• Dan Truman

The Digital Future - Are you sure?

Potential blogging subjects are often quoted as "If you've spoken or thought about a topic 2-3 times in the past few weeks, people will want to know about it".


Ok, well this is trodden ground, but here goes.


I'm not sold on the potential of the digital future (worrying implications for a lot of people, myself included).


It was headed there, but I see some roadblocks coming.


Below I've listed out some of the biggest and caveated where those implications might take us in the future:



Legislation

The big one - the way that browsers and advertisers use data across the web is changing. Mostly due to ITP that was developed and implemented by Apple, but other browsers are starting to follow suit.


It has huge implications for a lot of different verticals - web analytics, digital marketing, website personalisation and a whole host of other downstream functions reliant on the data that was being provided prior to ITP.


Companies will go out of business due to the changes - data aggregators for advertising purposes (DMPs mostly likely) - or at the very least be forced to reposition and change their technologies rapidly.


The way that businesses operate will have to change dramatically due to this new legislation. Already we are seeing countries like Germany look for Digital Law specialists to understand the possibilities and legalities of certain business processes.


Businesses developing internal metrics or functions based on values collected using cookies will see these services limited in capability and accuracy, as well as increasing the frequency and investment needed to maintain them.


Publishers and advertising vendors are going to have to come to an agreement on how best to tackle these new governances, as without a solution, their business will be significantly hampered, as shown below.



Diminishing returns

Digital marketing has become the highest share of marketing spend very quickly - you can see in the chart below the activity has raced forwards, even in the 6 years since 2014.


Mostly, this is due to the ability of advertisers to produce clear and associated metrics to determine the performance of a campaign.


If a board member has to make decisions for budget to be approved for the next financial year, and there are endless reports and metrics of performance that can be directly correlated to investment, that option will see more and more investment.


But there's a tipping point for every trend. And there will be one for digital marketing investment too.


There is also a saturation point - there are a finite number of potential customers for advertisers to reach - demographics and regions that are not reached by digital will remain that way for the time being.


The halo effect of digital advertising is not as measurable as the direct campaign performance that brought the original investment - the long term econometric campaigns are hard to assess and their contribution difficult to maintain without becoming wallpaper to prospects.


With the data limitations mentioned above as well as existing changes such as Google removing DoubleClick ID's due to their granular nature, there is soon going to be less and less to deterministically understand the value of a digital campaign.


The very compelling business proposition of marketing investment followed by marketing metrics will be broken.


Attribution studies have been heralded for a long time as the way to find the highest contributions made by all campaigns, but soon those will be removed.


Advertisers will be left with incrementality tests and historical proxies to generate implied contributions made by campaigns and channels - this is a significant weakening from the position of direct correlation.


Vendors are rushing to develop strategic positions that strengthen that relationship and offer the same level of comfort and faux security that businesses have become accustomed to in the digital age.



User privacy/wariness

Alongside the whirlwind happening in legislation and business operations is the alert that users and consumers are being made heavily aware of their data and digital security.


Not necessarily a bad thing, but definitely one that changes the dynamic of current digital agendas significantly.


Previously, there was implied agreement between user and company that the data users were offering (willingly) would be used in their best interests.


With the new legislations there have been heightened media attention focusing on privacy almost imploring users to think more clearly about where their data is being used. In theory, this isn't a bad thing, but as with a lot of theory, the practice is never as clear cut.


It presents significant challenges to businesses looking for the incremental conversion rates that will drive their digital transformation and actually acts as a hinderance towards moving into a 21st century business model. Indirectly, it results in businesses retaining costly practices of retail or call presence due to lack of robust digital structures to transition to comfortably.


The awareness of users privacy and their abilities to protect it are excellent initiatives. The fear-mongering and public perception of digital data that has followed are very important sub-plots, as they represent real challenges to businesses.


Cookie consents are omni-present across the web, with customer experience actually hindered rather than helped. Users are being overloaded with first-party data requests in order to counter-act this, they're constantly being reminded to refresh details and login.


If this was meant as an improvement to customer experience, it is failing.



Technology overload

If you've made it this far into this post, you may also feel it. Overload.


Users are simply constantly online. And unless that digital experience is revolutionary, soon there will be real dissonance and active stances made to avoid it.


The current pandemic does not help - with a lot of workers currently using video conferencing from home to replace former office meetings, the days sitting in virtual meetings can feel very long.


Already there are numerous business opportunities springing up from public desire to reduce screen time:

  • Digital wellbeing apps

  • Escape holidays

  • Dead zones in bars / pubs

  • Social media shaming

Over the course of time, these will become more widely adopted and understood.


There are numerous studies showing correlations between screen time and mental health complications and issues, so as more people start to take notice and action there will be a reduced digital audience for businesses to market to.


Personalisation attempts

This is probably the weakest of the changes I see coming - because frankly, its not really got going yet.


Companies are attempting (and I emphasise that) to give users and customers a 1-2-1 relationship with their brand, at scale.


For the most part, it is not working.


There are numerous reasons, but a few examples might be:

  • The experience with the brand is outdated to base assumption on

  • The knowledge of customer is too limited

  • The data cannot be connected

  • The execution of personalisation fails

  • The product experience is not designed to be 1-2-1

  • The marketing channel is not designed to be 1-2-1

  • The personalisation becomes creepy

  • The personalisation is not value-adding

There are examples of these all over the web - they won't be provided here.


The interesting question to ask is, is all of the investment that it takes to deliver a fully personalised customer journey, actually beneficial?



As mentioned at the beginning of this post, it may be well-trodden ground, but there are some thoughts that had been on my mind for a while and it felt cathartic to jot them down.


It will be interesting to see the developments in this space over the next 12-18months, as potentially, there is the first big shift in online advertising in 20 years.


Any thoughts or questions welcome in comments or direct to me on LinkedIn or Twitter.


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©2020 by Dan Truman.