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DIGITAL TRANSFORMATION & DISRUPTION 2016 - Understanding digital landscape & marketing
The document discusses the state of digital transformation in 2016, highlighting the most disrupted industries, particularly in the B2C sector like media and telecom, and outlines key trends in digital marketing. It emphasizes the rise of disruptive business models, the growing importance of artificial intelligence in customer engagement, and the increasing need for efficient data management through customer data platforms. Additionally, it touches on the evolution of e-commerce, mobile marketing, and the use of content marketing to drive business growth.
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DIGITAL TRANSFORMATION & DISRUPTION 2016 - Understanding digital landscape & marketing
- 1. DIGITAL TRANSFORMATION & DISRUPTION 2016 Understandingdigital landscape & marketing 1 Lassi Nummi 10/2016
- 2. Digital transformation maturity stagesof organizations 2
- 3. Most digitally disruptedindustries • The most disrupted organizations were B2C, with media being the most disrupted and telecoms and consumer financial services close behind. • The most disrupted industries typically suffer from a perfect storm of two forces. • low barriers to entry into these sectors lead to more agile competition. • they have large legacy business models which often generate the majority of their revenue. • May result to cultural and organizational challenges when it comes to changing at the pace required. 3 https://hbr.org/2016/03/the-industries-that-are-being-disrupted-the-most-by-digital
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- 5. Google Controls 12Percent of All Global Media Spend • Five digital players—Google (est. 1998), Facebook (2004), Baidu (2000), Yahoo (1995) and Microsoft—collectively generated 19 percent of all global ad budget • Digital ad spend has grown 18 % every year for the past five years while spend across all other types of media has grown 0.6%. 5 59,62 22,45 19,7218,67 11,4910,04 9,61 9,57 7,895 6,86 6,42 6,12 6,11 4,83 4,62 4,57 4,58 4,12 4,08 0 10 20 30 40 50 60 70 Wordl’s largest media companies 2015 By revenue BILLION $
- 6. Media investments goingdigital 6
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- 8. How digital transformationimpacts business – the most common examples 8
- 9. Disruptive business modelsare attractive to investors 9 http://fortune.com/2015/06/17/airbnb-valuation-revenue/
- 10. And to GlobalBrands 10
- 11. New opportunities ofemployment ”gig economy” © F-Secure Confidential 11
- 12. Not only deliveringfood to your door
- 13. How we are connected? Worldof internet 2016 © F-Secure Confidential 13
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- 26. EU digital single market ©F-Secure Confidential 26
- 27. 27 EU digital singlemarket digital economy and society index (desi) 1. Connectivity 2. Human Capital 3. Use of Internet 4. Integration of Digital Technology 5. Digital Public Services 6. R&D Research & Development https://ec.europa.eu/digital-single-market/en/digital-scoreboard
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- 29. Digital marketing megatrends by SmartInsights 2016 29
- 30. Megatrend 1. Smartphoneusage skyrocketing 30
- 31. Megatrend 2. Soaringmessaging app popularity • There is a continued and growing wish for consumers to communicate directly outside of public social network pages. • This the last frontier for social media monetisation, so we can expect to see some major changes here in 2017 with new options for paid media on messaging apps, although this will be limited since the app owners have committed in the past to keeping messaging ad free. • Reaching and influencing consumers as they move from public social media to messaging will remain a challenge to businesses 31
- 32. Megatrend 3. ApplyingArtificial Intelligence to engage and service customers • Artificial Intelligence is now starting to deliver on its promise and have now developed to the stage where brands are developing bots that give consumer assistance. • Likely you’ll know about Apple’s Siri, Microsoft’s Cortana, IBM’s Watson, and the latest addition, Facebook’s Bot Engine for Messenger, which went live in April this year. Google too announced its assistant service at Google I/O 2016. • https://events.google.com/io2016/ 32
- 34. Marketing Technology trends •Marketing technology landscape getting organized, consolidated and more mature. • Low-cost, could based applications help marketers to automate routine tasks and enable real-time communications across different channels. 34
- 35. Megatrend 4. Therise of the Marketing Clouds including Automation and Programmatic • The biggest new trends in Martech surfacing in 2016 and important into 2017 as applying artificial intelligence and predictive analytics • There will be more consolidation as the marketing cloud build out their services and integrate different technology better. • Within marketing cloud solutions, there will be more emphasis on a newer approach to consolidate customer data from different first-party and third-party sources across the customer lifecycle. Related to this is exploiting this data through customer data platforms, predictive analytics. 35
