[Posted by Ed Hadley
Senior Marketing Manager, Neolane, Inc.]
Last week, Eastman Kodak Co. filed for bankruptcy protection, becoming the latest victim of digital disruption. The 132-year-old company and photography icon follows the likes of Borders, Blockbuster, and numerous others who failed to adapt to changing times.
The reason: Kodak viewed digital as a threat to its lucrative film business. Instead of jumping in early like rivals Canon and Nikon, the company waited until it was too late. CEO Antonio M. Perez acknowledged that Kodak was five years too late to accelerate its shift to the digital age. The irony is that Kodak invented the digital camera in 1975, but shelved it because of the perceived threat.
We’ve seen similar storylines play out in the retail, publishing, music, media, and entertainment industries, all of which experienced disruption as consumers shifted their purchasing patterns and product format preferences to digital. Those who adapted and innovated thrived; those who didn’t died.
Speaking recently with a marketing executive in the publishing industry, it was clear this adapt-or-die imperative applies not only to products and business models, but to marketing. He said that many of his peers haven’t changed their marketing strategies in the wake of digital disruption; they’re still paying for offline advertising and co-op placement (in-store promotion), despite these channels being more expensive and less effective.
His marketing team, on the other hand, has followed the publisher’s content and customers to digital channels, focusing on acquisition and retention over awareness. Using Neolane’s conversational marketing platform, they’ve created a single database of record, which they use to build customer segments and communicate with target audiences via digital channels. He believes they’re much better equipped to market their titles in the new digital landscape. I think so too.
With content, customers, and communication all going digital, marketing budgets are quickly following suit. According to Forrester Research, interactive marketing (e.g. email, mobile, social, search, and display) will grow from 16% of total ad spend in 2011 to 26% by 2016*.
Marketers: your window is rapidly closing. Like Kodak, if you wait too long to embrace digital, you and your brand will get left behind.
* Forrester Research, “US Interactive Marketing Forecast, 2011 To 2016,” August 24, 2011