First published in Marketing magazine in 2007, what's amazing is how the pace of chance hasn't let up one bit since I wrote this. If anything, it's faster; and the capacity to innovate even more vital than it was back then.
In 1476, William Caxton established the first printing press in England. It took him a year to get his first book out and whilst history doesn’t record whether it was a smash, by 1590, towards the end of the reign of Elizabeth I, over 250 books were being published every year. This was the white heat of technology, and it ignited an explosion of knowledge and political discourse across Europe that changed the course of that civilisation.
In 1993, the first graphical web browser was launched. Later that year, the first commercial website for the Digital Equipment Corp was launched, and within just seven years, there were 17.5 million websites. Fast-forward a further five years through the dotcom crash, and there were 65 million websites.
When printing came to Britain, the change it wrought was far-reaching, but it was gradual. But now we are experiencing change that’s as far-reaching, but immeasurably faster. The internet has caused markets to be created, subverted, destroyed. It has introduced new competitors, new business models and new channels to market. The ability it gives people to communicate and share information has caused an unprecedented surge in creativity and innovation in businesses, as people rush to take advantage of new opportunities and others scurry to defend positions.
Ten years ago, we typically looked at sources of sustainable competitive advantage in terms of processes and functional components of the business mix – the ability to make widgets cheaper because of a patent, the control of particular channels to market.
So now we need to look deeper within organisations to see where their winning characteristics lie. In this new era of hypercompetition, companies increasingly derive advantages from the skills they deploy – and in a period of intense change, the most important is the ability to innovate.
This trend had already started some years before, spurred by globalisation, consumer choice and deregulation. But the internet has accelerated it and multiplied its effects.
The capacity to evolve rapidly to thrive in new market environments, to respond to new consumer demand and to exploit new models. This is what sets the winners apart – Google who adopted a charging model from a competitor but added it to their superior search product, eBay who exploited the power of online community by adding it to an auction site, Amazon who invented the affiliate market – beating wealthier competitors by creating huge distribution at minimal capital cost.
These companies demonstrated an ability to innovate, and each prizes its ability to do so over time, devoting significant resource to the continuous development of new products.
But in the digital age, innovation isn’t something that just happens at this macro, corporate level. Testing of new techniques, approaches and even just media selections should be part of business as usual at every level.
In the media and marketing world, this isn’t just a pursuit of ‘media firsts’ – innovation for its own sake. The brutal reality is that chasing too single-mindedly the lowest cost conversions means you paint yourself into a corner, with no options in development when the market is disrupted by a new dynamic.
Your competitors, the media environment, individual publishers and your audience change all the time, and what failed to work three months ago might work today. The successful online campaign continuously tests new approaches, because they offer the potential to deliver an edge.
And ultimately that’s what we all want. An edge. A competitive advantage – we know something our competitors don’t – something we can exploit for a while until they catch up, at which point we’ll already be off doing something else.
There’s a natural tendency to do what worked before, and that’s exactly what many agencies and advertisers continue to do. But trying new things isn’t just a strategy for competitive advantage today – it’s a strategy for survival.