- 36. Megatrend 5. Growthin Customer Data Platforms and Predictive analytics • Marketing techniques in digital marketing are quite established, and unlikely to change in coming 2 years. • Marketing automation services move to more use of automated lead scoring and grading based on algorithms rather than human-defined rules. • Combining 1st and 3rd party data and delivering relevant messages to right audience together with eliminating loss of inventory in paid advertising becomes important. 36
- 37. Megatrend 6. Mobile marketingand cross- device optimisation 37
- 38. Megatrend 7. Contentand Inbound Marketing • We have seen an ongoing popularity of content marketing as an activity businesses are focusing on to achieve growth. • Within content and inbound marketing, the ongoing discussions will be around getting the right balance of content quantity, frequency and quality and of course, measuring the Return-on-Investment of Content Marketing. • Less is more – longer in depth content? • http://www.smartinsights.com/content- management/managing-content-marketing/competing- content-marketing-infographic/ 38
- 39. Megatrend 8. LifecycleMarketing Optimisation • Lifecycle Marketing Optimization describes an integrated, data-driven approach to improve the effectiveness of interactions with customers on different devices and in different channels. • This marks a move away from optimising individual touchpoints such as Paid Search or Media, landing pages, emails and conversion pages in isolation, but instead views them as a multi-step, multichannel process. 39
- 40. Bonus: future? © F-SecureConfidential 40 • The latest Gartner 2016 Technology Hypecycle highlights many innovations which the mega platforms like Google and Facebook, are working on to integrate to their services • for example: • Augmented Reality • Cognitive Expert Advisors (described above as AI Chatbots) • Smart Data discovery (of which Predictive Analytics is one approach) • IoT integration including the Connected Home.
Editor's Notes
- #3 Digital transformation is the profound and acceleratingtransformation of business activities, processes, competencies and models to fully leverage the changes and opportunities of digital technologies and their impact across society in a strategic and prioritized way. We live in an era of "digital Darwinism," a time when technology and society are evolving faster than the ability of many organizations to adapt. Business as Usual: Organizations operate with a familiar legacy perspective of customers, processes, metrics, business models, and technology, believing that it remains the solution to digital relevance. Present and Active: Pockets of experimentation are driving digital literacy and creativity, albeit disparately, throughout the organization while aiming to improve and amplify specific touchpoints and processes. Formalized: Experimentation becomes intentional while executing at more promising and capable levels. Initiatives become bolder, and, as a result, change agents seek executive support for new resources and technology. Strategic: Individual groups recognize the strength in collaboration as their research, work, and shared insights contribute to new strategic roadmaps that plan for digital transformation ownership, efforts, and investments. Converged: A dedicated digital transformation team forms to guide strategy and operations based on business and customer- centric goals. The new infrastructure of the organization takes shape as roles, expertise, models, processes, and systems to support transformation are solidified. Innovative and Adaptive: Digital transformation becomes a way of business as executives and strategists recognize that change is constant. A new ecosystem is established to identify and act upon technology and market trends in pilot and, eventually, at scale.
- #4 Just over half of the respondents answered “yes” to the question “Do you have the right people to define your digital strategy?” It might be hard for people in HR to hear, but only 20% of those who responded said that their HR function was enabling them to transform, ranking them even lower than finance — an area not exactly known for its agility. At the other end of the spectrum, the industries that are least disrupted often have perceived higher barriers to entry, and a smaller part of their business that can be digitized. They are less affected, but not immune. Advances like 3D printing and EdX, the joint venture between MIT and Harvard, mean that even industrial production and education are seeing disruption, and are also having their own incumbents lead the disruption. Culture. You can’t talk about digital without also mentioning its lifeblood — data. The link between the impact of data-driven organizations and culture may not be immediately apparent, but through interviews with senior leaders, we have seen that data quickly shifts the power structure in an organization. Decisions that had previously been deferred to those with years of experience and “a feel for what the customer wants” are now being challenged with data. And whoever has the data has the power to make strategic decisions. Organizations that foster a culture of making data-based decisions will be in a stronger position to weather the changes ahead. Commitment. Digital should be built into the core strategy, systems, and processes of an organization. We see this in the recruitment of digital directors at the board level, which has risen steadily over recent years. Now, 23% of the largest 300 companies in the world have at least one Digital Director. Again, you can’t become a more digital company without the right people leading the charge.
