Marketing applications are lagging way behind

“Nearly every business application now has its equivalent offered over the internet”, Nicholas Carr, “The Big Switch”, page 72.

Except marketing most applications.

There is almost no application that you can not find online. You can find accounting applications online. You can find sales applications. You can find customer management systems. Word processing, spreadsheets and presentation software were once the domain of Microsoft Office. But now you can use Google Docs or a host of other competitors to accomplish the same tasks in a Cloud Computing environment. One of Google’s aims is to ride the trend of digital convergence (See the April 18th Blog) to overtake Microsoft Office.

How many marketing applications can you name that exist on the internet? How many are available for the advertiser to use? You can find email applications and basic tracking applications. In the last few years online tools such as Google’s Adwords and Yahoo’s Overture have made major impacts in online advertising. But what about traditional media buying? What about ad production, creative, media planning, asset management, ad research and everything else needed to create a message, communicate it to potential customers and track the results?

According to Peter Drucker, The “Father” of Management, there is nothing more important for a business than marketing -
“Because the purpose of business is to create a customer, the business enterprise has two--and only two--basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business."

If marketing is so important to a business, then why does it seem that the applications associated with marketing seem to be father behind than any other part of business?

There are many historical reasons and I would invite you to comment on them here. Without diluting the conversation too much, let me suggestion that one reason is that it wasn’t possible to imagine the scope of the entire process of marketing with limited systems that have access to limited information until recently. With the Cloud, this can change. Petrabytes of information exist out there on every customer, every ad and every creative piece ever created. This information is actually the basis of value for most “Internet” companies. Microsoft’s bid of $44.6 billion for Yahoo! was not for computers and software. It was for their information. By leveraging the information from MSN, Microsoft and then Yahoo!, they will be able to produce models that are an advertisers dream. Microsoft’s recent purchase of aQuantive for $6 billion in cash was with the sole purpose of maximizing the value of Microsoft’s information. By producing their own Cloud and systems, they are betting that they can target the right messages to the right people – the “Holy Grail” of marketing.

Google is certainly not laying down. It is reported that they recently opened a Cloud Computing center in Oregon that houses hundreds of thousands of computers to operate the Google Cloud dedicated to maximizing their information for the benefit of those who drive their revenue – advertisers.

This consolidation of information and power is a very real threat to the traditional brokers of power for advertising, the advertising agencies. Founder and Chairman of WPP, Sir Martin Sorrell, has been vocal about his companies friend and enemy (“frenemy”) status with Google. Every time Google opens Adwords to another media type, it steps on the toes of those who used to control this area. Google now does newspapers and radio. Can magazines, television, cable and outdoor be far behind?

Cloud computing is already changing the landscape of marketing. Companies that can adapt and take advantage of the power and cost advantages offered by companies like Google, Microsoft and MRG-International (My Company) will enable their businesses the competitive advantages mentioned in the previous blog: cost, power and intelligence,

Here’s our example of Cloud Computing for marketing.
MuseWorx, the Marketing Operating System is the first application of its kind designed to bring Cloud Computing to marketing applications. Hundreds of service providers are lining up to integrate their marketing applications into MuseWorx to give their customers the advantages of automated services. MuseWorx has no limits. It is expandable to any size and the supporting server farms are growing exponentially. MuseWorx is growing. Marketing Service Providers from every spectrum of advertising are plugging in their services for MuseWorx users…expanding the intelligence of the system. MuseWorx is global. Already it is used in 77 countries representing hundreds of thousands of committed users.

The scale at which MuseWorx is growing and reaching is the scale of the Cloud. Cloud Computing as a concept is not new. It is however timely. Marketing applications will catch up to other forms of business applications online. They may even pass them in significance soon.

The driving forces of Cloud Computing

Besides the overall 4th wave trend mentioned in the last blog, what are the business drivers for Cloud Computing?

