog for the last four years; in my experience most companies are still largely trapped in a siloed document/filing/postal model of working together that is deeply ingrained in the way they work, a digitized version of the typewriter era. This is even true in technology companies, but there is no question the juxtaposition of the ways we personally use devices such as the iPad and social network services is eroding the old ways of doing things.
Social Media has until now effectively been the relatively short term domain of marketing budgets to exploit interaction with prospects and customers in the digital world; we're about to enjoy/endure the first 'social media' Olympics this summer for example.
Buddy Media and Vitrue, like the timeless advertising holding company strategies, are designed for rapidly changing digital media - they have to look beyond today's hot locations Facebook, Twitter, Google+ et al to life beyond 'Social Media' and to a world where sophisticated enterprise cloud infrastructure supplies all aspects of a company's tools. SAP's old line 'The suite always wins', and Oracle's philosophy of turning the best innovation ideas into features of their products (or 'embrace and extend' as Microsoft would say) is being extended to include marketing functions in the portfolio.
As I write this today Blackberry maker RIM and Facebook are falling from favor in the financial markets. RIM's inventory of unsold BlackBerry handsets and PlayBook tablets grew to more than $1 billion in 'value' last quarter, a stark demonstration of how quickly the world changes if you don't…
Salesforce continue to enjoy the support of the financial markets and are a well oiled global marketing machine selling their social enterprise concepts with great clarity and effectiveness; it's not hard to see the logic of their adding Buddy Media to their end-to-end platform. Oracle, despite their disciplined Fusion cloud transformation execution, are in a tougher spot due to their on-premise database vendor incumbent status.
It seems unlikely that the big advertising holding companies will buy into enterprise software but anything is possible in the topsy turvy world we live in. Simplistically, branding advertising is still mostly TV & Radio spots, billboards and magazine ads with a digital component added to below the line sales promotion and interactions, but that landscape is changing fast, with mobile the big challenge.
To thrive, the modern business entity needs to provide visibility and interaction with their prospects into all areas of their operations from design to supply chain to branding, product launch and customer relationships (within the constraints of pre launch product secrecy in the style of Apple). The reality is that most firms are very siloed with completely different levels of focus, intent and enthusiasm for this sort of thinking depending on departmental and divisional function.
Solving internecine conflict between silo fiefdoms is highly political, as I have experienced in my role as a collaboration consultant, which can feel like a cross between King Solomon and family therapy inside firms at times. Enterprise software companies are great at providing tools they sell as end to end solutions/suites, but the reality is the last mile is all about politics and people, and this can't be buried under a simplistic social veneer.
Having said that I believe there's real promise in these latest media channel developments. It's going to be fascinating to see how the old line media firms react to the enterprise software world encroaching into their business world. What the next wave of digital media looks like as we move on from the first generation of mass market social networking experimentation and habits into a more nuanced digital space that more accurately reflects human civilization, social mores, etiquette and interactions is the real prize though.
Whoever is geared up to unobtrusively participate in those sophisticated digital interactions with prospects and customers, while monitoring and analyzing the entire digital landscape, will control the global high ground in product brand marketing. This is going to be fascinating to watch….
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2008 phone advert image from dialaphone.co.uk
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