Technology

(WBZ) Join host Josh Bernoff of Forrester Research and some of the leading thinkers in digital media who reveal their insights and predictions into how changes in people's behavior are rewiring the media world. In this series, local leaders share their perspectives on how technology has transformed the media landscape, how consumers are leading the charge with social media, and what the media world should do to stay on top.

Click below to Hear More from our Leading Guests

"The Power of Digital Marketing" - Sarah Fay, Isobar
 "Can Commercial and Consumer Content Co-Exist?" - Henry Jenkins, MIT
 "The Media Company of the Future" - Hilmi Ozguc, Maven Networks
"Building a Better Customer Relationship" - Larry Weber, W2 Group

The Massachusetts Innovation & Technology Exchange (MITX: "my-techs") is the region's premier industry and professional organization dedicated to support and promote technology and innovation in New England. MITX focuses at the intersection of technology, marketing and digital media and its community is comprised of individual and companies that work in the digital industry.
Watch individual segments of Jeffrey's interview below:

What the internet means to business today and tomorrow?
Do companies define themselves with a brand or interface?
How does a company create the best interface for its customers?
How are social networking websites impacting a company's brand?

Josh Bernoff: Hello, I'm josh Bernoff from Forrester Research. We're here with Jeffrey Rayport, Chairman of Marketspace LLC, a Monitor Group subsidiary headquartered in Cambridge Massachusetts. Professor Rayport, you have been looking at changes in the internet and how it affects business for quite a while now, can you give us perspective on how the thinking has changed over the last 10 years or so about what the internet means to business?

Jeff Rayport: Oh that's a great question and in the interests of being concise I divide the history in to two chapters, and we're living in the beginning of the second chapter right now. Chapter one was the revolution, the so called dot com revolution, the emergence of a platform on the back of the World Wide Web, in which companies could connect to customers and do what we now call e-Commerce. And it's interesting to think that while that was a big deal in the 1990's e-Commerce today, 10 or 12 years into the e-Commerce revolution has plateaued out around 8-10% of total economic activity in the retail sector. It's more or less plateaued out where catalog direct marketing had plateaued out 15 or 20 years ago. So chapter one was an idea that said that this little phenomena call e-Commerce was going to change everything in the world by dint of the dot com platform. And I think what we've learned and the end of chapter one was, this is a big deal, but it's a big deal capped at around 10%. Chapter 2, which we are living in right now, is about the internet's impact on the other 90% of economic activity; it's the fact that the internet has made it possible essentially to wire the world. The rule now is not that connectivity is the exception; it's not a dial-up relationship, it's an always-on relationship. And the world we live in today which has near ubiquitous connectivity, filled with network access devices, called mobiles and PDA's and kiosks, and everything else all of us is so familiar with. That has meant that the internet is now finally living up to the promise that we prophesized 10 years ago, which is to rewire the rest of the world, the 90% of us who live in the analog world in addition to having created the online space, the 10%.

Josh: Now one of the things that you talk about in your books, and I assume in your interactions with your clients, is that it's not possible for companies to define themselves by the advertising that they do or the brand effort that they do, but that their actual definition of who they are, is the interface that consumers have with that company. Can you tell us a little more about that and what companies should do as a result of that concept?

Jeff: Absolutely. 10 years it was fashionable to say that any company that established a website, regardless of its industry, be it retail or financial services, consumer packaged goods, with its website it became a publisher. I think it's fair to say today, that we aren't just publishing our brands and our corporate stories and our product lines on websites, but every company worth its salt certainly the consumer facing brands around the world, are now not just running their traditional operations or the elements of the marketing communications mix, plus a website. They are orchestrating a portfolio if you will of interfaces or touch points, which they use to orchestrate interactions to manage relationships with customers and markets. In that sense, every company you could argue has not just become a publisher, it's become a media company, a media conglomerate in the sense that you cannot think of any major brand from Nike to Target to Wal-Mart to Bank of America, that doesn't have all the basic components of a big multi-platform media mix. Everyone's got Brick and Mortar, Points of Sales of service.

Josh: But they're not that good at being media companies, are they?

Jeff: Ahhhh, and neither are the media companies (Josh laughing), which is the shocking part of it. I think that's absolutely right, in a sense that everyone is now dealing with the fact that it's no longer simple to say how do I build my brand? "I buy full page ads in Time Magazine", "I put a 30 second spot in prime time"; all of that still true, but it's now a tiny part of all of the ways in which we influence customer perceptions of brand. And interestingly until you actually get to the point of sale to buy a car, or get cash from an ATM, the relationship you have with practically every brand in the economy, increasingly this is true to B2B realities as well, feels very much like the relationship you have with the set of media properties. And Josh, as you say the problem is that whether it's Time Warner, or News Corp or it's General Motor's or Daimler Chrysler, these companies are not very good at managing the fact that we now live in a multi-platform, what we used to call a multimedia world, where humans are a piece of the mix, products are a piece of the mix, call centers are a piece of the mix, and then all those things we recognize as media are part of the mix, and corporate America, the Global 2000 are really struggling with the implications.

Josh: Yeah, I mean this became clear to me recently. I had in one week a need to interact with my Doctor, with my Cable Company and with a plumber, and they were uniformly horrifyingly awful to deal with except the plumber, who came right away and did exactly what I needed. Ok? Now this is one guy with a truck.

Jeff: (laughing) You're a lucky man if the plumber came right away…

Josh: Well, I mean I was impressed, but why can't my cable company or why can't my doctor's office, who surely has information that's pretty important to me, why can't they create an interface to me that's as personal as that plumber did?