There are three primary driving forces for adoption of the Cloud Computing model:

1. Cost – ultimately it will be cheaper to provide centralized services from large computing centers than for companies to reproduce the services and personnel themselves. This will threaten a part of the IT department. It will produce reduction in costs that will be too great to ignore. IT is currently a major portion of the cost of corporations. If this could be cut in half, or, get this, by 90%, the cost savings will be too great to ignore.
   The challenge here is existing investments and infrastructure (More on this in a future blog)
   
2. Power – the ability to link, hundreds, thousands, or even hundreds of thousands of computers together to perform tasks is computing power that even the largest supercomputers can not rival. In one example, the New York Times recently used Amazons Cloud Computing service to create PDF versions of hundreds of thousands of documents in only a few days. This would not have been possible internally. As we reach out and embrace information on the internet, we are not longer talking about Megabytes or even Gigabytes. Our clients are demanding Terabytes and to do so, we have to provide multiple Petrabytes of storage (yes, 1000 terabytes). Try to order that from Dell next time you order!
   The challenge here is trust. Businesses have to have standards that they trust for their information. (More on this in a future blog)
   
3. Intelligence – Can you say Skynet? Arnold would be proud. I could have called this one Automation or even Ease of Use. They amount to the same goal of having system in the Cloud Computing environment that makes things easy and powerful for the user. It will begin to resemble intelligence as decisions are made that we begin to trust and rely on. Most Cloud Computing systems are new and rudimentary in their approach. Using Amazons system is for programmers only. Not much Cloud Software exists to open it beyond its current ability. This will change. Certain systems like Google docs and, if I may be so bold, my own companies Marketing Operating System, are a little more mature in their user interfaces and begin to embrace the intelligence promised by the cloud.

Each one of these will be too much for businesses to ignore. Together, they are the next wave in technology and will transform the business landscape for many years to come.

The Fourth Wave - A change coming for 10,000 years.

In the 1980’s I picked up a book about societal changes called Megatrends by John Nesbitt. This was a real eye opener for me and for my students. I used it to teach computer science classes at the University where I live. One of his major premises was that society has gone through three major changes in its entire 10,000 year history:

1. Hunting and Gathering Society – tribal way of life, thousands of years
   
2. Agricultural Society – People began to plant, cultivate and herd animals. Society changed and this lasted for a several thousand years.
   
3. Manufacturing Society - In the 1600’s through the 1950’s, society learned how to manufacture products, created machines and factories. This gave rise to the first major cities and for several hundred years, society evolved.
   

Information Society – from the 1950’s until today, information workers began producing something of value that is still changing society. Information became the true power in the world and information workers have replaced manufacturing workers in numbers since the mid-80’s.

It’s a wonderful book even today. We are still in an information society. We are now however entering the Fourth Wave of his major trend. This new trend is the subject of this blog and somewhat where I will take exception with Nicholas Carr. Cloud Computing is a byproduct of the major trend in society today. It is a trend that has just started and will last for 16 years.

16 years?

Starting in 2008 and lasting until 2024, the process of connecting the physical world with the digital world will forever change the way we connect to technology, receive information and connect to each other. Let me explain.

In computing, there have been three major revolutions:

1. Mainframe computers in the 1950’s and 60’s
2. PC’s in the late 70’s and 80’s
3. The Internet in the 90’s

Each of these revolutions impacted not just computing, but society in general. There is not a person, nor a business that did not feel the impact. Even if they never touched a computer everything around people changed. So in a way, although these were brought about by chips and computers, they were really about society accepting these changes and making them a part of their everyday life.

According to Forrester Researches CEO, George Colony, the fourth wave is about connecting devices to people. Today we still see the computer as the information source. The internet, the cloud, is changing all that. Cloud Computing is part of this trend. According to Colony, there are currently about 2.5 billion devices connected to the cloud. In 8 years there will be over 14 billion. Our watches, our car tires, our health equipment, our climbing gear and much more will be connected. Even today the iPhone is revolutionizing the way people receive information. They are not connected to a traditional PC. They are connected to the cloud and get their information right on this device. As this wave continues, the information we receive will be more natural and integrated into our daily lives. This “connection” changes society once again.

It will take time to work these changes into society. At some point these are generational changes. For instance, my kids grew up with TiVo. For them, they do not understand live TV and why we can’t fast forward commercials. It doesn’t compute. Their expectations will drive change and social acceptance of the changes. They wonder why we can’t rewind the radio, why they can’t play online games in the car and why they can’t have TiVo in the airplane.

