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Communicate Levant | Advertising, marketing, public relations and media in the Arab world and beyond

Communicate Levant | Advertising, marketing, public relations and media in the Arab world and beyond




In today’s day and age, it is safe to assume that no media and marketing business model will survive without digitization, which reduces the cost of production and distribution, enabling most businesses to establish direct consumer to business relationships.  To understand what digital innovations mean for large traditional companies, we first need to look at whether or not traditional companies that are older, larger and burdened with inflexible legacies have the opportunity to act like a startup, and jump on the innovation bandwagon. At this stage, most companies are either choosing to remain traditional, adapting and learning new skills required to compete with digital agencies and to complement their traditional offering, or going into specialization.

Most large traditional media companies are using technologies like social media, mobile and analytics to change their customer engagement, and even business models. But only a few have captured their real business benefits; they have the digital maturity to not build digital innovations, but to also drive enterprise-wide transformation.

Take Burberry, which was significantly underperforming against its peers. While the overall sector’s growth averaged around 12 to 13 per cent a year, Burberry’s stood at one to two percent. In 2006, the brand launched a sizeable digital transformation program, using technology to improve its in-store experience and increase operational excellence. It revamped its marketing strategy and made it digitally-friendly, connected with its target group online more than offline, and its sales and brand recognition sky-rocketed as a result.

Another great example of such digital adoption is Indian paint manufacturer Asian Paints, which grew its digital, governance and IT capabilities to become a more unified company; it repeatedly built on its capabilities to transform customer engagement, internal operations and business models, and is now reaping huge benefits.

Digital transformation is moving more rapidly in some industries than in others. For example, in the education industry, there are more than 3 million online students in the US, and 2 million in china. Online education is clearly more affordable, more active, focused and competent in comparison to the traditional education industry.  Similarly, companies in the travel and music industries were hit early by threats from digital competition, and have already undergone profound transformation.  Industries such as financial services and retail underwent major transformation due to electronic commerce in the 2000s, and are now starting to innovate with technologies in social media, mobility and analytics.

Until recently, traditional media companies had a clear recipe for success with numerous revenue streams and few mediums. For some of them, it can be a challenge to integrate digital media in a way that will enable effective functionality while pushing boundaries. With the digital platform expanding rapidly, they will need to adapt their strategies and models, actively participate in digital platforms of the future, and drive change across their business to keep on par with digital companies that address the internet, social, mobile and all other innovations that arise.

Key factors this re-adaptation require mastering a new skill set, removing the layers of bureaucracy, providing entrepreneurial freedom to managers, and developing and harnessing a culture of openness and innovation in the work environment itself. It requires a trial and error approach with flexibility to learn from mistakes, and then to firm the approaches that do work.

With regards to buying in or acquiring startups, a lot of experts believe that past track record shows clearly that M&As’ (mergers and acquisitions) performance has, on average, not been great.  For these deals to succeed, it is vital that a cultural transition takes place, where there is clear communication between people who possess the skill sets, and those who run the business. Realizing these facts and being aware that they are already strong as far as content is concerned, major traditional companies are now focusing on transforming their existing business models, broadening their skills, investing in tech talent and bringing innovation from within so that their digital opportunities can be monetized.

Before traditional companies move onto digital platforms, they need to understand their purpose and the relevance of their campaigns. Copying a competitor’s model will only take you so far, but will not help you flourish and thrive amongst competitors.

Conducting your digital transformation requires taking action in four key areas: framing, investing, engaging, and sustaining. The first step is to understand the threats and opportunities that digital represents to the organization. Will existing ways of working continue to be effective in a digital world? Are there new opportunities available in customer experience, operational processes or business models? One way or the other, regardless of what approach they take, change has to be initiated either by the client or by the agency.

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