The Vantage Point series taps the perspectives of various lookout points from around the local media and tech sectors. The views expressed do not necessarily reflect that of BIA Advisory Services. Please contact Rick Ducey, Managing Director, BIA Advisory Services, if you have insights to share.
The Convergence of Everything
by: Dan Hight, Business Development and Partnership Executive and Industry Advisor
There has been much discussion lately of the digital and physical worlds coming together, whether that be Amazon opening its own stores or buying Whole Foods or Alphabet’s Sidewalks Labs building out a sector in Toronto, there should be little doubt that the physical world is becoming digital. Media is one of the most visible areas that convergence and disruption of legacy business model is taking place. The days of media sales people getting sales by entertaining agencies is quickly going away. In its place media strategy sales people are meeting with clients and agencies to articulate the value of their media and show them where to buy it in the platform of their choice. It has moved from a product sales process to a value-based marketing discussion; which is probably the way it always should have been; but now with programmatic buying, is becoming a reality. All media companies are needing to articulate the unique value proposition of their audiences from radio to TV, a website, an app, a billboard, or even a shopping mall.
Nowhere is this happening more right now than the out-of-home industry. This is truly the physical meeting digital world in media. And where this happens, investment follows. Such as Intersection raising $150 Million for global expansion of their digital Link devices, Alibaba’s $1.4B investment in Focus Media (China’s largest digital building network), or OUTFRONT Media’s $800 Million dollar investment in digitizing New York’s MTA. It is clear that digital is the future of out-of-home.
So what does this mean for media companies? It means that those that haven’t focused on digital before will have to start and those that already have must continue. Some, like newspapers or yellow pages, were facing existential threats and needed to change, but others like the out-of-home industry do not feel that they are there yet… but they are. Digital is more than simply online or mobile advertising. It is more of a philosophy, and how you organize a company. A legacy infrastructure or one-product sales process is not going to cut it any longer. Companies need to understand what their core competency is and manage a network of partners for the rest. The world is more complex, media is more complex; and media companies need to become better structured to manage this new reality. Partnerships will be the key to long-term success in this every converging world.
But it is not just media that is having a convergence of digital and physical worlds. A connected car generates 25 GB of data per hour. UPS uses big data to optimize network of warehouses for needs of SMBs. Target using beacons to power in-store maps in app to help customers navigate the store. Farmers are using sensors to track acidity levels and ground temperature to increase crop harvest yields. These are a few examples of how data is being used in the physical world.
As 5G rolls out, which have maximum data speeds of 100 GBs/sec (up to 100 times faster than current infrastructure) our data infused worlds are only going to get more complex. Don’t be afraid of the unknown. The future is only going to get faster and more data informed. A common theme of convergence, from media transformation to helping to navigate a store, is it will take a combination of digital know-how, partnerships and business strategy transformation to get there. Cars are smarter, buildings are smarter, homes are smarter… virtually everything is being informed with data and infused with technology. What this means is we literally have a convergence of everything.
Dan Hight is the Founder of DH Advisors where he helps companies leverage technology solutions to drive sustainable revenue growth. His team brings a mix of traditional media, out-of-home, programmatic, mobile and digital media experience to help companies drive new revenue. If you are looking for help in building new revenue sources and partnerships, please contact Dan for more information.