Nesbitt put forth a truism that applies to all this change – “Society can only change as fast as people allow it.” The example in the mid-80’s was cash. It was possible even then to do away with cash and create a cashless society. There were clear advantages, but it did not happen. Although we’ve made significant progress towards this, it still has not happened. A trend exists, but this trend is slowed by the desire of people to be in control. We want to write checks and decide who to pay and when. We want to control the process…so the trend slows…but does not go away.

We can control the pace as a society, but the trends exist. Our physical world is being connected. In the early days of computers, the trend was for technology to depersonalize us. We felt as a society that we were being treated as a number. The trend changed. We changed it!

The fourth wave is more about connecting us to our information and to each other. I can go on and on about the digital connection between people. We’ll leave that for another blog. Suffice it to say that the fourth wave will have its problems in society. However, I believe we will battle trends as society that give us less control and separate us as people. We will find ways of better social networking as we become more connected to our information. Perhaps we will find ways of becoming more “humanized” that ever before through controlling the trends the connect us.

The fourth wave is here.

Cloud computing is here.

Marketing will change. Advertising will change. Consumers will demand it. Advertisers will provide it and agencies will adapt their traditional ways of delivering the message. More on this later.

Required Reading

Getting up to speed...

Here's some reading to get you up to speed on the industry changes:

Let's start by overwhelming you with a bunch of reading. Most of you will skim through this, but those of you who are serious should read it all.

First of all, read Nicholas Carr’s book, “The Big Switch”. It’s an easy read and very well written. Thanks Nick!

Secondly, go to Google. Type in "Cloud Computing", click on the News tab. You will see new developments everyday. I would suggest you subscribe.

Thirdly, here are some significant articles and background information. Many of those you will see on Google are rehashes of these articles:

Wikipedia – Not the best definition I’ve heard, but it is a start. I personally like Bill Gate’s definition.

Bill Gates at CES – Many say that Microsoft’s struggle with Google and their pending purchase of Yahoo is all about Cloud Computing.

Google and the Wisdom of the Clouds – this is a great story and the subject of many follow-up articles.

Google and IBM in the clouds – New York Times

Amazon in the Clouds – Bigger than their retail business!

Next why clouds and advertising?
Google says so! – Eric Schmidt says, Cloud Computing and Marketing go hand-in-hand.”
This will be the subject of many things to come.

David

Introduction to Cloud Computing for Marketing

Cloud computing is not new. But the term and the impact on society are new. In this blog, I'm proposing that we explore together its impact on the marketing and advertising landscape.

Who is this blog for?

1. Marketing Industry professionals
2. Business people who want better and cheaper ways of acquiring and retaining customers
3. Technology people who want to see the impact of their ideas on this industry

I'd like us to explore three areas together:

1. Education

This revolution will transform marketing and may do so faster and more completely than any change before it. However, until we understand what in the 'hec' "it" is, we will feel its impact before we know its coming.

First of all, let's learn what it is and what it means to us in the industry. There are competing definitions of cloud computing in general. It is confusing even for those of us with a science and technology background. For those of you with a creative and people background it must be even more so. So let's speak plainly and frankly.

With some basic foundations, we can begin to apply the concepts to our industry.

2. Industry pontification

What is the impact on the industry at a high level? In some ways I'm looking for the futurist's among you to give us the "Minority Report" cool things that this will enable. Where is this going?

3. Industry Impact

What does this mean for advertisers, agencies and marketing professionals today? How can they prepare?

This will be a group effort. I will be inviting many professionals from my company and from the industry to speak. As the editor, you should know that I am certainly a champion of the transformation. Our company is built to facilitate the transformation. In many ways, my business partner and I have been working on this since 1996. But it wasn't until 2 years ago that we formulated a vision and began working to be a part of what we see as the overriding wave of our time. As such, this blog is somewhat self-serving, for which I do not apologize. It is timely and needed.

Please comment and if you wish to add to this blog, please email me your article for consideration.

Happy blogging

David