Why do some firms skyrocket (while others fail) in the Digital Age?

In 2019, the world changed. First there was a whisper of a new virus, then Covid-19 crashed into the headlines before it resoundingly transformed everything: the way we worked, communicated and lived. But the pandemic wasn’t the only tectonic shift in human experience and enterprise that year. Out of the immediate spotlight, another major transformation was taking place. In 2019, global marketing spend on new, digital media quietly overtook traditional channels for the first time. Some think tanks reported an upswing of around 20% on digital ad spend in the US alone, seeing digital account for more than 54% of the total. A sea change was underway that has only gathered momentum in the years since. In 2023, new estimates put the global forecast spend on new media marketing around the $433 billion mark, creeping up to more than 57% of marketers’ budgets.

So what’s driving this shift? The simple answer is: consumers. Companies are spending skyrocketing amounts on digital marketing because increasingly their consumers are online – and in their droves. Industry reports show that in Q2 of 2022 there were almost 5 billion internet users. In fact, as much as 60% of the world’s population today is estimated to have unfettered access to social media channels. People are using the likes of Facebook, Instagram, Whatsapp, WeChat, YouTube, Tiktok more and more—in fact, Statista, a market data company, expects that the average time users in the US spend on digital platforms will increase to more than eight hours a day. Simply put, in what Nobel Laureate Herbert A. Simon calls the Attention Economy, it has become easier for brands to reach, engage with, and market goods and services to customers than ever before —whatever their demographic or niche interests.

Shrewd players are using their digital spend to corner their market. And they’re doing it fast. The last few years have seen the rise and rise of absolute newcomers. One of the earliest success stories of the digital era, Dollar Shave Club, went from startup to a $1billion exit in just five years. The secret to their success? A viral video campaign (with a powerful and compelling value proposition.) It took another mens’ grooming unicorn, Harry’s, just six years to claim 7% of the US non-disposable razor marker, largely on the back of an organic social media strategy. Casper, the online mattress seller, went from $100,000 of debt to a valuation of $1.1 billion in less than five years, propelled by a combination of social media savvy and influencer outreach. WeWork, DoorDash… the list of $1billion companies that didn’t exist 10 years ago goes on and on.

But the digital era isn’t only populated by tales of unicorns and overnight rags to riches, of course. For every Impossible Foods, Lyft or Warby Parker, there are untold also-rans. Who now remembers social chat app, Houseparty? What about social news reading service, Nuzzel? Or Tiktok-wannabee, Vine?

So what do the winners (and the losers) of the digital age have in common?

 For a start, the savviest players in digital marketing have mastered one crucial idea. Where traditionally things like having the esteem or the high regard of your customer might have been paramount, in the Attention Economy what arguably actually counts more is… being relevant. In this sense, there has been a fundamental shift in consumer behaviour—one that has powered the sky-rocketing rise of brands like Dollar Shave Club in less than 10 years. In the digital age, where market access has eroded and brands are competing for customer attention in a noisy, crowded, always-on playing field, remaining relevant is absolutely critical. So what’s the secret to keeping pace with shifting focus? That brings us to another element of digital marketing success.

What the winners have understood (and the losers perhaps less so) is that having a digital footprint is not the same thing as having a digital strategy.

In the digital age or Attention Economy, your marketing strategy has to be fit for purpose. And that doesn’t mean simply opening an account on TikTok or Twitter, Snapchat or Instagram. It means deploying the mindset, the resources and the tactics to track your changing customer base, and doing so systematically. It means building the data monitoring capabilities to know who and where you customers are and how they are changing. And it means having the capabilities to extract critical and ethical insights from that data, and translate them into actions that optimise your strategy. Of course you will also need to understand the technology—the platforms your customers inhabit, the shift from cookie-based to cookie-less marketing—and you’ll need to navigate the sweet spot between engaging your customer and tipping them into fatigue or annoyance. But the good news is that many of these skills are ever-green. And the better news is that they aren’t restricted to one digital platform over another.

To help you make sense of all of this, to understand your customers better and devise the strategy to reach them and keep them, we’ve developed a new programme, Digital Marketing Strategy. Led by Amitav Chakravarti and Om Narasimhan, two of the foremost thinkers in marketing and innovation, the programme integrates theory, real-world cases and hands-on simulations, giving you the big-picture understanding of where traditional media and digital dovetail in terms of a more rounded marketing approach. Our goal is for you to step away with total confidence using the major digital platforms, to pinpoint the key data analysis and metrics, and to deploy new, game-changing tactics as you put together a sustainable value-creation digital strategy—one that will help you engage with your constantly-changing customers in our fast-evolving digital world.