Jeff: To my mind you just stated that whatever the 64 million or 64 billion dollar question. What's funny to me is to put it in the context of the history of business trying to get it right for customers over the last 20 years. As you know, during the 1980s, we went through the Quality movement, and the customer centricity movement, talking about being marketing oriented. In the 90's great deal of emphasis on getting services right, where services in the 90's and the pre-web era were was all about people on the front lines of service delivery, interacting with customers in positive ways. What's interesting is that all of that was a sufficient challenge that you could argue that business still hasn't figured out how to organize itself around customers in many respects. We still haven't figured out how to get human services right consistently especially in mass market operations involving tens of thousands of people in call centers or retail floors. And now in this decade we are seeing the overlay and the integrated overly of a brand new factor, which is something we spend a lot of time thinking about. The question of what happens when the server-sector for the first time arguably in human history is susceptible for the types of automation, that became part of Agriculture 200 years ago, manufacturing 100 years ago, corporate data processing 30 or 40 years ago, all of a sudden, with voice response systems, web screens, with kiosks, with e-ticketing machines at airports. We are seeing automation come to services and replace what we thought was the unique province of human labor, the human factor dependencies of a face to face interaction is now a face to screen interaction. And that is really complex, it's also brand new.

Josh: Can you give us an example of how that actually makes a company more successful or more profitable to do that right?

Jeff: I think there are many examples around, let me point to one that is certainly familiar to all of us in the New England region. If you walk into a Bank of America lobby these days, now there are a lot of people since Bank of America is a big national brand who will complain about the service of Bank of America, but those of us who lived through the era of the Harvard Trust Bay Bank, the Bank of Boston, Fleet and then finally the bank of America take over, as we all know who live here, they did a marvelous job digesting a 50 billion dollar acquisition in turning Fleet into a bunch of Bank Of America lobbies. Fleet had a broken service delivery system; Bank of America had the luxury therefore for more or less starting with a clean slate. You walk into one of these lobbies now, and you have a whole variety of devices and people playing radically discontinuous roles, from what they would have done in a typical bank branch, or do in a typical bank branch under other brands in other parts of the country. It's noteworthy to say that it's not just the choice between an automated teller machine or a human behind a counter. Now you have a choice of an ATM, a pc at a kiosk, check stock quotes, flat panel displays that give you the news of the day and the tickers on CNBC. All the way through to humans but most of the humans are not sitting behind counters, they are out in front of counters, being proactive about what your needs are. Now the reason I lay all that out is that many people talk about getting multi-channel or multi-platform systems right by saying how do I win a WEBBY award for my website, how do I get a J. D. Power award for my call center. Our view is that the minute you start thinking about all these different touch points, human, machine and combinations of the two, working together, the roles of each one of these interfaces changes because of it s role in the larger system and therefore the definition of excellence or service excellence if you will, relationship excellence changes for every element of the system. So it's really an issue coming back to your example of "My god the plumber got it right!" Well I'll argue the plumber got it right because: A, he cares about you as a customer, and B, he's got a really simple set of touch points called a cell phone and his truck, and that's a pretty simple act of orchestration. What bank of America has pulled off is extraordinary complex, but, with 7 or 8 basic building blocks in their bank lobbies they managed to deliver a very different kind of retail experience than anyone has ever seen in retail banking.

Josh: So, one of the things that makes this complicated is that your customers don't just talk to you, they talk to each other. Now with social websites, and rotten tomatoes and whatever, your really in a world where you're not really in control of your own image, and yet you've talked about some of the values of viral marketing and that environment, so what's a company to do in a world where people are talking about them and they don't have control of that?

Jeff: It is not just a great question; it is, I think, the question of the moment; which is, if you think about the idea that 10 years ago every brand with the advent of the web became a publisher. And today with this chapter 2 of the internet, if you will; leaving Web 2.0 aside it's a different discussion. But this idea that now the internet is wiring everything, every company is now a multi-platform media proposition from the standpoint of representing its brand. The biggest thing or challenge that the media world is facing is exactly, Josh, what you mentioned, which is the rise of something that's been with us for a century since the advent of the Internet, User-Groups List-Serve and so forth. But it's so called consumer generated media.

Josh: Right, so what do you do about it?

Jeff: Consumer generated media, and community dynamics, are now as we all know famously becoming the "Lingua-Franca", and the staple content of the World Wide Web, and for that matter connectivity among humans walking around with mobiles. We tend to think of this as a perspective that starts with getting over denial, meaning that there are many companies that we come across, whether its researchers, strategic advisors who simply won't acknowledge the truth of what you and I are saying to one another right now. So whether its anger, grief, denial, the stages of, the point is number one, this is real and the notion that you can either control it or shut it down or filter it out is obviously the world's biggest marketing myth these days. So number one is understanding that marketing, up to this point has largely been about control. Even you could argue command and control and now let's get real; it's about power and influence. Command and control went out the window. The second is that marketing has traditionally been a top-down proposition. I buy my time in prime time and I tell you what my message is. Now we're talking about a bottom up, or a grass roots proposition. That grass roots proposition in itself is a chaotic unorganized, decentralized conversation. It's a big messy conversation involving 110 million pages on MySpace or 14 million on FaceBook or any numbers of the 40-45 million blogs that are out on the web. Now the issue is what does it mean for marketers to intercept an unorganized conversation that they can only influence they can control and become part of it. That's the Holy Grail.

Josh: Alright, thanks very much for your perspectives; an interesting view of the internet from the beginning. This is Josh Bernoff.

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