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Savvy consumers shake up old business models

Excerpted with permission of the publisher, Wiley, from Converge: Transforming Business at the Intersection of Marketing and Technology by Bob Lord and Ray Velez. Copyright © 2013 by Bob Lord and Ray Velez.

For decades, businesses could easily compartmentalize themselves as they tackled the challenges presented by media, technology and creativity. Let's look at how each was handled in the traditional schema and compare it with how it exists now.


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Then: For decades there were two flavours of media: bought and earned. Paid media was something that could be bought every year in a showy event called the television upfront, when the TV networks put together a splashy party to roll out their new shows and get buyers to commit billions of their clients' ad dollars ahead of the coming season. The deal making was handled by specialist media-buying agencies that, through the aggregation of many big advertiser budgets, wielded great clout in the marketplace and thus could command volume discounts through scale. Earned media, on the other hand, was attention won through public relations strategies that persuaded news reporters to write favourable articles about a company and its products.

Now: The one-way communications model that used TV ads and PR to persuade consumers to buy your product is now dead. Each consumer is his or her own media company capable of publishing in multiple channels. On their whims rests the reputation of brands. The communications landscape is reinvented every few months and, as a result, that glacial upfront process where media is bought many months in advance makes less sense. PR agencies and departments struggle to organize around a communications ecosystem in which the consumer voice has been democratized.


Then: Technology was the back-end world of servers and intranets, it has traditionally been the domain of the chief information officer (CIO) and the chief technology officer (CTO), each with very different responsibilities. Mere infrastructure, technology was noticeable mainly when it wasn't working and was more associated with the cost of doing business than innovation. Off-shore systems integrators were hired to handle large-scale technology operations.

Now: No longer just a cost, technology is a source of innovation that can lead to better products and better marketing. Using data, APIs and cloud-computing is not just a back-end concern, but now impacts how brands are built and communicated, helping to identify better customer segments and optimize the stories that those segments are told. The CMO and CTO now have new tools that were not available in the past to get their job done


Then: Marketing communications were planned and executed through top-down processes. Highly paid art directors and writers fashioned themselves as the sole repository of creativity. To the degree technology or media played a role in this process, it was as a distribution channel for ideas created on Madison Avenue. Just go watch a few episodes of Mad Men to see how it was done.

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Now: Creativity is no longer the exclusive province of marketing and creative processes. Great ideas might come from crowdsourced creative platforms like Victors & Spoils, from an iOS developer, or from your consumer, for whom social media has become an easily accessed, always-on suggestion box. Technology and media don't just disseminated creative ideas, they inform them.

For a long time, perhaps until the beginning part of this decade, it was easy enough to think of media, creativity and technology as three distinct biomes. The CMO didn't need to be conversant with server technology. The CIO wasn't concerned with marketing. And marketing agencies didn't need to be concerned with the technology that supported their advertising ideas or the media budgets that disseminated them.

There was a very linear chain, from planning and strategy, to creative brainstorming, execution and production, to distribution through media, whether bought (ads) or earned (PR).

All that has changed because the consumer has changed.

The dramatic increase in computing power since Moore's law was observed has ensured that computers are more ubiquitous, more powerful, more interconnected and smaller than ever. Last year, a pair of Google researchers figured that a single query on the search engines sets in motion more computing power than it took to get to the moon and back in 1969.

Sony Ericsson predicts there will be more than three billion smartphone subscriptions by 2017, increasing data traffic to 15 times what it is today. That means a little less than half the world will be walking around with a level of computing in their pocket that would have been unthinkable just 15 years ago. Meanwhile, continual improvements in software development makes all of this computing power easier for people to use.

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Now consider the plights of those once easily organized silos. Technology is media. Media is creativity. Jumble it up any way you want. Like the famous mobius strip, you can't tell what's what any more. The only thing that matters is the quality of the consumer experience.

Bob Lord is global CEO of Razorfish, he is a member of Publicis Groupe's Strategic Leadership Team, and he has a seat on the board of directors for Publicis Groupe's VivaKi unit. He also sits on the board of directors for the Advertising Research Foundation and he is an active member of the TED community. He holds an MBA from Harvard Business School and a BS in engineering from Syracuse University.

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