Digital is still at the black-and-white TV stage: McLaren

“It’s not just an eyeballs game,” McLaren said. For about 50 years marketers followed a straightforward path that relied heavily on a few options. “You just had to turn on the big media tap,” he explained, to bring buyers to your doorstep. “Arguably that model worked pretty well. But that’s been completely disintermediated. There’s still a role for paid media, but there’s a role for many things now. The big question is, how do I drive demand? How do I acquire customers?”

McLaren says there is no single approach, no black-and-white way to go about marketing. But if you can think of a new way, there’s technology now to help you make it happen.

But many marketers, he explained, are not yet confident that all the new digital tools and channels can or will bring in the same buyer volumes they’ve become used to. The old model worked so well, it shouldn’t be surprising that lots of advertisers still cling to it. “Even though the data tells you there’s less effectiveness of these big media channels,” he said.

You don’t have to dig deep to find reports showing people, especially in younger generations, engage less with TV today, for example, and more with their personal screens. Even at the recent Casbaa convention in Hong Kong, speakers on stage grappled with the question of how TV stays big (rather than just one of many screens in people’s lives).

“The average consumer is spending 50 per cent of their time in online environments and yet still only 30 per cent of budgets are dedicated to online environments," McLaren said. "There’s a gravitational force that’s going to pull that into line."

Still, McLaren emphasised, it’s a big ask to get companies to completely change the way they do things and open up to become these flexible, digital, social machines “while still protecting privacy, and protecting data, and protecting security, and protecting up-time and protecting availability. That marketing and technology convergence? That’s a big deal.”

The message he has for marketers facing this dilemma is it is vital to shift the philosophy and start looking at how to steer tech investments toward enabling customers.

A place he sees this kind of thinking happening with less friction is in China, where consumerism is a relatively recent development, so the country’s marketers have less entrenched thinking.

“The China digital landscape is unbelievable,” he said. “And the innovation that’s going on? It’s truly world class. I think there’s receptivity to innovation in that marketplace that is not something you see everywhere in the world.”

One example he cited that he believes holds lessons for brands anywhere: Xiaomi.

The company’s strategy of going direct to consumers, he said, was notable not only because it is exceptionally difficult for any brand to gain traction this way, but also because of how far it has taken the phone maker. In about four years, the Chinese firm has leapt from a Shanzhai style startup to the world’s third-largest vender, based on shipment volumes.

Both marketing and management circles have lauded the brand for its flash sales and mobile commerce but most of all for its active engagement with users. The company encourages feedback and uses it to learn what customers want and to incorporate that into the next product iteration.

Marketers looking to put some of that same strategy into their own approach, McLaren explained, don’t have to throw out their old playbook entirely. Xiaomi’s success should indicate the power of social and digital tactics. But those can still fit into a traditional paid-owned-and-earned perspective. The key is picking the parts that fit and enhance what a brand already does well.

“There’s no one playbook," he said. "You have to make some educated bets on what you can do, and do them very well.”

Looking elsewhere in China, McLaren highlighted “one area to watch is O2O. As more marketers are trying to go direct to consumers, digital channels are opening up this direct access to massive audiences that would have never been the case [in earlier years].”

He turned to his laptop and brought up a slide from a pitch deck that demonstrated a process of shopping at the store level while paying for items with a smartphone via a QR code. The effort was a China venture between a physical shopping mall, Yintai, and virtual venue Tmall.

“I think retail is going to go through a radical transformation," he said. "And you’re seeing it happen right now.”

Experiential aspects, he said, will always be an important part of the customer journey. People like to shop. They enjoy touching things. But after buying stuff, he suggested, maybe they don’t enjoy carrying it all around so much. Maybe they would rather shop “and then go have a coffee or lunch and have the thing they bought delivered to their door”. That kind of digital integration is a model he sees becoming a bigger part of marketing overall; delivering a positive customer experience is part of marketing’s business role. “And the guys who are going to be nimble are the guys who are going to recognize that it's the marriage of digital and physical [that brings success].”

Digital wallets, e-banking, or adopting simple commerce platforms for things like booking taxis or long-range travel—all these point to a deep integration, McLaren observes, of mobile technology with day-to-day life. China’s Singles Day, the online shopping event, saw more than 40 per cent of its US$9.3 billion in sales come through mobile devices. The fact underscores McLaren’s point that marketers could find some lessons in China.

“You’ve got these incredible myriad of environments that are popping up, and they’re all starting to build," he said. "Baidu coming out of search and creating ‘digital life’. And Alibaba coming out of commerce and expanding into digital life. And Tencent coming out of social. So they are all coming from different places. There’s a lot of parts of China that I think the world can learn from.

“If you can imagine it, and it makes sense, there’s technology out there to help you build it. And we’re probably only at the black-and-white TV stage too” McLaren said. “It’s only going to get more and more sophisticated. I do think we’re untethered now.”

Digital technology is in the process of finding its base and creating value for consumers. Likewise, it’s developing a critical mass that looks quite similar to the one big media once commanded.