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DATA Is The New Currency of Marketing

February 1, 2012

I stumbled across an article last week about a new virtual currency called Bitcoin. Wrapping your head around the idea will hurt your brain. Basically, it’s a totally new currency system developed by some MIT geniuses using peer-to-peer technology. Their purpose is to develop a worldwide currency platform that is not affiliated with any government, has no central banking system, and cannot be tracked, taxed or controlled by any country.  Unlike other online payment services such as PayPal, their’s is a stand alone system that is not dependent on having the currency translate back into any standard monetary form.  That’s about as far as I’ll go in trying to explain the concept (view a simple demo at http://www.weusecoins.com).

It got me to thinking about “currency.”  Can a few smart people really create and replace a global system that has been the backbone of world economies for a few lifetimes? Going back to my formative years in the ad business, “back in the day” it was all about money.  How many times did my agency employer put pressure on a client to ramp up their media budget on the premise that it would drive sales?  “You’ve got to go national with your TV buy!”  “We cannot help you unless you agree to double your budget!” (Yes, I am fully aware that the practice is alive and kicking today). Coincidence that the agency made more money when a client “upped” their budget?  Without any proof whatsoever, the widely-held belief was that money is THE solution to all marketing problems. It was hog waste then and still is now. So if not $$$$$, then what?  Well, in a word, DATA! And it goes like this…

(Oh oh, here comes a giant “BGO”–Blinding Glimpse of the Obvious)!!!  The technology revolution has unleashed a torrent of change (wait, stick with me…).  At the most basic level, two of these changes have had a profound impact on marketing: 1) the digitization of almost everything–pictures, words, even personal relationships–into tiny bits of code, and the ability to store unlimited amounts of it; 2) the conditioning, acceptance and familiarity of people to voluntarily interact, share and even control the flow of information (web 2.0 anyone?). In my view, what’s really happening is this– the world of advertising and marketing is shifting from one that was (and still too often IS) based entirely on a BROADCAST model whose fuel is money–to a NETWORK model whose fuel is user-generated DATA. And the “winner” in the NETWORK model will be those who recognize and embrace that the new currency platform running all things marketing is DATA.

“…what’s really happening is this– the world of advertising and marketing is shifting from one that was (and still too often IS) based entirely on a BROADCAST model whose fuel is money; to a NETWORK model whose fuel is user-generated DATA.”  

In fact, it’s already happening.  Think about companies like Google, Amazon and Facebook.  Ten short years ago only two of them barely existed, and yet today their combined market cap (including Facebook’s estimated IPO value) is close to $400 billion! (I wonder how much that is in bitcoin?).  At their core, they all do the same thing…amass large audiences, and use sophisticated data collection and data analysis tools to virtually run their businesses. Interestingly, in all three cases, money is the RESULT of a currency platform that is DATA!

The implications and potential are enormous.  I can easily foresee a world where the consumer finally realizes the value of their personal data and, instead of giving it away freely to marketers, they store it in virtual wallets to be used to negotiate one-to-one, real, monetary value (in the forms of discounts, upgrades, etc.).  Or one where virtual “agencies” appear–in this case, they work on behalf of consumers, not marketers, and use their vast consumer data to negotiate larger deals and discounts for participating members with marketing organizations–on the premise that these deals will be more than paid for by the elimination of waste in the marketing process.

But for now, the world is much easier to forecast and the implications more straight-forward.  And it goes like this…every aspect of your sales and marketing planning and program execution SHOULD be evaluated with a different currency system in mind.  Make a commitment to move away from the “monetary” system and move as quickly as you can to the “DATA” system. In a few short years you’ll be glad you did.

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