Are You Organized for Incremental Change?

By GroupM Archives

Does that sound like a good idea to you? It doesn't to me, yet so many of us do it. Our instincts are to look back before we go forward, and ask what we did before, and what we need to do to change (for preference, as little as possible)? We organize our businesses to be accountable in narrow silos. We set incentives the same way; we define goals within tight guard rails and reward those who execute on those goals often out of proportion to our collective objective.

Many enterprises take this further still; despite having a single share price and, often, extraordinarily homogeneous customers, we resist the obvious opportunity to optimize portfolio performance and align incentives to that end -- unless we sit on the very point of the corporate pyramid. 

For many managers this is been a successful approach. It breeds focus, a sense of control and the promise of reward for effort and success unpolluted by the failings of others. I work in advertising -- the business of brand growth -- and from that view believe that it's not going to work forever. Four prevailing truths make this certain:

  1. The rock stars of the corporate world are global monolithic brands. Apple, Google, Facebook, Amazon. We all want to be like them.
  2. They are global, or close enough; they look the same to everyone, everywhere. Critically, they have become so quickly and organically.
  3. Social media has made redundant any perceived benefit of brands hedging cross-company contagion.
  4. Business is data driven and data is an international, brand agnostic currency.

Let's take a view of this through the perspective of data, increasingly seen as one of the most valuable assets in business, and through media, perennially one of the most significant expenses in business. 

As we move to an increasingly programmatic world, the relationship between data and media has reached a new level of intimacy and this, in turn, asks pressing organizational questions. The two key technologies in programmatic media are: 

  1. A data management platform or DMP, a data structure that ingests and deploys data you own (sales, customer information), data you rent or buy (related behavior, credit status) and data you learn (responsiveness to messaging).
  2. A demand side platform or DSP (or bidder) that applies your data to an ever flowing river of display and video impressions made available by sellers of inventory.  

It makes sense for the DMP to be populated with all the data available as doing so is likely to create data symmetry inside the company so everyone is operating against the company's goals with the same indicators. And with data massed in the DMP, this is also the greatest opportunity to create data asymmetry between the company and sellers of advertising. Put simply, if the buyer can see value in something the seller cannot, the buyer obtains an advantage.  

Think why this would be interesting if you were a food or personal care conglomerate. It would be good to know that the person who responds to candy ads in the evening is the same person that responds to coffee ads in the morning. For shampoo and toothpaste analogies, simply rinse and repeat. If your coffee business and your candy business don't share a DMP it would be hard to know and even harder to determine which category should bid on which impression. If they don't share a DMP across markets their ability to acquire and apply data across borders is compromised.

The DMP/DSP might be a narrow use case, but it's emblematic of wider issues in business that can be summarized as spending too much time on things and nowhere near enough time on the whole thing. Facebook, Google and Amazon spend a heck of a long time maintaining corporate alignment that, in turn, allows for rapid innovation cycles and deployment of successful developments.

Maybe it's time for organizations to think of data; its collection and application as the organizing catalyst for organizational change and as the mechanism to connect global portfolios as well as global brands.

Doing so has significant internal implications: 

  1. Fewer and better decision makers on tech and data structures
  2. Resolution to the paradox of unlocking the potential of data without compromising its security
  3. Putting data at the heart of joint business partnerships with global and local data-rich media partners
  4. The willingness to balance opportunity for a brand with opportunity for the enterprise 
  5. An incentive structure that allows a brand or market to act for the greater good without penalty

Interestingly we have been here before, in the procurement of oil and other supply-side commodities, which influence production, factory prices and profit. Perhaps data is the first “demand side” commodity that will be treated in the same way, and like all truly global parts of the supply chain encourage us to think, and act differently -- in pursuit of fundamental versus incremental change.

The opinions and points of view expressed in this commentary are exclusively the views of the author and do not necessarily represent the views of MediaVillage/MyersBizNet management or associated bloggers.

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