- #6 Alphabet controls 12 percent of all global media spend, which primarily comes from Google and YouTube's ad sales. The company collects $60 billion in U.S. ad spend—a figure 166 percent larger than No. 2 ranking The Walt Disney Company. To compare, Google's ad revenue was 136 percent larger than Walt Disney last year. Alphabet's overall ad revenue is up 17 percent year-over-year. Five digital players—Google, Facebook, Baidu, Yahoo and Microsoft—collectively generated 19 percent of all global ad budgets. And when looking specifically at digital money, the companies make up 65 percent of Internet revenue globally, with $88 billion in ad sales in Facebook in particular continues to become an advertising juggernaut. The social network jumped from No. 10 in 2015 to No. 5 this year, making it the fastest-growing company on Zenith's list with 65 percent year-over-year growth. Chinese Internet company Baidu is the second fastest-growing company, with ad revenues up 52 percent.
- #7 Worldwide ad spending will reach $674.24 billion by the end of 2020, with annual gains hovering between 5% and 6% Spending on paid media worldwide will climb 5.7% in 2016 to $542.55 billion, propelled by increased investments in digital advertising. This is lower than eMarketer's previous forecast, but still represents accelerated growth when compared with 2015 (5.0%). North America will remain the No. 1 advertising region throughout eMarketer's forecast. Outlays will grow 5.0% in 2016—marginally below the global average of 5.7%—totaling $202.38 billion, or 37.3% of global spending. Asia-Pacific will be the second-largest region with $171.51 billion, or 31.6% of global paid media spend.
- #8 50% of the time spent in media is online. This guides the investments.
- #9 1. The world’s largest taxi company (Uber) owns no taxis In just a few short years, Uber has grown to become a ubiquitous app in cities around the world that allows consumers to order a taxi at the tap of their smartphone screen. Despite local battles with city councils and taxi unions around the world, it is estimated that Uber will generate $10bn in revenues by the end of 2015 2. The world’s largest accommodation provider (Airbnb) owns no real estate Established in a San Franciso apartment by a group of friends who had the idea of creating a B&B using their only asset, an air mattress, Airbnb has taken the accommodation world by storm by enabling house and apartment owners to generate additional income by renting out their properties for nights and weekends. The idea has skyrocketed and Airbnb is now a popular alternative to staying in hotels. Valued at $25.5bn, Airbnb is estimated to be worth more than hotel giants Marriott ($20.90bn), Starwood ($14bn), and Wyndham ($10.01bn). Hilton Worldwide is valued at $27.7bn. 4. The world’s most valuable retailer (Alibaba) has no inventory Alibaba can be considered China’s answer to Amazon. It was set up in 1999 by a former school teacher called Jack Ma, originally as a business-to-business portal. By 2012, the site was handling more than $170bn worth of sales and by last year, when the company went public on the New York Stock Exchange, it netted $25bn in the biggest IPO in history. Unlike traditional retails chains, Alibaba doesn’t have retail premises and nor does it carry any inventory, rather it simply facilitates the exchange of goods for money. 5. The most popular media platform (Facebook) creates no content That’s right. Facebook, which was established in a Harvard University dorm just 10 years ago by Mark Zuckerberg, is pretty much the front-page newspaper for some 1.5bn people around the world. Modelled on a hacker culture with coding at its heart,
- #10 2015 Airbnb revenue: 900 Million USD with 150 Million euros operating loss Estimation for 2020: 10 Billion ?
- #15 46% of the world’s population is connected Global annual growths: +10% - internet users yoy +10% social media users yoy
- #16 Modern / western counties are well connected
- #17 Number of visitors still from Asia and Africa, the growth is high. Middle east and africa are growing the fastest at the moment,
- #18 This growth is happening on mobile.
- #19 Growth is happening in mobile advertising
- #20 Lost opportunity in mobile advertising,this is to trend !
- #21 In developing markets they are skipping the desktops and going directly to mobile usage of internet.
- #22 Mobile already 40% of all traffic Ios 19% Android 66% Others 15%
- #24 What comes to e-commerce, the growth is double-digit. 26% of internet users buy online Globally almost 20% growth 3,11% of global GDB is e-commerce, 7% of total retail happens online.
- #25 China has overtaken us as the largest Ecommerce country together with us they acocunt nearly 60% Biggest markets, US, UK, China and japan.
