Recognizing And Coping With Exponential Change In Marketing
So long, Facebook and Google? Not any time soon. But columnist David Rodnitzky believes marketers need to recognize how rapidly change happens in our industry and find a balance between what works today and what may come tomorrow.
Who could have predicted, 10 years ago, that self-driving cars would be on the road?
What if I told you Facebook, Google and cell phones would be 100 percent obsolete by 2020? You’d probably ask me to check in with the nearest psychiatrist for some help.
In truth, it’s hard for me to imagine that such a prediction would be right, but that’s precisely the point noted futurist Ray Kurzweil makes in The Singularity Is Near: We are notoriously bad at predicting the speed of change.
Before debating the impending demise of Facebook and Google, let me start by explaining Kurzweil’s theory, which he calls the “the law of accelerating returns.”
Here’s how he described the theory in a blog post more than 10 years ago:
[blockquote] An analysis of the history of technology shows that technological change is exponential, contrary to the common-sense “intuitive linear” view. So we won’t experience 100 years of progress in the 21st century — it will be more like 20,000 years of progress (at today’s rate). The “returns,” such as chip speed and cost-effectiveness, also increase exponentially. There’s even exponential growth in the rate of exponential growth. Within a few decades, machine intelligence will surpass human intelligence, leading to The Singularity — technological change so rapid and profound it represents a rupture in the fabric of human history.[/blockquote]
It sounds crazy, doesn’t it? Twenty thousand years of progress in 100 years? But think about the technical changes that have happened in the last century alone:
- It took humans tens of thousands of years to invent the wheel, but in the 2Oth century, we progressed from the automobile to the propeller plane to the jet plane to the rocket and now to the reusable rocket (SpaceX, Space Shuttle). In the next ten years, we may be traveling via rockets and self-driving vehicles.
- Information was spread via print (books and newspapers) until the radio, then the TV, then the internet. Ninety percent of the world’s data has been created in the last two years.
- Computations were once performed by abacus; the 20th century brought us calculators, and eventually supercomputers. An Apple iPhone 4 has 2.7 times the processing power of an IBM mainframe in 1985. From 1956 to 2015, we’ve seen a one-trillion-fold increase in computer performance.
Exponential Change In Online Marketing
Given that online marketing is wholly dependent on technology (the internet, cell phones, big data, attribution and so on), it seems reasonable to expect exponential change in our industry, as well.
Indeed, if you look at just the last 15 years of online marketing, change does seem to be accelerating.
Let’s look at a few trends, starting with online marketing.
Way back in 1997, online marketing spend accounted for about 0.67 percent of all advertising in the US. In 2015, that percentage increased to 31.6 percent, and digital marketing is expected to overtake TV as the number one advertising medium in 2017.
Next, let’s chart the rise of mobile marketing as an important part of online marketing.
In other words, it took mobile less than ten years to go from afterthought to primary channel.
How about social media marketing? In 2007, Facebook managed to drive $153 million in revenue (almost entirely from advertising). That number shot up to $12.4 billion in 2014 and $7.6 billion in the first six months of 2015 alone.
To put that in perspective, in 2014 Facebook drove 2.3 percent of all advertising spend in 2014 and 8.9 percent of all digital advertising.
So you could conclude from these statistics that Facebook, Google, the internet in general, and mobile in particular, will continue to dominate both media consumption and advertising spend, right?
Not necessarily. This is where you have to understand the nuance of Kurzweil’s point.
If you assume that the recent growth of online marketing (as we know it today) will continue into the future, you are making a fundamental error, according to Kurzweil. You are taking a “linear” view of the future, rather than an exponential one. As Kurzweil writes:
[blockquote] Even for those of us who have been around long enough to experience how the pace increases over time, our unexamined intuition nonetheless provides the impression that progress changes at the rate that we have experienced recently. From the mathematician’s perspective, a primary reason for this is that an exponential curve approximates a straight line when viewed for a brief duration. So even though the rate of progress in the very recent past (e.g., this past year) is far greater than it was ten years ago (let alone a hundred or a thousand years ago), our memories are nonetheless dominated by our very recent experience. It is typical, therefore, that even sophisticated commentators, when considering the future, extrapolate the current pace of change over the next 10 years or 100 years to determine their expectations. This is why I call this way of looking at the future the “intuitive linear” view.[/blockquote]
What does this mean for online marketing? Well, consider some of the trends we discussed above:
• Will mobile marketing be the dominant force in advertising in the next few decades, or will a new technology replace mobile (usage and advertising) at a rate even faster than online marketing’s growth against traditional and mobile marketing’s growth against desktop?
Is it in fact more likely that mobile advertising will cease to even exist in a few decades (perhaps replaced by the Internet of Things but more likely by something we cannot even currently contemplate)?
• Will Facebook continue to grow exponentially, or will other social media sites take its place? While it is true that Facebook’s revenue growth has been exponential since 2007, it’s also seen exponential competition.
Snapchat, for example, which didn’t even launch until 2011, has grown to more than 70 million monthly active users (MAUs) in less than three years. WhatsApp (acquired by Facebook) had only a few million users in 2010 and now has more than 700 million MAUs.
The social channels that will dominate in the near future have likely not been invented (assuming that social will be relevant at all).
Standing Still Is Moving Backwards
The lesson for online marketers should be clear by now: The channel, device, technology and medium you rely on today may not exist tomorrow, and the rise of the replacement will likely come much faster than you expect.
Being on the “cutting edge” of marketing requires constant evolution. Of course, this doesn’t mean throwing the baby out with the bathwater.
In the foreseeable future (i.e., the next few years), for example, Google, Facebook, mobile phones and all the things that are central to online marketing today will continue to be important. Now is not the time to abandon successful campaigns and throw all of your efforts into future, as-of-yet unproven strategies.
The challenge for online marketers is to figure out the balance between what works today and what will work tomorrow. Know when to invest in new trends, when to fully pivot, and when to ignore the noise.
And recognize that change occurs more quickly than we think!