Digital Transformation: The New Normal Or The Same Old Bullsh*t?

In his latest post for B&T, adland veteran Robert Strohfeldt argues we may well be swamped by data, data and more data but, he says, it’s not so good at predicting global pandemics or consumers’ shopping habits during them…

The digirati are having multiple orgasms. Not only do we have a continuing “digital transformation”, we now have a “new normal”.

The digital transformation, what does it really mean? The execution of switching from what have been termed legacy systems to digital does involve complex work. I have a brother who is an electrical engineer. To the untrained this means he deals with “electricity”. Misleading as he specialised in communications. (I use the past tense, as he retired a squillionaire after floating the business on the London stock exchange). Specialising in security, he developed software for banks which embedded the security “signal” within the transaction information all branches sent to head office. The individual branches security data was then unscrambled from the transaction financial information. The result – one central security monitoring set up, rather than one for each branch, a saving in 1980 of around $25,000 per branch. The Big 4 had over 6,000 branches at the time.

This was my introduction to “digital transformation”. An individual example was way back in 1980 he took me out to Tip Top bread head office to fix “something” (I had no idea of the complexities he tried to describe) and demonstrate how “digital” will change “everything”.

They had a room full of mainframes. He explained to me all the bread delivered to supermarkets, shops, homes – millions and millions of loaves and other products, must be kept track of. Bleeding obvious, though when I thought about it at the time, the amount of information was massive. Pricing, invoicing, stock control, individual supplier ingredient volumes and costs – the list went on and on and this was just one company. An interconnected world – the specifics are vast and complex, but the concept is simple, and when 5G becomes standard, “everything” will be connected to the internet.

Marketers and advertisers are a couple of decades behind the front- line software engineers. Digital transformation and being customer centric are still two of the most frequently mentioned topics in marketing and advertising literature:

Quoting from one of the articles I read only the past week: “Digital transformations are changing how businesses operate and deliver value to customers amid changing market requirements. They’re uprooting out-of-date processes and helping companies put the customer at the centre of everything they do.”

Ever since marketing became a recognised discipline, the customer was at the centre of all activity. Philip Kotler, leaning on the works of Milton Friedman, is recognised as the “father” of marketing. Many will argue his theories are past their use by date. Even so, marketing has been a recognised discipline since the 1950s. The talk back then was about being customer, rather than production, driven. So, 60 plus years later, people are still rabbiting on about being customer centric.

And somewhere along the line, “digital transformation” meant a company’s advertising must also became digital. Considering TV and radio all broadcast in digital, this is not such a crazy philosophy. But, “digital” in the eyes of the “digital marketers” and “digital advertising” specialists, meant online including social media.

Unfortunately, now with so many streaming services, VOD and OTT, there is no doubt Free to Air TV audiences are shrinking rapidly. I say unfortunately, as digital marketers and advertisers almost sneer at legacy media. (As an adjective, legacy means something which has been superseded). Yet for impact and effect, nothing beats a well – crafted TV ad. How can anyone, maintaining a straight face, argue a pissy little ad in social and/or online compete? Of course, the online and social ads can be finely targeted, where TV advertising is very broad in its reach, implying wastage. So, a very specifically targeted “digital” ad, mostly now on smart phones, “beats” a well -crafted TVC? (And if only I had a shotgun, I could have brought done one of the pigs flying over our place yesterday and had fresh bacon for breakfast this morning).

Results are the ultimate determiner. And in the past 20 years, not one, not even one brand of significance has been built on digital (online) advertising alone. Yes, there have been brands which use online, built in this period, but it was always done in conjunction with “legacy” media. (You know that stuff that has been superseded). How can you tell when a purely online business is doing well? It advertisers on TV.

The biggest issue now is “where do you advertise”? With an already and still increasingly fragmented media landscape and falling audiences in traditional media, integrated advertising is not some method adopted by visionaries. It is a simple bloody matter of survival.

Well sourced and analysed data is a must. But we are inundated with data – mentioned in a previous article, in 2017 IBM calculated 2.5 quintillion bytes of data were being created daily and 90 per cent of the world’s marketing data had been produced in the past two years – a fair bet it is more than double that figure today, which comes to a “shitload”.

We are drowning in data and have fuck-all people who know how to correctly analyse it. In a quantitative world, this sounds like heresy, but common sense is worth its weight in gold.

Logic provides the brief, but creativity is a function of imagination, something that cannot be formularised.

A terrible analogy, but in the same way the death of Princess Diana was 20 years’ worth of grist to the mill for gossip magazines and publications until William and Harry got old enough to follow, digital transformation has been the same until we have “The New Normal”, brought on by the Corona pandemic.

People are either locked in their homes (Victoria) or have had their movements and access to shopping severely curtailed. Do you really need data to tell you that more people are going to shop online? And as social animals, when the opportunity arises to get out more often, people do? And people who had rarely or ever purchased online, discover the ease and convenience to do, will shop online more frequently when normality (oops, the new normal) returns?

And there are certain items more appropriate to buy in-store than online? Are people more prone to want to pick their own fruit and vegetables? The clothing retailer, Iconic, has built into its business model a high rate of return. Why? Bloody common sense. How an item looks on display and how well it suits a specific individual’s body shape varies enormously.

Data will tell how much, how often etc. But there is a vital step before looking at these variables. It was something we were taught in third year pure maths at university, termed “A bit of fucking common sense.” Data in a vacuum can be as problematic as having no data at all.

As almost double quintillion bytes of data are available from the pre-pandemic era, there is bugger all data on how people are reacting to the pandemic. (It is a dynamic situation). And it varies not only country to country, but state to state (or region to region) and even metropolitan to country. This is where logic and common sense are worth their weight it gold. And with the pandemic still having a long way to go, we have people foolish enough to give predictions of what this “new normal” will be like.

Think about how hard it is to predict the future in stable times. We had the early 90’s recession, the end of the decade tech wreck, 9/11, the GFC and now the pandemic. How many of these futurists picked these occurrences?

But they are out there giving us advice already: “Creatives would do well to borrow the mindset of a data scientist to rebuild their visual marketing strategies”.

The best way to fuck creativity is to ask creative people (be it advertising, art, music, dance- anything that involves the “heart” as much as the “head”), is to try and think like data scientists. Those wonderful folks who have learned enough statistics to be dangerous. You don’t need to know or worry about the answer to this, just as a data scientist “how do you find the tangent to an affine plane?”. If you get blank look, ignore their quantitative assessments. They don’t have the pure maths foundation to truly understand statistics. The modelling applied is a generalisation, one size fits all. Every event is different and hence requires a separate and different probability function. Instead, all data is shovelled into a pre-determined computer model based on a statistical function generalisation.

Bob Hoffman, a former MoJo Chairman, calls a spade a fucking shovel. He put the predilection of marketers to tell the future thus: “Anyone who says, “yes and no”, who says “definitely and definitely not”, who says “this will work, and this will not” is full of shit, because they don’t know. Understanding that we are dealing with likelihoods and probabilities is one of the deep insights that marketing people need to get”

If this were not the case, we would all be out of a job. Just programme the computer, fire it up and we all piss off to the pub and dole queue.

Uncertainty is a wonderful thing; it keeps us all in a job.