- #26 In Europe UK has dominant share of e-commerce, followed by France and Germany. UK 157 billion euros France 65 Billion euros Germany 59 Billion euros Italy 16,6 billion Netherlands same size than italy Sweden 9,7 billion. Finland 7,2 billion Poland 6,5 billion (2014)
- #28 1. The Connectivity dimension measures the deployment of broadband infrastructure and its quality. Access to fast broadband-enabled services is a necessary condition for competitiveness. 2. The Human Capital dimension measures the skills needed to take advantage of the possibilities offered by a digital society. Such skills go from basic user skills that enable individuals to interact online and consume digital goods and services, to advanced skills that empower the workforce to take advantage of technology for enhanced productivity and economic growth. 3. The Use of Internet dimension accounts for the variety of activities performed by citizens already online. Such activities range from consumption of online content (videos, music, games, etc.) to modern communication activities or online shopping and banking. 4. The Integration of Digital Technology dimension measures the digitisation of businesses and their exploitation of the online sales channel. By adopting digital technology businesses can enhance efficiency, reduce costs and better engage customers, collaborators and business partners. Furthermore, the Internet as a sales outlet offers access to wider markets and potential for growth 5. The Digital Public Services dimension measures the digitisation of public services, focusing on eGovernment. Modernisation and digitisation of public services can lead to efficiency gains for the public administration, citizens and businesses alike as well as to the delivery of better services for the citizen
- #29 Desi index in european countries. Northern europe and UK leading, eastern and soutthern europe lagging behind.
- #31 While growth in North America and Western Europe is reaching a plateau, extrapolating trends from Asia shows future expansion. More than 50% of searches are on mobile 91% of Facebook usage (Daily Active users) is on mobile 80% of Facebook advertising revenue is on mobile 90% of mobile media time is spent in apps
- #32 From Facebook's Mobile Messenger through Facebook's acquisition of WhatsApp and rebuff by Snapchat to the popularity of apps in non-Western markets like WeChat, there is a continued and growing wish for consumers to communicate directly outside of public social network pages. This is really the last frontier for social media monetisation, so we can expect to see some major changes here in 2017 with new options for paid media on messaging apps, although this will be limited since the app owners have committed in the past to keeping messaging ad free. So, reaching and influencing consumers as they move from public social media to messaging will remain a challenge to businesses, but as this next trend shows, there will be new options for reaching consumers via messaging.
- #33 20% of google searches are audio queries. 65% of smartphone users in US are using voice assistants. Google’s assistant now Understands conversation and context. Baidu in chinese is growing exponentially.
- #38 Most businesses now get the basics of mobile marketing right. They provide a responsive website design, meaning that their site is 'mobile-friendly' in the consumers AND all-seeing Google's eyes. The trend in 2017 will involve optimising mobile experiences which may mean providing more tailored experiences for different devices through an adaptive design. It will also mean making detailed optimisations needed to encourage conversion on devices. Some of this may be forced as the recent Google move to reduce rankings of sites using pop-ups on smartphone from 2017. The reality is that while smartphone use is overwhelmingly popular for some activities such as social media, messaging and catching up with news and gossip, the majority of consumers in western markets also have desktop (and tablet) devices which they tend to use for more detailed review and purchasing. So we need to think about strategies to engage the Multichannel Majority not just 'smartphone adoption
- #40 Lifecycle Marketing Optimization describes an integrated, data-driven approach to improve the effectiveness of interactions with customers on different devices and in different channels. This marks a move away from optimising individual touchpoints such as Paid Search or Media, landing pages, emails and conversion pages in isolation, but instead views them as a multi-step, multichannel process. Customer data platforms which helps integrate data from different marketing technology vendors into a single place to understand the customer journey and the value that different touchpoints contribute.
- #41 On the Rise marketing trends General-Purpose Machine Intelligence Ad Blocking Customer Data Platforms Real-Time Marketing [that's personalisation, not Real-time PR] Personification Programmatic TV Advertising Cross-Device Identification Virtual Personal Assistants Programmatic Direct Advertising Definition - What does Software-Defined Security (SDS) mean? Software-defined security (SDS) is a type of security model in which the information security in a computing environment is implemented, controlled and managed by security software. It is a software-managed, policy-driven and governed security where most of the security controls such as intrusion detection, network segmentation and access controls are automated and monitored through software. Techopedia explains Software-Defined Security (SDS) Software-defined security is typically implemented in IT environments that have minimal or no hardware-based security dependence, such as cloud computing and virtualization infrastructures. Each new device created within the environment is automatically covered and controlled under the base security policy. This also ensures that the security reach and scalability of the underlying environment moves with the increasing infrastructure/environment resources. Moreover, being software-defined and managed security, environments can be moved or migrated within other data center/IT facilities without affecting the security policy and controls in place.