CEO of Razorfish International Michael Karg and Pete Stein, the newly appointed CEO of Razorfish Worldwide to replace Bob Lord since July, put their foot down about the landscape of digital.
1. The digital future has shifted from the West to the East.
Aside from the East’s faster adaptation to the third screen, Karg said the younger and socially-connected generation in Asia, and especially China, have higher purchasing powers than the West.
“So what this means is that in China, the people who are on social are the same people who have money,” he said, citing that the average age for a Chinese person to own a luxury item is 35 years old – a whole 10 years earlier than a Westerner.
“The West really needs to learn from the East because, eventually, the gap of social activity and purchasing power will lessen as the next generation takes over, and brands need to know what to do.”
Karg added that the Chinese is also less likely to trust people aside from their friends, which is behaviour not only very different from Americans and Europeans, who have faith in brands and the government, but it is also one that opens up opportunities for social media and content creation.
2. “The interruptive marketing model is dead”.
Though both Stein and Karg agreed that digital advertising has turned into a quest of turning customer’s data into valuable marketing information now that consumers have the technology to skip all the advertising made under the interruptive model, they said that startups in Asia also have the advantage of jumping straight onto the new bandwagon.
“A lot of the problems century-old brands face is a lack of digital leadership as well as the silos between product, marketing and service to make a really integrated conversation with consumers,” said Stein. “So the good news for startups is that they can leapfrog directly to a new marketing model without struggling with this part.”
Karg chimed in and cited the example of Facebook, whose advertising model changed from mere banner ads to something more targeted and fitting to the users’ likes and preferences.
“Old models don’t fit the new world.”
3. Benchmarking doesn’t work.
“Softwares are evolving so quickly that what worked last month won’t work now,” said Karg.
So instead of looking to better their last campaign, the CEOs advised marketers to step back and view their brand in a bigger picture with a “product mentality” rather than a “campaign concept” to allow for a continuous dialogue.
A successful example is Red Bull, which has purchased all its pseudo-brand activities –such as having its own Formula 1 and football teams — rather than engaging in sponsorships or dishing out millions in renting media space.
“There’s a substantial difference between promoting brand experience and buying ad space: companies like Google and Facebook didn’t become successful by buying up ad space; they gave an experience that is so close to the brand values to their fans,” said Karg.
“Buying media is a commodity: it’s pointless and non-innovative. The future of marketing, especially digital marketing, is about really showing what your brand is about to your community. Digital is not just a channel: it’s a completely new dialogue and a completely new culture. Without creativity and true integration with the core of the brand, this can’t be done.”
(Above picture is a shot from The Red Bull space-diving Stratos project).