J. Walker Smith writes: Digital technologies have turned marketing upside down, but not by revolutionizing the fundamentals. The core principles of marketing remain the same. Instead, marketing research has moved closer to the action than ever before.
The traditional cycle of research and marketing is one of “study, act, study.” Data precedes decisions, then the impact of decisions is assessed before the next decisions are made. Each step of the way, research is the gate through which decisions must pass.
With the rise of digital technologies, cycle times have been compressed. The old starting point of “study” has become a luxury few marketers can indulge. The new digital cycle is one of “act and react.” “Act” not “study” is now the point on which everything else pivots. And so research in the digital age has shifted from “study” to “act,” thereby moving closer to the action.
Learning on the go
So, research is changing to match today’s fluid purchase process. Answers are needed in real time. “Good enough” is, well, good enough. Marketers learn on the go, testing alternatives by doing not by asking, in the marketplace. The spotlight is more on how consumers behave than on what they think. The premium is on the analytics and storytelling that make sense of the flood of data.
This shift in marketing is being intensified by a parallel pivot to passive in consumer and commercial digital technologies. Whereas previous advances in digital technologies usually required active consumer engagement, the coming wave of passive digital is different. Sensors, not screens, will be the interface by which marketers connect with consumers.
Wearable technologies might be catching the headlines, but passive digital runs deeper: think of Amazon’s anticipatory shopping software, or Apple’s iBeacon that mines data from and pushes alerts to nearby iPhones, or Foursquare’s shift from active check-in to passive location awareness.
In this passive digital world, the new consumer value proposition is less about the customized fit that consumers actively demand, and more the predicted fit that marketers calculate from passive digital data streams. Eventually, this will be accomplished by algorithms embedded in the data flow of a self-learning system that runs itself. Marketing agency will reside not in brand managers, but in algorithms that analyze continuously collected passive data streams to make real-time adjustments in marketplace execution.
If this sounds futuristic, it’s here already: the real-time pricing of ad insertions for content about to go viral, or in-progress updates to customer service scripts based on real-time analytics of caller language and tone of voice, or dynamic retail pricing based on real-time demand and environmental conditions like temperature.
Insights and big ideas aren’t less important, but they are no longer enough. Behaviors, it’s said, are more honest, so big ideas must find their payoff in what consumers do. The future of research is about a new metric of success rooted in a new digital cycle, closer to the action.
J. Walker Smith is Executive Chairman of The Futures Company. He tweets at @jwalkersmith. A longer version of this article can be found in the June edition of Marketing News. The image at the top of this post is from digital camera HQ, and is used with thanks.