In this exclusive Q&A, Michael Treff, President of digital-first creative agency Code and Theory talks about how brands across industries have misunderstood digital transformation and what brands can do to keep up with the fast-paced modern digital landscape.
Q: All we’ve heard about this year is digital transformation, yet it seems to hold a different meaning for every industry. What does digital transformation mean to Code and Theory?
Many definitions of digital transformation are narrow, indicating a shift from traditional advertising to digital marketing, with a focus on media spend shifting to performance marketing and targeted, digital buys and the communications that are needed to support those buys. But true digital transformation requires a more fundamental look at the business models, organizational capabilities, and downstream expressions of products, services, and communications to support new business models.
For us, digital transformation is a strategic process we undertake in partnership with our clients – moving them from legacy infrastructure and org charts to systems optimized for how modern consumers behave. Digital transformation impacts both marketing and operations, fundamentally changing the way clients conduct business and connect with their customers.
These transformations are often precipitated by changes in technology itself, opening up opportunities for our clients to take advantage of. For example, businesses that typically relied on third party distribution and sales can now engage with and sell directly to consumers. Cable bundles are now untethered from the provider, and relationships can be established directly with the media company. To meet this need, publishers have shifted focus to content distribution, in addition to content creation.
Q: What questions should a CMO ask when they see their industry moving towards a digital transformation?
Any sort of digital transformation should be structured around an organization’s customers or users. Period. Beyond just marketing and communications, digital transformation should evolve the core business function, and enhance how that organization provides value to users. So, one of the most important questions any brand or CMO should ask is “what are our users’ unmet needs, and how can we change to address them?” Pinpoint the problem, and then find the solution.
Q: As you’ve worked across a wide-range of industries, what are some of the challenges that clients experience most frequently?
Clients come to us seeking competitive advantage. Often, obtaining that competitive advantage requires more than just front-end transformation. It requires real cultural and business strategy shifts. Before we start an assignment, we really want to understand what success looks like. Without rigorous research, it is easy to spend time and money chasing the wrong goal. While research is essential in up front planning, feedback from internal and external audiences is critical throughout the process to ensure everyone’s onboard, and we’re progressing towards meaningful outcomes. Trying to transform everything at once can be daunting—and highly disruptive! Taking the time to develop a solid transformation roadmap, prioritizing workstreams and map product and change to organizational capabilities ensures a smoother path forward. Lastly, aligning on the right KPIs is critical, ensuring that we’re always optimizing, and stepping closer to success.
Q: What makes a strong brand as far as its digital relationship with consumers?
Brands that excel at digital relationships have:
- A true understanding of what customers need, and a corresponding suite of digital products and services that are efficiently supported by internal teams and workflows
- Seamless integration of specific and personalized content/products/experiences and differentiated brand storytelling delivered across a cohesive ecosystem
- A culture of optimization, driven by continuous feedback loops of both external and internal audiences
Q: What industry is ready to be ‘disrupted’ or ‘transformed’?
All industries have been impacted as digital plays an increasingly prominent role in the lives of consumers, and technology change accelerates. But there are a few industries that will see a substantial amount of change in the near future. Take healthcare for example, particularly as patient-initiated and managed care becomes more common and a larger share of overall interactions within the industry. Transportation will also continue to evolve. We’ll see new service providers, new categories of services and better service in general. Basic expectations of customer experience—from consideration and booking to travel and after—are higher now. The common thread here is once-rigid, once-transactional processes have been democratized. Industry players are being forced to rethink how they can meet their customers’ needs through digital delivery.
Q: The advent of digitally-native brands has brought on an unprecedented D2C revolution as existing brands look to adapt to the changing environment. Why is a digital strategy so crucial when brands make that shift to D2C?
Many non-D2C brands just don’t have the infrastructure to jump to a D2C model. So, they are struggling to catch up with brands whose entire model is custom-built for modern consumers in a digital-first world. Creating that infrastructure overnight is impossible. Brands need a smart strategy to create a holistic, audience-first ecosystem that creates meaningful conversations with consumers and drives preference and share of wallet. Achieving cohesion throughout the consumer journey, agnostic of the touchpoint, is among the most difficult challenges for non-D2C brands to adapt to as they generally are structured into organizational silos. Adjusting internal workflows and teams to work collectively with aligned KPIs is often the biggest hurdle.
Q: Code and Theory has worked with a number of brands that are cultural influencers. How does a brand capitalize on their social and cultural influence to connect with consumers?
As we’ve seen repeatedly, consumers are willing to spend more money on mass-market brands that reflect their values. Doing this authentically is key to making meaningful connections with consumers that keep them coming back. While this is true for all brands, it’s something that brands with significant social/cultural capital particularly need to address. It’s so important for brands to be active on the same media as their consumers. It reinforces that they’re tapped into what people care about. Consumers are what brands are built on, so it’s up to the brand to go out and connect with their audience. Distribution of content is far more important today than it has ever been, and brands who leverage mass distribution platforms well—i.e., social media—are absolutely winning.
We particularly admire brands like adidas, who we are privileged to partner with. The adidas brand is synonymous with creation. Not only does adidas seek out celebrity-level influencers to build social capital and connect with consumers, but uses its platform to celebrate true innovators, and leaders of niche culture and design. From Daniel Arsham to Daniëlle Cathari, adidas has gained credibility as the brand that supports creators—it’s been earned through action, not just communications. They behave exactly how they present themselves, and it is that consistency and authenticity that brands must display in order to win.