Amazon bought Whole Foods, bringing the world’s leading online retailer to brick and mortar stores. General Motors invested in Lyft, tying a traditional automaker to the software driven future of cars. Vivendi bought Havas, merging the development of content to the ability to make sure it is consumed. Today, Concentric announced an exclusive partnership with inVentiv Health Communications to license our simulator technology to help better develop marketing strategies and forecast outcomes: read more about it here.
Often with these types of announcements, the question asked is “Why?”.It’s important to understand what partnerships are telling us about the challenges facing the marketing world. Let’s look at some facts as a source of explanation.
We know markets are changing in ways never before conceived. Laptops, PC’s and Tablets used to be industry sectors; now they are one and the same. Industry lines are blurring in ways people never anticipated. Your home used to be a sanctuary for renewal and now it has become a hub for commerce and entertainment. Competition is emerging to disrupt by attacking niches. Did you ever think there would be over 5 million apps available for smartphones?
Consumer behavior is changing faster than ever. In 2016, NPD reported restaurant sales declined slightly for the first time in a decade. Now in the first quarter of 2017, Black Box Intelligence reported the declines were faster than ever and restaurant sales were down 3.6%. According to the Association of American Publishers, e-book sales declined 18.7% in 2016. Paperback sales were up 7.5% over the same period and hardback sales increased 4.1%. In March 2017, Conde Nast reported women’s solo travel is increasing 35% a year. It was reported by the Guardian that nearly 50% of men are now shaving their legs. I will not mention how many are shaving their bottoms…
In 2016, NOAA reported that coastal U.S cities experienced a combined 520 days of high tide floods, far above the annual average of 275 days. According to SiriusDecisions, 44% of all companies are making investments in business intelligence software. Digital advertising now outpaces TV ad spend. Until last week, I could go to Cuba.
The answer to our question is that complexity now defines the business world. The interaction of market shifts, evolving consumers, and exogenous shocks have created phenomena. To cope with these emergent marketing challenges, companies need both new tools and new expertise. We believe for those with the culture, process, and structure to enable learning, the expertise needed to manage complexity can be developed internally using software. For those whose scale and focus do not naturally allow for innovation to start within their companies, partnerships are the best way for them to access the complexity solution.
For a company looking to solve marketing complexity with help from others, partnerships are an excellent place to look. We define partnership as the combination of technology and expertise. Technology is a requirement as the pace of complexity is only met with scalable, “near time” computing capabilities.Expertise is necessary because we believe domain expertise will never be replaced solely through artificial means. Solving complexity requires the artful blend of the two elements in order to augment your organization and enable collaboration.
Not all partnerships are created equal. When evaluating how well a partnership may meet your needs, here is a quick checklist of questions to ask:
- Does the partnership bring data and domain expertise I do not have in-house?
- Will their solution fit within my technology stack if my usage scales?
- Do they deliver a solution at a lower cost than a collection of individual solutions?
- Are they able to activate their programs into my marketing?
- Do they have the potential to make me more efficient, effective, and accurate over time?
Complexity is no longer avoidable. What must be chosen is how to manage it. Do I set out on my own or do I engage a partner? Neither solution provides a day one golden arrow. But for those wanting to solve complexity, it is likely that over time the solution will produce the disruption that worries your competitors rather than them worrying you.