Forget global warming for a moment and consider the coming ice age. No, this isn’t another climate scare, but a business environment change, changing the way the economy, markets and marketing work. It’s being driven by ICE: the convergence of the information, communication and entertainment industries.
The UK is leading the world in ICE. Over the next decade, £60bn worth of investment in mobile telephony and broadband infrastructure will, like electrification, make ICE technologies ubiquitous. And all hell is letting loose as powerful players in once-separate markets – TV (both traditional and interactive), fixed telephony, mobile telephony, PC-based Internet, personal digital assistants, music, games, radio, cinema and print media – converge on new sweet spots of consumer value.
The value of ICE-based consumer markets will leap from £45bn in 1999 to £69bn in 2004, predicts PriceWaterhouseCoopers (PWC) in a new study of the ICE phenomenon. Device manufacturers such as Sony and Nokia, technology companies such as Microsoft and Cisco, content providers such as EMAP and the BBC, e-commerce providers such as Amazon, portals such as Yahoo, pipe providers such as BT, NTL and Vodafone, and service providers such as Freeserve and AOL are all converging and colliding in the battle for the five main ICE revenue streams: device sales, service provision, content, advertising and e-commerce fees and commissions. Retailers, utilities and financial services companies are also being sucked into the vortex.
But why should this scramble rewrite the rules of marketing? Because of what it takes to be a winner. Enter what PWC calls the PRISM – the Personal Integrated Services Management provider.
PRISMs do a lot more than sell content, access to information and communication services. They create what PWC consultant Christopher Mole calls the hyperconnected individual, “applying technology, information and intelligence to save time, money, inconvenience, reduce risk and expand opportunity”.
In addition to providing telephony, TV and Internet services, the ideal PRISM will, predicts Mole, act as a personal portal, personalising delivery of the best of the world’s content and applications; an e-commerce agent getting the best deals for its clients, managing relationships with other suppliers and co-ordinating billing and service delivery; a personal dashboardÃ monitoring things such as household energy efficiency or household spending; a personal assistant organising child care or home cleaning for example; an information filter and watchdog (for example, screening unwanted advertising); and as a data warehouse, managing personal and family data and running analyses of them.
The PRISM’s potential scope is breathtaking. Mole lists 14 aspects of our lives where PRISMs can leap to a new level of value creation for consumers: my communities, my communications, my services, my finance, my leisure, my projects, my interests, my work, my family, my travel, my home, my shopping, my business, my entertainment.
Crucially for marketers, PRISMs use converging technologies to become the means by which individuals deal with the world outside. Just as companies deploy a whole set of specialist functions such as marketing, public relations and corporate affairs departments to handle their dealings with the outside world, so individuals will increasingly use PRISMs to do the same, including interfacing with sellers trying to sell them stuff. Such a beast would have a fundamental effect on the way we think about, and do, marketing.
The standard model of consumer marketing is still based on packaged goods – it revolves around how to package, communicate and sell stuff. So far, new information technologies have been used primarily to help answer the same age old question: how to sell more stuff more efficiently.
But PRISMs take a different tack, shifting the centre of marketing gravity away from the imperatives of selling to the imperatives of communication (including, of course, the communication of information about products and services).
This shift may seem subtle, but it’s crucial. The standard marketing model is awash with rhetoric about being customer-focused, but its prime focus is really “my offer” – what I’m trying to sell, whether it’s cars, crisps, computers or Caribbean holidays. No matter how persistent the customer-focus rhetoric is, this sort of marketing remains incorrigibly product-focused. It focuses on the customer only in order to sell the product more effectively.
The PRISM marketing model, however, points in a different direction. It’s less about selling stuff to the consumer, and more about helping the consumer do more, at less cost: helping consumers administer their lives more efficiently; accessing the right, rich information to help achieve important goals; acting as the consumers’ agent to help them buy cheaper and better.
In this last role, PRISMs turn the tables on traditional marketing. While the core incentive of product marketing is transactional – how to close more sales – the PRISM imperative is relational: building a long-term billing relationship and funnelling as many service, permission advertising and e-commerce revenues through it as possible. The one is primarily about helping sellers to sell. The other is about helping buyers to buy. The first is organised around producer-defined supply chains which then target buyers. The second starts with the individual to reach out to suppliers.
A fully fledged PRISM would be a “killer proposition”, says Mole. In pure form, it’s probably an unreachable nirvana. We’re only starting the journey towards the new concept, and no existing player has all the necessary capabilities. Some have the brand but not the technology. Others have the technology but lack content. Others have content but lack the customer relationships. Yet others have the customer (billing-based) relationships but lack the brand. And so on.
And assembling the right strengths in consumer understanding, brand and reputation management, customer relationship management and personalisation, digital asset management, systems integration, alliances and partnerships will be a tall order for even the best players.
Nevertheless, the race for the new high ground has begun. As Mole comments: “It’s Game On”. And this particular game could change the face of marketing.
Alan Mitchell, firstname.lastname@example.org