Digital transformation in marketing – transform or be transformed!
Digital transformation is a popular topic, but it manifests itself differently, depending on the industry and sector. Thilo Kölzer sees opportunities to extend or to transform marketing with technologies such as the Internet-of-Things, artificial intelligence and virtual reality.
It is likely that people think of digital transformation (DT) in various ways. Wikipedia Germany gives a short and succinct definition:
“Digital transformation is the effect of technical change on all aspects of human society and in particular business. Digital transformation is associated with the application of digital technology, which develops ever more capable platforms, paving the way for further new applications of digital technology.”– German Wikipedia
When you read this definition, you realise digital transformation is all around us, and has been for years. In marketing, we started replacing printed catalogues with websites over 20 years ago and traditional sales materials with tablet applications ten years ago. In recent years, apps have become so commonplace it is as though they have been around forever. In fact, we have been taking part in this process of transformation for years and have continually transformed ourselves accordingly.
And we will continue to do so. The last part of the definition is interesting: “…paving the way for further new applications of technology.” This means the constant disruption and replacement of established technology is an inherent part of digital transformation. The transformation has significantly gathered pace in recent years. Indeed, the pace has become so fast, the vehicles so numerous and its position in society so engrained, we need to always keep it top of mind.
Perhaps Diageo’s CEO Ivan Menezes said it best when he said: “It’s not about doing ‘digital marketing’, it’s about marketing effectively in a digital world.”
Digital transformation is replacing traditional business models
DT can affect practically everything in business, from customer communications, production processes, operational processes and internal communications, to the development of completely new business models. A current example: in the car industry, combustion engines are being replaced by electric motors. However, in DT terms a further aspect is more significant than the drive technology: the software in the car is becoming ever more important, while the hardware more secondary. Self-driving cars will only happen when there is the appropriate software. How powerful the drive of an e-car is will be reliant on which software version is installed, and no longer by cylinder capacity.
At the cutting edge of DT are companies like Tesla, Uber and AirBnB, who are all “turning inside out” traditional business models using digital processes and transactions. It will prove interesting how the “old economy” tackles the topic of digital transformation. Some are seeking the path of least resistance. For example, Neugelb Studios in Berlin – a spin-off of Commerzbank – has set itself the task of shaping the “financial services of the future”. I suspect that the think-tank at Commerzbank founded Neugelb as a fairly safe DT experiment. Why is this the path of least resistance? Because Neugelb is located far from its headquarters, where probably only a few members of Commerzbank’s permanent staff will work. The whole thing could fail without appreciable damage to the “Commerzbank” brand.
Nonetheless, it was not my intention to consider business models in general, rather to focus on marketing. At present, internal processes play a lesser role in marketing and sales-oriented organisations compared with the digital emphasis on customer experiences, digital added product value, digital multichannel, marketing automation, programmatic advertising, artificial intelligence and deep learning. All of these are topics under the great “transformation umbrella” whose expressions are capable of changing the way that customer experiences and customer contact are regarded, now and in the future.
This is article 1 of our “Digital Transformation in Marketing” series. The other five articles of the series cover the following topics: Internet-of-Things, Customer-Relationship-Management, Marketing Automation, Artificial Intelligence and Virtual Reality.
Our author Thilo Kölzer is a member of the board and responsible for Digital & Mobile, Performance Marketing and the Internet-of-Things at antwerpes ag.
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