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The New (and Ever-evolving) Direct And Digital Marketing Ecosystem

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In much of my recent work, the notion of an ‘ecosystem’ has surfaced. Popularized by environmentalists referring to a community of living organisms, the concept has had a firm place in business strategy since it appeared in Moore’s 1993 article ‘Predators and prey: A new ecology of competition’1. He defined it as ‘an economic community supported by a foundation of interacting organizations and individuals’. He suggested that the members of the ecosystem - suppliers, lead producers, competitors and other stakeholders - ‘tend to align themselves with the directions set by one or more central companies’. Moore pointed out, correctly, that the leaders may change over time.


In the world of marketing, ecosystems have slightly less coherence than in the world of information technology (IT), where ecosystems are defined by grouping around the main software providers. At the centre of IT ecosystems lie software designs, standards and application programming interfaces that allow independent developers to interlock with the leader’s software, as well as marketing and service partnerships. The leader focuses on building, managing and servicing the ecosystem and defending it from competitive invasion. The adeptness of companies like Apple and Google in building ecosystems around their products and services contrasts with the failure of companies like Nokia. In marketing agency , software companies like SAP and Oracle have strong reputations for ecosystem building and maintenance.


Regulators can interfere with ecosystems, particularly those designed to monopolize an industry, as Google, Apple and the mobile network operators have discovered. This applies even if an ecosystem faces strong challenges from other ecosystems (eg, the tussle between Google and mobile network operators over mobile telephony).


In marketing, we are seeing the emergence of a digital marketing ecosystem. But its evolution is complicated by the convergence of the marketing ecosystem with those of information and communications technology (itself a product of the separate, now merged ecosystems of telecommunications and IT) and with part of the financial services ecosystem (the bit that deals with payments). These ecosystems are all still evolving rapidly by themselves.


In payment systems, for example, digital marketing companies like Amazon are competing with digital payment companies like PayPal and Squared, conventional payment companies (like the members of the MasterCard and Visa consortia) and telecommunications providers with mobile payment services. At the same time, their ecosystems are supplanting older ones that are dying (though taking a long time to do so). Digital marketing is taking over from conventional marketing, digital payment is taking over from cash, and web and cloud-based IT is taking over from physical servers and installed software.


Meanwhile, all these ecosystems are ‘deepening’ in the sense that their impact on the lives of customers is becoming more important. The deepening of each ecosystem partly depends on the deepening of other ecosystems, so that there is a super-ecosystem under formation, in which deepening in different sectors and capabilities takes place at the same time, with some of the individual ecosystems both providing and using the capabilities of other ecosystems. You could call this ‘multi-sector deepening’.


The evolution and deepening of the marketing ecosystem is allowing companies to understand and reach their target markets faster, more accurately and cost-effectively, facilitating customer retention and development, while paradoxically also making it much easier for new entrants to attack incumbents’ customers.


The main components of marketing deepening are:


- Move away from face-to-face (in selling and service) to remote/direct marketing, first via call/contact centres and then web/digital.


- Introduction of competition in previously (over) regulated sectors requiring companies to become much more skilled at marketing (eg, in telecommunications, financial services, travel, logistics, utilities).


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p>- The evolution of marketing technologies and processes (customer databases, analytics, contact centres, digital) to allow sectors that previously relied little on marketing to start using it more actively (eg, retailers, leisure, airlines, broadc

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